SCIENCE & ENGINEERING INDICATORS

The United States spent more on R&D than did any other country in 2017. However, its global share since 2000 fell as R&D spending rose in many Asian countries, especially China. In R&D intensity (ratio of R&D to gross domestic product [GDP]), the United States ranked 10th in 2017. The R&D-intensity level has risen modestly in the United States since 2000, while China and South Korea have seen rapid increases.

Total global R&D expenditures have risen substantially, expanding threefold between 2000 ($722 billion) and 2017 ($2.2 trillion). Global R&D activity remains concentrated in the United States, EU, and the combination of East-Southeast and South Asia regions (see Glossary for member countries of each region).

Among individual countries, the United States was the largest R&D performer in 2017, followed by China, whose R&D spending now exceeds that of the EU (Figure 11). Together, the United States (25%) and China (23%) accounted for nearly half of the estimated global R&D total in 2017. Japan (8%) and Germany (6%) are next, followed by South Korea (4%). France, India, the United Kingdom, Russia, Brazil, Taiwan, Italy, Canada, Spain, Turkey, and Australia account for about 1%–3% each of the global total. Many other countries also conduct R&D, with annual expenditures well below these top countries and economies.

A notable trend over the past decade has been the growth in R&D spending in the regions of East-Southeast and South Asia, compared to the other major R&D-performing areas. Asian countries, most notably China, have heavily contributed to the overall increase in worldwide R&D expenditures, with China accounting for almost one-third (32%) of the total global growth between 2000 and 2017 (Figure 12). The United States (20%) and the EU (17%) together accounted for over one-third (37%) of the global growth.

Across countries, regions, and economies, the differential growth rates have led to shifting global R&D shares. Despite average annual growth in R&D spending of 4.3% in the United States and 5.1% in the EU between 2000 and 2017 (Figure 13), global R&D shares declined for the United States (37% to 25%) and for the EU (25% to 20%) (Figure 14). At the same time, the economies of East-Southeast and South Asia—including China, Japan, Malaysia, Singapore, South Korea, Taiwan, and India—increased their combined global share from 25% to 42%, so this region now exceeds the respective U.S. and EU R&D shares and leads in global R&D expenditures.

Although the United States invests more in R&D than does any other individual country, several other, smaller economies have a greater “R&D intensity”—that is, a higher ratio of R&D expenditures to GDP (Figure 15). South Korea has the highest ratio at 4.6%. Over the past decade, U.S. R&D intensity has fluctuated within a relatively narrow range and remained generally high relative to historic levels, although the global U.S. rank in this indicator fell from 8th in 2009 to 10th in 2017. Since 2000, the R&D-to-GDP ratio rose sharply for both South Korea and China, although those countries started with a low base, whereas R&D intensity rose gradually in the EU.

Many governments have limited direct control over achieving a targeted R&D-to-GDP ratio since, for the most part, the business sector is the predominant source of R&D funding among the top R&D-performing countries. In 2017, the business sector accounted for approximately three-quarters of R&D funding in the leading Asian countries: Japan (78%), China (76%), and South Korea (76%). The business share of total R&D was lower but still significant in the United States (62%) as well as in leading European countries, with Germany at 66%, France at 56%, and the United Kingdom at 52%. These shares provide consistent cross-country comparisons of R&D; the methodology differs from that of the U.S. R&D data that follow in the next section.

Countries also vary in their relative focus on basic research, applied research, and experimental development (see Glossary for definitions). According to the most recent estimates, the United States spends 17% and China spends 6% of its annual R&D funds on basic research. In comparison, this proportion was 21% for France. However, this amounted to $13 billion of basic research performance in France, smaller than the amounts spent in the United States ($91 billion) and China ($27 billion). China spends 84% of its R&D funds on experimental development, compared to 63% in the United States.