KTI industries, the 10 manufacturing and 3 services R&D-intensive industries featured in this report, are important contributors to GDP and trade across countries and regions. Value added of U.S. KTI industries accounted for a modest share of U.S. GDP. This reflects that most KTI industry output is in the manufacturing sector, which represents a smaller share of the U.S. economy compared with services. At the same time, however, the growth of value added of U.S. KTI services relative to U.S. KTI manufacturing has been a notable trend over the last two decades. More recently, U.S. KTI services industries experienced growth even through the pandemic-related downturn, whereas U.S. KTI manufacturing industries experienced a steep decline in 2020 but a robust recovery in 2021 and 2022.

Consistent with other economic indicators, value added by KTI industries is highly concentrated globally. The United States, China, the EU-27, Japan, and South Korea accounted for about 80% of worldwide KTI value added in 2022. In that year, China and the United States were the top two producers of KTI output, each representing over a quarter of global KTI value added.

Some differences in the relative shares in KTI output across countries reflect the broader structure of their economies in terms of manufacturing versus services. Other trends appear to be tied to industry-specific developments, with fragmented supply chains and modular production networks reflecting, in part, cumulative competitive advantages in R&D and manufacturing across regions. Most notably, five of the top six semiconductor-producing locations were in East Asia in 2022, consistent with decades-long trends. Global KTI manufacturing exports rebounded in 2021 and 2022 following a pandemic-related decline in 2020.