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

Cross-National Comparisons of Government R&D Priorities

Government R&D funding statistics compiled annually by the OECD provide insights into how national government priorities for R&D differ across countries. Known technically as government budget appropriations or outlays for R&D (GBAORD), this indicator provides data on how a country’s overall government funding for R&D splits among a set of socioeconomic categories (e.g., defense, health, space, general research).[23] These GBAORD statistics for the United States and other top R&D-performing countries appear in table 4-15 (with added detail in appendix table 4-39).[24]

Defense is an objective for government funding of R&D for the top seven R&D-performing countries, but the share varies widely (table 4-15). Defense accounted for 57% of U.S. federal R&D support in 2011, but it was markedly lower elsewhere: a smaller but still sizable 16% in South Korea and 15% in the United Kingdom, and below 7% in France, Germany, and Japan. (GBAORD statistics have not yet been available for China.)

Defense has received more than 50% of the federal R&D budget in the United States for much of the past 20 years. It was 63% in 1990 as the long Cold War period drew to a close, but it dropped in subsequent years. The defense share of government R&D funding for the other countries over the past 20 years has generally declined or remained at a stable, low level.

The health and environment objective accounted for some 57% of nondefense federal R&D budget support in the United States in FY 2011 and 33% in the United Kingdom. For both countries, the share has expanded markedly over the share prevailing several decades ago. The health and environment share is currently 14% in South Korea and 10% or less in France, Germany, and Japan. The funding under this objective is predominantly health (in contrast to the environment) in the United States and mainly health in the United Kingdom (appendix table 4-39). However, in the other countries, it is more balanced between health and the environment.

The economic development objective encompasses agriculture, fisheries and forestry, industry, infrastructure, and energy. In the United States, government R&D funding in this category was 20% of all nondefense federal support for R&D in 1990, dropping to 11% in 2011 (table 4-15).[25] In the United Kingdom, it was 32% in 1990 but declined to 8% in 2011. France was 33% in 1990 but dropped to 17% in 2011. Japan was 34% in 1990 but dropped to only 27% in 2011 (with particular emphasis on energy and industrial production and technology). Germany was 26% in 1990 and 24% in 2011 (with an industrial production and technology emphasis). South Korea (50%) exhibits the largest share by far in this category in 2011 (with a strong emphasis on industrial production and technology).

The civil space objective now accounts for 14% of nondefense federal R&D funding in the United States (table 4-15). The share has generally been declining over the last 20 years: 21% in 2000 and 24% in 1990. The share in France is currently about 14% and has been around that level for almost 20 years. The share has been well below 10% for the rest of the top R&D countries.

Both the nonoriented research fund and general university fund (GUF) objectives reflect government funding for R&D by academic, government, and other performers that is directed chiefly at the general advancement of knowledge in the natural sciences, engineering, social sciences, humanities, and related fields. For some of the countries, the sum of these two objectives currently represents by far the largest part of nondefense GBAORD: Japan (59%), Germany (58%), and the United Kingdom (52%). France (42%) and South Korea (31%) were below half but still sizable. The corresponding 2011 share for the United States (16%) was substantially smaller. Nevertheless, cross-national comparisons of these particular indicators can be difficult because some countries (notably the United States) do not use the GUF mechanism to fund R&D for general advancement of knowledge, do not separately account for GUF funding (e.g., South Korea), and/or more typically direct R&D funding to project-specific grants or contracts, which are then assigned to the more specific socioeconomic objectives (see the sidebar, “Government Funding Mechanisms for Academic Research”).

Finally, the education and society objective represents a comparatively small component of nondefense government R&D funding for all seven of the countries. However, it is notably higher in Germany (4%), France (5%), and the United Kingdom (4%) than in Japan (1%). The United States (3%) and South Korea (3%) are in between.

[23] GBAORD parses total government funding on R&D into the 14 socioeconomic categories specified by the EU’s 2007 edition of the Nomenclature for the Analysis and Comparison of Scientific Programs and Budgets (NABS). These categories are exploration and exploitation of the earth; environment; exploration and exploitation of space; transport, telecommunications, and other infrastructures; energy; industrial production and technology; health; agriculture; education; culture, recreation, religion, and mass media; political and social systems, structures, and processes; general advancement of knowledge: R&D financed from general university funds; general advancement of knowledge: R&D financed from sources other than general university funds; and defense. GBAORD statistics published by the OECD in the Main Science and Technology Indicators series report on clusters of these 14 NABS categories.
[24] GBAORD statistics reported for the United States are budget authority figures.
[25] Some analysts argue that the low nondefense GBAORD share for economic development in the United States reflects the expectation that businesses will finance industrial R&D activities with their own funds. Moreover, government R&D that may be useful to industry is often funded with other purposes in mind, such as defense and space, and is, therefore, classified under other socioeconomic objectives.