Research and Development: U.S. Trends and International Comparisons | NSF (2024)

Two key indicators of national R&D performance are gross domestic expenditures on R&D (GERD)—a measure of a country’s total R&D investment—and national R&D intensity (GERD-to-GDP ratio)—a measure of a country’s investment in R&D relative to its overall economic activity. Together, they paint a broad picture of the current distribution of global R&D activities and the changing global R&D landscape as countries build capabilities in science and technology to improve their national economy and society.

This section compares R&D performance in the United States with other major R&D-performing nations globally, including China, Japan, South Korea, France, Germany, India, and the United Kingdom as well as key regional and geopolitical groupings, such as the European Union (EU-27) and East-Southeast and South Asia. It also presents cross-national analyses of trends in the composition of R&D by sector and by R&D type.

The national R&D expenditures presented in this report are from the Organisation for Economic Co-operation and Development’s (OECD) Main Science and Technology Indicators and the United Nations Educational, Scientific and Cultural Organization’s (UNESCO) Institute for Statistics. The global R&D total is estimated by NCSES based on these sources and reflects R&D performance by 119 countries with reported annual R&D expenditures of $50 million or more.^​ These countries account for most of the current global R&D.

R&D expenditures for all countries are reported in current U.S. dollars (not adjusted for inflation) using purchasing power parities (PPPs). PPPs convert different currencies to a common currency while adjusting for differences in price levels between economies. The use of PPPs thus enables direct comparisons of R&D expenditures across countries. (See the Technical Appendix for more details.)

The regional analysis focuses on the regions with the largest R&D expenditures: North America (United States, Canada, and Mexico), Europe (including the EU-27 member countries), and the portion of Asia that includes the regions of East-Southeast Asia (including China, Japan, South Korea, and Taiwan), and South Asia (including India and Pakistan). The groupings of countries into regions are from The World Factbook (CIA 2021).

The next tier of top R&D performers includes Japan (7% of global R&D), Germany (6%), and South Korea (4%), each with R&D expenditures above $100 billion. Together with the United States and China, these countries accounted for two-thirds of global R&D in 2019.

France, India, and the United Kingdom make up the third tier of top R&D performers, each with R&D expenditures above $50 billion, or around 2%–3% of the global R&D total. The fourth tier includes Russia, Taiwan, Italy, and Brazil, each with R&D expenditures from $36 billion to $45 billion, or 1.5%–2.0% of the global R&D total. Canada, Spain, Turkey, the Netherlands, and Australia follow, with R&D expenditures between $22 billion and $30 billion, or about 1% of the global R&D total each.

These top 17 R&D-performing countries collectively performed 87% of the global R&D in 2019 (Figure RD-6). Many other countries also perform R&D but do so at a comparatively much smaller scale (Table RD-5).

The global concentration of R&D performance continues to shift from North America and Europe to the East-Southeast and South Asia regions (Figure RD-7). R&D performed in North America accounted for 40% of the global total R&D in 2000 but only 29% in 2019. Europe accounted for 27% of global R&D in 2000 but declined to 22% in 2019. In contrast, the East-Southeast and South Asia regions accounted for 25% of the global total R&D in 2000, and their global share rose to 39% in 2019.

China accounted for 29% ($492.8 billion) of the global increase in R&D since 2000 (Figure RD-8). The United States accounted for 24% ($399.8 billion), and the EU-27 member countries accounted for 17% ($281.5 billion). The increases of several other major Asian R&D performers were also noticeable: South Korea and Japan jointly accounted for 9% of the increase ($158.3 billion).

The latest data show a more pronounced gap in R&D expenditures between the United States and China than previously measured. Indicators 2020 reported China’s R&D expenditures for 2017 at $496.0 billion, or 90% of the U.S. level of $549.0 billion (NSB Indicators 2020: Figure 4-7). In comparison, current data place China’s level of annual total R&D expenditures in 2017 at $420.8 billion, or 76% of the U.S. level of $555.1 billion. This reset in China’s R&D expenditure levels stems entirely from the conversion of China’s R&D data to U.S. PPP dollars following the latest release of PPP data by the International Comparison Program (ICP) at the World Bank.^​ This release included benchmark PPP data for the new reference year 2017, revised PPP data for reference year 2011, and annual PPPs for non-benchmark years (2012–16).^​ According to OECD (2020), the revised PPPs for China imply a higher cost of performing R&D because China’s relative price of investment had been previously underestimated. In addition to the reset in China’s R&D expenditure levels, the U.S. R&D expenditure total for 2017 was also revised upward by several billions of dollars as a result of a number of revisions. Even so, China continues to move closer to the United States (Figure RD-9). China’s total R&D expenditures in 2019 were 79% of the U.S. level.

Among other top R&D-performing Asian countries, the rise in R&D expenditures in South Korea has also been quite high, averaging 10.9% annually over 2000–10 and 7.8% for 2010–19 (Figure RD-9; Table RD-6; Table SRD-1). India’s increase in R&D expenditures averaged 9.4% annually over 2000–10 and 4.4% for 2010–19. Japan’s corresponding increases of R&D have been considerably slower, at 3.6% and 2.4%, respectively.

Total R&D expenditures by the EU-27 nations have been increasing at an annual average rate of about 5.5% over both 2000–10 and 2010–19, with Germany at 4.9% and 6.1% and France at 4.3% and 4.1%, respectively (Table SRD-1). Over the same periods, the R&D expenditures in the United Kingdom have been increasing at 4.1% and 4.7%, respectively.

