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US seeing its lead in R&D slipping against other nations

According to the latest edition of the National Science Board's biennial report, the US continues to spend more than any other country on R&D, but it ranks only 10th in spending as a fraction of GDP.

The US lead in R&D spending is continuing to erode as newly developed countries such as China, South Korea, India, and Brazil build their capabilities, according to a new report from the National Science Board. Since 2000 the US share of total world R&D has dropped from 37% to 30%, while Asia’s share has grown from 25% to 34%. China’s share alone has jumped more than sevenfold, from just 4% to 15%, and its R&D has grown 18% annually over the past 10 years.

The figures are contained in the latest edition of the biennial compendium Science and Engineering Indicators. Ray Bowen, the chair of the subcommittee that oversees the report’s preparation, told reporters that surging R&D has been largely responsible for the rapid growth of China’s and other emerging nations’ economies. From 2001 to 2011, China’s annual growth rate averaged 21%, while South Korea’s averaged 11%. China has tripled the number of its researchers between 1995 and 2008, and South Korea doubled its number between 1995 and 2006.China’s high-tech manufacturing industry grew almost sixfold between 2003 and 2012, and its share of the global high-tech manufacturing market grew from 8% to 24%. That approaches the US global market share of 27%, and China may overtake the US in the near future, Bowen said.

The report contains some good news for the US; its R&D enterprise shows a recovery from the decline that took place from 2008 to 2009. That was only the second year-to-year downturn since the early 1950s, and it occurred as industry reined in spending during the recession. The decline would have been more precipitous except for the $20 billion in R&D funding appropriated in the American Recovery and Reinvestment Act, Bowen noted. In contrast to the situation in the European Union and Japan, the value-added output of US high-tech companies grew from 2010 to 2012, surpassing prerecession levels.

Despite the narrowing of the US’s lead, the report shows that the $429 billion it spent on R&D in 2012 is more than twice as much as China’s $208 billion and nearly three times as much as Japan’s $147 billion. But China has invested more heavily in a key sector, clean energy, pouring in $61 billion in 2012, compared with the US’s $29 billion.

Bowen told reporters that “R&D investment is not a zero-sum game. “Because of the globalization, discoveries made in one country can benefit other countries. But the reality of a more competitive landscape means the US must be vigilant to ensure the health of all aspects of its [science and technology] enterprise.”

The US, at 2.8% in 2011, ranked 10th in the world in its share of GDP devoted to R&D, behind Israel, South Korea, Finland, Japan, Sweden, Denmark, Taiwan, Germany, and Switzerland. China’s 1.8% ratio has more than doubled since 2001. However, the US leads in the number of high-quality research publications and generates the most income from intellectual property exports. But its share of the global total of refereed journal articles has been declining, falling 4% from 2001 to 2011, to 26%. The European Union’s share fell from 35% to 31% and Japan’s declined from 9% to 6% during that period, while China’s share shot up from 3% to 11% of the world total.

Publication data show a growth in collaborations across institutions, sectors, and nations. From 1990 to 2012, the share of purely US science and engineering articles with authors from multiple institutions grew from 34% to 62%. The average number of authors on papers published by researchers from US academic institutions increased from 3 in 1990 to 8 in 2012. The publication data also show that pass-through funding, in which money for R&D at one university is shared with one or more collaborating institutions, grew 171% from 2000 to 2009, from $700 million to $1.9 billion. That occurred at a time when academic R&D expenditures grew only 82%.

The report shows that knowledge- and technology-intensive (KTI) industries—high-tech manufacturing and commercial business, financial, and communications services—play a larger role in the US economy than in any other country’s, accounting for 40% of GDP. The KTI share in the other developed economies is around 29-30% and has been rising from the late 1990s. A growing concentration of KTI activity is occurring in East and Southeast Asia, a region that is approaching a ratio comparable to that of North America and Western Europe.

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