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Chapter 4. Research and Development: National Trends and International Comparisons

Cross-National Comparisons of Business R&D

This section compares business R&D across OECD countries across two dimensions: the distribution of business R&D across industries and the role of affiliates of foreign MNCs.

Companies classified in manufacturing perform most business R&D in the top seven R&D-performing countries, with shares ranging from 89% in Germany to 69% in the United States, based on OECD’s Analytical Business Enterprise R&D (ANBERD) database (see table 4-12).[18] These countries, however, differ in terms of the focus of their business R&D.

Pharmaceuticals manufacturing is the largest business R&D sector in the United Kingdom (28% of United Kingdom business enterprise R&D) and in the United States (16% of U.S. business enterprise R&D). Motor vehicles R&D has the largest share in Germany (33%). R&D in radio, television, and communication equipment manufacturing, which includes semiconductor devices, accounts for close to half (48%) of South Korea’s business enterprise R&D (figure 4-15).

Business R&D in other transportation equipment (appendix table 4-31), which includes commercial and defense-related aerospace and spacecraft, has the highest shares in the United States (13%), France (12%), and the United Kingdom (11%).[19] These three countries also report the largest proportion of defense R&D within government budget appropriations or outlays for R&D (GBAORD) (table 4-15) discussed elsewhere in this chapter. In addition, France and the United Kingdom host 17 of the top 25 EU R&D-performing companies classified in the related category of aerospace and defense, according to the 2012 EU Scoreboard (EC 2012).

R&D in services industries (the main R&D performing component in nonmanufacturing) had the largest share in the United States (30%) and the lowest share in China (7%), based on the most recent comparable industry-level ANBERD data. Within services, computer and related services accounted for the largest share in the United States and the United Kingdom (figure 4-15; appendix table 4-31).

R&D performed within a country by affiliates of foreign MNCs represented more than half of business enterprise R&D in smaller OECD countries such as Belgium, Ireland, Israel, and several Eastern and Central European countries in 2009 (figure 4-16). Japan, the second-largest business R&D performer among countries reporting foreign-affiliate R&D, had the lowest share (6%), compared with about 14% for the United States.

[18] U.S. business R&D data in ANBERD are for 2009. U.S. (BRDIS) 2010 statistics were used elsewhere in this chapter. ANBERD industry-level data presented here are based on International Standard Industrial Classification (ISIC) Revision 3.1. For ANBERD methodology, see OECD (2012). For additional cross-country indicators such as value added and trade in high-technology industries, see chapter 6.
[19] Note that 2007 data for France in this section are arguably less comparable than more recent data from the other countries given the economic and financial crisis that started in 2008.