Research and development (R&D) plays a central role in advanced economies in areas such as economic growth and job creation, industrial competitiveness, national security, energy, agriculture, transportation, public health and well-being, environmental protection, and expanding the frontiers of human knowledge understanding.¹ Accordingly, companies, governments, universities, nonprofit organizations, and others around the world have made substantial investments in R&D. Since 2000, total global R&D expenditures have nearlymore than tripled in current dollars, from $676 billion to $2.0 trillion in 2018.

The United States emerged as a global leader in science and technology in the second half of the 20^th century. During this period, U.S. public and private investments in R&D grew rapidly and helped to propel the United States to a position of global economic leadership. By 1960, the United States accounted for approximately 69% of the world's R&D funding. By 20172018, however, the U.S. share of global R&D expenditures² had fallen to about 28%.³ (See Figure 1.) The U.S. decline in share of global R&D is not the result of a reduction in U.S. R&D investments—in fact, U.S. public and private R&D grew robustly during this period—but rather is the result of even greater increases in the investments of the governments and industries of other countries, which have recognized the importance of R&D to their industrial innovation and competitiveness.

Figure 1. U.S. Share of Global R&D

Sources: 1960: CRS analysis of U.S. Department of Commerce, Office of Technology Policy, The Global Context for U.S. Technology Policy, Summer 1997. 20172018: CRS analysis of Organisation for Economic Cooperation and Development (OECD) data, Main Science and Technology Indicators, OECD.Stat. Notes: Rest of the World includes the members of the OECD (less the United States), Argentina, China, Romania, Russia, Singapore, South Africa, and Taiwan. R&D expenditures by others countries are not included but are likely to be small in relative terms. In estimating total global R&D, CRS used the most recent year's reported R&D expenditures for twothree countries (SingaporeArgentina, Singapore, and South Africa) that had not reported data for 20172018.

In 20172018 (the most recent year for which comprehensive data are available), global R&D expenditures were $1.9612.107 trillion.⁴ The United States continued to fund more R&D than any other country. China, ranked second in 20172018, funded more R&D than the next four highest countries—Japan, Germany, South Korea, and France—combined. The 10 largest R&D-funding countries of 20172018 accounted for $1.662789 trillion in R&D expenditures, about 84.7% of the global total; the top 20 R&D-funding countries accounted for $1.995 trillion, 94.7% of the global total. (See Table 1.)

Figure 2 illustrates R&D expenditures between 2000 and 20172019 for the 10 countries with the highest R&D expenditures.

Figure 2. R&D Expenditures of Selected Countries, 2000-2017 2018 (in billions of current PPP dollars)

Source: CRS analysis of Organisation for Economic Cooperation and Development, OECD.Stat database, https://stats.oecd.org/Index.aspx?DataSetCode=MSTI_PUB. Notes: PPP = Purchasing Power Parity. PPP is used to determine the relative value of different currencies and to adjust data from different countries to a common currency allowing direct comparisons among them.

Trends in global R&D share between 2000 and 20172018 for the 10 countries with the highest 20172018 R&D expenditures are illustrated in Figure 3. Among them, six saw declines in share of global R&D—the United States, Japan, Germany, France, the United Kingdom, and Italy—while four saw their shares grow—China, South Korea, Russia, and Taiwan.

In 2000, China accounted for nearly 5% of global R&D, joining the United States, Japan, South Korea, and the countries of Western Europe as the largest funders of R&D. In 2009, China surpassed Japan to become the second largest funder of R&D. From 2000 to 20172018, while China's share of global R&D rose from 4.9% to 2526.3%, the U.S. share fell from 39.98% to 27.76% and Japan's share fell from 14.6% to 8.71%.

Figure 3. Share of Global R&D of Selected Countries, 2000-2017 2018

Source: CRS analysis of Organisation for Economic Development and Cooperation, OECD.Stat database, https://stats.oecd.org/Index.aspx?DataSetCode=MSTI_PUB. Notes: Global R&D includes the expenditures of the OECD countries, Argentina, China, Romania, Russia, Singapore, South Africa, and Taiwan. Share computed in PPP terms. PPP = Purchasing Power Parity. PPP is used to determine the relative value of different currencies and to adjust data from different countries to a common currency allowing direct comparisons among them.

Figure 4 illustrates the growth of R&D expenditures for each of the 10 countries with the highest 20172018 R&D expenditures for 2000 to 20172018 as a percentage of its 2000 R&D expenditures.

Figure 4. Growth in R&D Expenditures Since 2000 for Selected Countries, 2000-2017 2018

Source: CRS analysis of Organisation for Economic Development and Cooperation, OECD.Stat database, https://stats.oecd.org/Index.aspx?DataSetCode=MSTI_PUB.

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