Despite ranking at the top of the R&D-performing countries by total R&D expenditures, the United States ranked ninth in national R&D intensity (the GERD-to-GDP ratio) among the economies tracked by OECD and UNESCO data (Table RD-5). The United States is one of ten countries overall and one of five top R&D-performing countries with R&D intensities above 3.0% (Figure RD-6; Table RD-5). Other top R&D-performing countries with R&D intensities above 3.0% are Japan (3.20%), Germany (3.19%), and South Korea (4.64%).

Israel and South Korea have the highest R&D intensities across all countries. Israel continues to hold the top spot, with an R&D intensity of 4.93% (Table RD-5). Israel, however, ranks 19th by total R&D expenditures. South Korea (4.64%) is second and the only country among the largest R&D-performing countries with an R&D intensity above 4.50%. Taiwan comes in third (3.49%), followed by Sweden (3.39%). Other countries with comparatively high R&D intensity ratios are Austria (3.13%) and Switzerland (3.18%). The R&D intensities of the remaining top R&D performers are as follows: China at 2.23%, France at 2.20%, the United Kingdom at 1.76%, and India at 0.65%.

R&D intensity has been rising gradually for European countries. For EU-27 member countries, R&D intensity has increased from about 1.68% in 2000 to 2.12% in 2019 (Figure RD-10; Table SRD-1). For the largest R&D performers among the EU-27 countries, Germany’s ratio has risen the most over this period, from 2.41% to 3.19%, while France’s ratio has had modest increases, from 2.09% to 2.20%. The R&D intensity for the United Kingdom has also increased modestly from 1.62% to 1.76%.

Among top R&D-performing Asian countries, China and South Korea have had the largest increases in R&D intensity in the last two decades (Figure RD-10; Table SRD-1). China’s ratio more than doubled, from 0.89% in 2000 to 2.23% in 2019. South Korea’s ratio has also more than doubled from 2.13% in 2000 to 4.64% in 2019; its growth in R&D intensity has been particularly rapid since the late 1990s (Figure RD-10). Japan’s R&D intensity has fluctuated around 3.10%–3.30% for most of the last decade, having increased from 2.86% in 2000.

The government sector performed more than half of India’s R&D (56%) (Table RD-7). Government-performed R&D ranged from about 7% to 15% for the remaining top eight R&D-performing countries, with China (15%) and Germany (14%) on the higher end and the United Kingdom (7%) and Japan (8%) on the lower end. The higher education sector accounted for 20% or more of R&D performance in France (20%) and the United Kingdom (23%) and for 7%–17% of R&D performance in the remaining top eight countries. India (7%), China (8%), and South Korea (8%) had the lowest shares of R&D performance by this sector.

The business sector is also the predominant source of R&D funding for most top R&D-performing countries; government is the second-largest source (Table RD-7). The business sector accounted for 55%–79% of R&D funding, while the government sector accounted for 15%–33% among the top eight countries, except for India. The government sector is the largest source of R&D funding in India (63%), with the rest (37%) funded by the business sector.

Funding from rest of world refers to funding from businesses, universities, governments, nonprofits, and other organizations located outside of the country. The United Kingdom is the most notable in this category, with about 14% of R&D funding in 2018 coming from foreign sources. Foreign funding was also sizable in France, Germany, and the United States (around 7%–8%), while the rest of the top R&D-performing countries had much lower shares for this funding source.

The distributions of R&D performance and funding have been relatively stable for these countries since 2011 (NSB Indicators 2012, Indicators 2014, Indicators 2016, Indicators 2018, Indicators 2020).

Cross-national comparisons of R&D levels and shares of national R&D performance devoted to basic research, applied research, and experimental development provide useful insights into how countries prioritize their allocation of resources for R&D.

France leads the top eight R&D-performing countries in the share of basic research (23%), although France’s R&D expenditures spent on basic research ($15.6 billion) are relatively low compared to other top R&D-performing countries (Table RD-8). In contrast, China’s basic research share is the lowest among the top R&D-performing countries (6%), but the R&D expenditures for basic research in China ($31.7 billion) are higher than in France. By volume of spending, the United States leads performance of global basic research with $102.9 billion in R&D expenditures in 2019, which accounts for 15% of its total R&D expenditures.

The United Kingdom and France have the largest shares of R&D expenditures devoted to applied research among these countries (each above 40%). Shares for the remaining countries range from 11% (China) to 22%–23% (India and South Korea). By volume of spending, the United States also dominates this category with $132.0 billion of applied research spending in 2019, which accounts for 20% of its total R&D expenditures. The overall volume of spending by the second- and third-ranked countries in this category are comparatively far behind: China, at $59.3 billion, and Japan, at $32.2 billion.

China has the highest share of experimental development by far—83% of its R&D total in 2019, or $434.7 billion of spending in this category. For the United States, the experimental development share was 65%, although the amount of spending was virtually identical to China ($432.0 billion). Other countries with comparatively high shares for experimental development are Japan (65%) and South Korea (63%); the dollar amounts of these countries’ performances, however, were well below the levels for China and the United States.

The R&D expenditure shares by type of R&D reported by the countries have been largely stable over the past several years (NSB Indicators 2012, Indicators 2014, Indicators 2016, Indicators 2018, Indicators 2020).