U.S. will maintain Top Spot in R&D Spending, but Asian Countries coming on Strong

In the “2011 Global R&D Funding Forecast,” researchers from Battelle and R&D Magazine project consistent and positive global R&D spending in 2011. Global R&D (including public, private and nonprofit spending) is projected to increase by 3.6 percent from $1.15 trillion to almost $1.2 trillion. However, 2011 R&D as a percentage of global GDP will remain constant at 1.9 percent. This increase is attributed to a shift in the geographic distribution of investment. Asian countries continue to rapidly increase their investments in R&D spending (China has over taken Japan as the second largest investor in R&D spending to the U.S.) and the U.S. and Europe should maintain nearly flat levels of spending.

The U.S. should maintain slow, consistent growth in R&D spending over the next few years, according to the report. However, Battelle researchers project that the limited, flat growth R&D spending seen in 2010 will continue through 2011. In 2011, R&D spending should increase slightly from $446.7 billion in 2010 to $458 billion, but R&D as a percentage of GDP will remain constant at 2.7 percent. Researchers attribute the limited, flat growth to the uncertainty brought on by the changing role of the federal government. Current and long-term budget constraints coupled with the change in congressional leadership may lead to severe budget cuts in defense related R&D spending and flat budgets in other agencies that support R&D. The U.S., however, is still projected to invest almost triple the amount of dollars on R&D than China ($458 billion to $153.7 billion). The U.S. also ranks 1st in spending in eight of the nine technology areas analyzed in the report — the U.S. finished second to Japan in R&D spending in automotive & other motor vehicles.

The projections provide insight into the geographic distribution shift of investments in R&D. Rapidly developing Asian countries (e.g., China, the Asian Tigers, India) were investing heavily in R&D spending (upwards of 10 percent of GDP in China) before and even during the global economic crisis. These countries have constructed policies around technology-based economic development because they see R&D as a long-term source of sustainable economic development. These projections indicate that those countries will continue to maintain high-levels of investments that will fuel over 40 percent of the projected $500 billion dollars of growth in R&D spending. Asia should increase R&D funding from $400 billion to over $420 billion. The authors contend that this shift will increase due to China's commitment to R&D spending. They believe that China is more likely to accelerate R&D spending than decrease in the near future.

In contrast, Europe only will increase slightly their funding $268.6 billion to $276.6 billion in 2011. Europe's limited, flat R&D spending growth is due to the proposed austerity measures and severe debt issued faced by some of the European Union member states (e.g., Ireland and Greece). Read the Report...