The rise in global competition between nations has highlighted the importance of research and development spending for fostering economic growth and development.

A report by the U.S. National Science Board, “Science and Engineering Indicators 2012,” spotlights global trends in the growth of knowledge and technology intensive (KTI) industries. These include business, financial, communications, health and education services — considered the “knowledge industries” — as well as high-technology manufacturing in the areas of aircraft and spacecraft, pharmaceuticals, office and computer equipment, communications, and scientific and measuring equipment.

Key findings include:

• In 2009, R&D spending in the United States “slowed noticeably,” to an estimated $400 billion (current dollars). That figure is below the $403 billion spent in 2008 but above the $377 billion in 2007.
• Of U.S. R&D activities, the business sector is both the largest funder (62%) and performer (71%). Government is the second largest funder (31%) and academia the second largest performer (14%).
• While the U.S. share of total global R&D spending declined from 38% in 1999 to 31% in 2009, the country is still by far the world leader. China’s R&D spending has grown rapidly — 20% annually over the past 10 years — and the country is now in second place, with 12% of global spending, but this is still less than half the U.S. share.
• Japan has moved down to third place, with 11% of global R&D ($138 billion). “The largest EU performers spend comparatively less: Germany ($83 billion, 6%), France ($48 billion, 4%), and the United Kingdom ($40 billion, 3%). Russia, Italy, Canada, India, Brazil, Taiwan and Spain comprise a next lower rung, with national R&D expenditures ranging from $20 billion to $33 billion.”
• The United States continues to have the highest concentration of KTI industries of any country, comprising 40% of U.S. GDP. By comparison, KTI industries represent 30% and 32% of the GDP of Japan and the EU, respectively.
• In knowledge-intensive service industries, the United States has the highest total commercial service output in the world ($3.6 trillion), although its share has been declining, from 42% in 2000 to 33% in 2010. China’s share rose from 2% in 1995 to 7% in 2010, largely driven by 20% average annual growth in its communications industry.
• The U.S. share of global output of high-technology manufacturing industries declined from 34% in 1998 to 28% in 2010, but remains the largest in the world. China’s share rose from 3% in 1995 to 19% in 2010, passing Japan in 2007.
• The share of patents registered by the U.S. Patent and Trademark Office for U.S. citizens declined from 54% in 1998 to 49% in 2010. This “may indicate increased technological capacity abroad.” For U.S. patents granted to citizens of other countries, the “EU, Japan, and the Asia-8 were the main recipients … with a collective share of nearly 90%.”

Tags: technology, science, economy, entrepreneurship