Global Research and Development Expenditures: Fact Sheet

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 more than doubled.

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 2015, however, the U.S. share of global R&D expenditures² had fallen to about 29%. (See Figure 1.)³ The U.S. decline in share of global R&D resulted not from a reduction in U.S. R&D investments—in fact, U.S. public and private R&D grew robustly during this period—but rather from even greater increases in the investments of the governments and industries of other countries, which 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; 2015: CRS analysis of Organization 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. CRS has estimated R&D expenditures for seven countries (Australia, Canada, Ireland, New Zealand, Switzerland, Turkey, and Argentina) not reporting data for 2015 based on recent growth rates.

In 2015 (the most recent year for which comprehensive data are available), global R&D expenditures were $1.750 trillion. The United States continued to fund more R&D than any other country. China, ranked second in 2015, funded more R&D than the next three highest countries—Japan, Germany, and South Korea—combined. The 10 largest R&D-funding countries of 2015 accounted for $1.480 trillion in R&D expenditures, about 84.6% of the global total. (See Table 1.)

Figure 2 illustrates R&D expenditures between 2000 and 2015 for the 10 countries with the highest R&D expenditures.

Figure 2. R&D Expenditures of Selected Countries, 2000-2015 (in billions of current PPP dollars)

Source: CRS analysis of Organization 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 2015 for the 10 countries with the highest 2015 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 2015, while China's share of global R&D rose from 4.9% to 23.4%, the U.S. share fell from 40.0% to 28.8% and Japan's share fell from 14.7% to 9.7%.

Figure 3. Share of Global R&D of Selected Countries, 2000-2015

Source: CRS analysis of Organization 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 the 10 countries with the highest 2015 R&D expenditures from their 2000 R&D expenditure levels through 2015.

Figure 4. Growth in R&D Expenditures Since 2000 for Selected Countries, 2000-2015

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

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