Global R&D and International Comparisons

R&D underpins competitiveness and national security and also contributes to addressing global challenges such as public health, energy, the environment, and the development and deployment of critical technologies (CRS 2023a, 2023b, 2024; CSIS 2021; OECD 2023; USCC 2024). The global total for R&D expenditures in 2022 was $3.1 trillion in current U.S. purchasing power parity (PPP) dollars, based on all 38 OECD members plus another 9 regions, countries, or economies available in the OECD R&D database (Argentina, Bulgaria, China, Croatia, Romania, Russia, Singapore, South Africa, and Taiwan) (Table SDISC-3).^{​The global total is based on 2022 or, for countries with missing data in the OECD database, the latest available year. Comparable data on R&D were not available from the United Nations Educational, Scientific and Cultural Organization database, where most non-OECD R&D statistics were obtained in previous reports.}

The top 8 individual R&D-performing regions, countries, or economies accounted for 82% of global R&D expenditures in 2022, with the United States (30%) and China (27%) accounting for over half (Figure DISC-17; Table DISC-10; Table SDISC-3). As a region, the European Union (EU-27) accounted for 18% of global R&D expenditures. Adjusted for international comparability, the United States had $923.2 billion in gross domestic expenditures on R&D (GERD) in 2022 ($761.6 billion in constant 2015 U.S. PPP-converted dollars), up 12% from 2021 (5% in constant PPP dollars).^{​U.S. GERD as reported by OECD differs slightly from the U.S. total domestic R&D performance tabulated earlier in this report. For consistency with international standards for the measurement of GERD, OECD includes U.S. domestic expenditures on capital for R&D, excludes depreciation on U.S. domestic R&D capital, and makes certain adjustments for foreign sources of funding of domestic R&D.} China, the second-highest performer of domestic R&D, reached $811.9 billion in 2022 ($686.7 billion in constant PPPs in U.S. dollars), up 16% from 2021 (8% in constant PPPs) (OECD 2024d). Japan ($200.8 billion), Germany ($174.9 billion), South Korea ($139.0 billion), the United Kingdom ($102.6 billion), France ($85.2 billion), and Taiwan ($64.0 billion) round up the top 8 individual R&D-performing regions, countries, or economies in current U.S. PPP dollars, based on OECD statistics (Figure DISC-17, Figure DISC-18; Table SDISC-3).^{​United Kingdom GERD data are for 2021. Statistics in this section cover available data from MSTI (OECD 2024d) and are reported in U.S. dollars using purchasing power parity (PPP). PPP converts different currencies to a common currency while adjusting for differences in price levels between economies, allowing for cross-country comparisons.}

The U.S. share of global R&D declined from 39% in 2000 to 31% in 2010, remaining stable at 30% in 2022. China’s share of global R&D increased steadily since 2000, with corresponding declines in the shares of Japan and the EU-27 (Figure DISC-19). China’s GERD grew annually on average by double digits (CAGR in current dollars) in 2000–10 (20%) and in 2010–22 (12%), exceeding the rate of GDP growth over each of these periods, measured in current U.S. PPP dollars, adjusted for international comparability (Table DISC-10; Table SDISC-3). R&D expenditures’ growth over these decades coincided with several long-term policy plans by the Chinese government to advance scientific and technological capabilities (CRS 2024). For the United States, GERD and GDP grew annually between 2000 and 2010 by 4% (CAGR in current [nominal] dollars). For 2010–22, U.S. GERD grew 7% annually (CAGR in current dollars), faster than the nominal GDP growth rate of 5%.

GERD-to-GDP ratios, or national R&D intensities, are a useful summary measure to compare across economies (Table SDISC-3). In 2022, Israel (6.0%) and South Korea (5.2%) topped this indicator, while seven economies had intensities between 3.0% and 4.0%, including Taiwan (4.0%), the United States (3.6%), Japan (3.4%), and Germany (3.1%). China’s GERD-to-GDP ratio was 2.6%, and the EU-27 had a ratio of 2.1% in 2022 (Figure DISC-20).

The sectoral composition of R&D activities varies among countries and regions. Across the top 8 individual R&D-performing economies, the business sector is the largest performer and funder of R&D (Table DISC-11). For 5 of the top 8 R&D-performing economies, businesses performed more than three-fourths of R&D. The government sectors in the United Kingdom and France performed about 20% of R&D, compared with 10% for the United States and 8% for China. The higher education sector had double-digit performing shares only in China, Germany, and France among the largest R&D performers, with available detail in the OECD MSTI database (Table DISC-11; Table SDISC-4). The government sector funded between 17% and 23% of GERD in South Korea, the United Kingdom, the United States, and China in 2022.^{​For international comparative measures of other forms of R&D support by governments such as tax incentives, see the OECD INNOTAX Portal (OECD 2024c).}

IT-related industries (information and communication services and computer, electronic and optical products manufacturing) receive some of largest shares of business R&D expenditures within top GERD economies, based on internationally comparable statistics from the OECD ANBERD database (OECD 2024a) (Figure DISC-21).^{​OECD ANBERD data are classified according to the International Standard Industrial Classification of All Economic Activities (ISIC 4), Revision 4. Data for France are for 2020, and data for the United Kingdom are for 2022. For the information and communication services industries (ISIC 58-63), there is no 2021 information in the OECD ANBERD database for China.} In 2021, information and communication industries (International Standard Industrial Classification of All Economic Activities [ISIC] 58-63) received the largest share of business R&D expenditures in the United States as well as France (28% and 14%, respectively), and the second-largest share in the United Kingdom (18%). Computer, electronic and optical products manufacturing (ISIC 26, which includes semiconductors) received the largest share of business R&D expenditures in Taiwan (78%) and in South Korea (49%); in the United States, it was the second-largest industry at 17%. However, in absolute terms, businesses in the United States funded the largest amount of business R&D in computer, electronic and optical products manufacturing among research-intensive economies at $104.9 billion.

Other notable focus areas for business R&D expenditures in 2021 included the motor vehicles manufacturing (including electric vehicles), aerospace manufacturing, and pharmaceuticals manufacturing industries and R&D services. A third of business R&D expenditures in Germany and a quarter of business R&D expenditures in Japan were devoted to the motor vehicles manufacturing industry (ISIC 29). Among top GERD economies, the United States had largest share of business R&D expenditures in pharmaceuticals manufacturing (ISIC 21) with 16%, followed by Japan with 10%. Businesses in the United Kingdom (24%) and France (12%) invest the largest shares of R&D expenditures in scientific R&D services (ISIC 72).^{​For the scientific R&D services industry (ISIC 72), there is no 2021 information in the OECD ANBERD database for China and Taiwan.} Lastly, the largest shares of business R&D expenditures in the air and spacecraft and related machinery manufacturing industry (ISIC 303) were in France (9%) and the United States (3%).^{​For the air and spacecraft and related machinery industry (ISIC 303), there is no 2021 or 2022 information in the OECD ANBERD database for China, the United Kingdom, and Taiwan. All top six industries highlighted here account for about three-fourths of U.S. and South Korea BERD expenditures based on OECD/ISIC data, close to two-thirds for Germany and Japan BERD expenditures, and 83% for Taiwan BERD expenditures. Other countries have missing data as noted earlier.}