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China Threatens U.S. Role as Top R&D Funder

R&D Spending by Leading Economies OECD


The United States remains the world’s largest investor in research and development, but China is picking up speed so rapidly that it is estimated to surpass the United States in this area by about 2019, data compiled by the Organization for Economic Cooperation and Development shows.

As advanced economies including the United States continue to wrestle with the ongoing impact of the 2008 global financial crisis, their research and development (R&D) investments have remained flat, or even declined, according to an analysis of the Organization for Economic Cooperation and Development’s (OECD) data conducted by AAAS’ R&D Budget and Policy Program.

The picture is very different in Korea and China where research and development funding has jumped dramatically, said the analysis. Policymakers, corporate officials and academic researchers closely watch the OECD data, which is updated twice a year, to gauge trends in scientific innovation, technological entrepreneurship and comparative global competitiveness.

Korea has doubled its R&D funding as a share of its gross national product over the last two decades, reaching 4.29%  of investments  totaling $72 billion in 2014. China has more than tripled its R&D funding as a share of its gross national product to reach 2.05% in 2014.

In contrast, the United States devoted $457 billion to R&D in 2013, according to the most recent OECD data available, a 2.74% share of the U.S. gross national product in the same year. The U.S. commitment to R&D is expected to decline or remain flat – leaving China on a path to surpass the United States by 2019, said the AAAS analysis.  

Basic Reasearch vs Applied R&D OECD chart


Overall, investment in basic research quadrupled over the period of 1985-2013 in the 34 countries that make up the OECD’s leading economies. Basic research is separate from applied research in that it emphasizes advances in fundamental science that sprout unexpected innovations over time. Applied research is more targeted and completed on a short time frame.

The outlook for an increasing emphasis on basic research shifts greatly when countries, take China for example, are examined individually. In China, where manufacturing drives the economy, basic research accounted for 4.7% of its R&D funding in 2013, compared to the OECD average rate of 17.3%.

The AAAS analysis also traces global scientific output, breaks down R&D spending by sectors such as health and energy, looks at the balance of R&D spending between the civil and defense sectors and weighs the use and impact of tax policies to spur R&D spending.

[Associated image: AdobeStock / Nicolas Herrbach]