Data on R&D expenditures by country and region provide a broad picture of the changing distribution of R&D capabilities and activities around the world. R&D data available from the Organisation for Economic Co-operation and Development (OECD) cover the organization’s 34 member countries and 7 nonmembers (OECD 2013). The United Nations Educational, Scientific and Cultural Organization’s (UNESCO’s) Institute for Statistics provides data on additional countries (UNESCO 2013). The discussion in this section draws on both of these data sets.
Cross-national comparisons of R&D expenditures and funding necessarily involve currency conversions. The analysis in this section uses the international convention of converting foreign currencies into U.S. dollars via purchasing power parity (PPP) exchange rates (for a discussion of this methodology, see the sidebar, “Comparing International R&D Expenditures”).
Worldwide R&D expenditures totaled an estimated $1,435 billion (current PPP dollars) in 2011. The corresponding estimate for 5 years earlier in 2006 is $1,051 billion. Ten years earlier, in 2001, it was $753 billion. By these figures, growth in total global R&D has been rapid, averaging 6.4% annually over the 5-year period and 6.7% annually over the 10-year period.
Overall, global R&D performance remains highly concentrated in three geographic regions: North America, Asia, and Europe (figure
The geographic concentration of R&D is more apparent when looking at specific countries (table
The generally vigorous pace at which total global R&D continues to grow is certainly one of the prominent developments, a reflection of the growing knowledge-intensiveness of the economic competition among the world’s nations. The other major trend is the particularly rapid expansion of R&D performance in the regions of East/Southeast and South Asia, including economies such as China, India, Japan, Malaysia, Singapore, South Korea, Taiwan, and Thailand. The R&D performed in these two Asian regions represented only 25% of total global R&D in 2001 but increased to 34% in 2011, including China (15%) and Japan (10%).
China continues to exhibit the world’s most dramatic R&D growth pattern (figure
The rate of growth in South Korea’s R&D has also been quite high, averaging 10.9% annually over the same 10-year period. The growth in Japan’s R&D has been much slower, at an annual average rate of 3.5%.
By comparison, while the United States remains atop the list of the world’s R&D-performing nations, its pace of growth in R&D performance has averaged 4.4% over the same 2001–11 period, and its share of global R&D has declined from 37% to 30%. Total R&D by EU nations has been growing over the same 10 years at an annual average rate of 5.0%. The pace of growth during the same period for Germany (5.5%), France (3.8%), and the United Kingdom (3.1%) has been somewhat slower. The EU countries accounted for 22% of total global R&D in 2011, down from 26% in 2001.
R&D intensity provides another basis for international comparisons of R&D performance. This metric does not require conversion of a country’s currency to a standard international benchmark (dollars), but it does provide a means to adjust for differences in the sizes of national economies.
The U.S. R&D/GDP ratio was somewhat over 2.8% in 2011 (table
The R&D/GDP ratio in the United States has ranged from 1.4% in 1953 to well above 2.8% in 1963–67 to a historical high of 2.9% in 2009. Over the 10-year period from 2001 to 2011, the ratio fluctuated between a low of 2.6% in 2004 to a high of 2.9% in 2009 (figure
Most of the growth over time in the U.S. R&D/GDP ratio can be attributed to increases in nonfederal R&D spending, primarily that financed by business. Nonfederally financed R&D increased from about 0.6% of GDP in 1953 to 2.0% of GDP in 2011. This increase in the nonfederal R&D/GDP ratio reflects the growing role of business R&D in the national R&D system and, more broadly, the growing prominence of R&D-derived products and services in the national and global economies.
Among the other top seven R&D-performing countries, most had increasing R&D/GDP ratios over the 2000–11 period (figure
In addition to the United States, countries in Nordic and Western Europe and the most advanced areas of Asia have R&D/GDP ratios above 1.5%. This pattern broadly reflects the global distribution of wealth and level of economic development. Countries with high incomes tend to emphasize the production of high-technology goods and services and are also those that invest heavily in R&D activities. Private sectors in low-income countries often have a low concentration of high-technology industries, resulting in low overall R&D spending and, therefore, low R&D/GDP ratios.
The business sector is the predominant R&D performer for the top seven R&D-performing nations (table
The R&D performed by the government ranges over 8%–16% of total national R&D for the leading seven countries. Japan (8%) and the United Kingdom (9%) are on the lower end of this range. China (16%), Germany (15%), and France (14%) are at the high end. The United States and South Korea lie in between.
Academic R&D ranges from 8% to 27% of total national R&D performance for these countries. China has the lowest ratio, at 8%. The United Kingdom has the highest, at 27%. The United States (15%), Japan (13%), and South Korea (10%) have lower shares; Germany (18%) and France (21%) have higher shares.
With regard to the funding of R&D, the business sector is again the predominant source for the top seven R&D-performing nations (table
Government is the second major source of R&D funding for these seven countries. France is the highest, at 37%. The lowest is Japan, at 16%. The United States (31%), the United Kingdom (32%), and Germany (30%) are on the higher side. South Korea (25%) and China (22%) are in between.
Funding from abroad refers to funding from businesses, universities, governments, and other organizations located outside of the country. Among the top seven R&D-performing countries, the United Kingdom is the most notable in this category, with 17% of R&D funding coming from abroad. France is also comparatively high, at nearly 8%. Germany and the United States are both around 4%, and the rest are much lower. (For the United States, the funding from abroad reflects foreign funding for domestic R&D performance by the business and higher education sectors.)
Another dimension in which to compare countries is the extent of total national R&D performance directed to basic research. None of the other top seven R&D-performing countries come close to the United States in its $74 billion of support for basic research in 2011 (table