Comparing Global Research & Development Cost by Country

By: | March 11th, 2013

Steve Jobs famously said: “Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.”  Apple has consistently done more with fewer research R&D dollars so the secret of the global arms race in R&D is to spend efficiently.

Talking to Japanese executives at a recent international tradeshow in Tokyo I was told that despite Japan’s penchant for product design and enhancements, original technology ideas still come from the West. Furthermore China’s well-publicized cyber war campaigns to cull intellectual property and trade secrets from US corporations speaks volumes about where they really see themselves in the competitive R&D race.

That being said, the dollars spent on R&D do matter. Despite recent worldwide economic malaise both developing and established economies are continuing to increase R&D budgets and they will spend close to $2 trillion collectively in 2013.

Traditionally it has been the norm to compare countries R&D budgets but is becoming more illustrative to look at larger regions or the major competing blocs. Two measures are important: first, the overall dollar amount, and second, percentage of GDP.

The US leads the world in the overall dollar amount at $436 billion, China at $198 billion and Japan at $157 billion. Israel leads the world in percentage of GDP spent on R&D at 4.2% followed by Japan and South Korea at just above 3.5% each. The US spends about 2.7% of its GDP on R&D and China about 2%.

Looking at the blocks, Asia will lead the world by spending $514 billion or 2.8% of their GDP, followed by the Americas at $505 billion or 2.3% of their GDP, then Europe at $338 billion or 2% of GDP and finally the rest of the world at $44 billion or 1.1% of GDP.

One final point: the R&D scoreboard shows that as far as private R&D investment is concerned 1,500 companies worldwide represent 90% of the total spent.  We will break down R&D budgets by industry sector and company in coming posts so stay tuned!

David Russell Schilling

David enjoys research and writing about cutting edge technologies that hold the promise of improving conditions for all life on planet earth.

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