Israel and South Korea are the world’s leading spenders on research and development (R&D) as a percentage of gross domestic product (GDP). In pure dollar terms, however, the United States is consistently the largest spender on R&D. Let's take a look at which other countries are the highest spenders in R&D and what they invest in.
It's important to note that there can be many criteria to evaulate R&D spend. In this article, we'll primarily look at R&D spend compared to a country's GDP.
Key Takeaways
- Israel and South Korea lead global R&D spending as a percentage of GDP, while the United States dominates in pure dollar terms.
- Israel's growth is fueled by programs like Yozma, attracting foreign investors and promoting venture capital funds.
- South Korea planned a 4.6% increase in 2022 R&D spending, emphasizing global tech leadership and allocating funds to numerous projects.
- Switzerland, though not top spenders, has been consistently recognized as the most innovative country for 13 years by some non-financial metrics.
- The U.S. 2023 budget proposes a significant increase in federal R&D funding, focusing on science, technology, pandemic preparedness, and climate innovation.
Israel
Research and Development, % of GDP: 5.56%
Israel has also seen an extended period of expansion in terms of research and development. The Israeli government has introduced a number of programs over the last few decades to promote growth, and the business sector has also stepped up. One of the programs that has had the biggest impact on Israel's growth in R&D is "Yozma," which is the Hebrew word for initiative. Yozma invested in venture capital funds and drew foreign investors by offering them insurance on risk.
Korea
Research and Development, % of GDP: 4.93%
The Korea Presidential Advisory Council on Science and Technology approved a 4.6% increase in 2022 research and development spending, totaling 23.5 trillion won (roughly $20.7 billion). Emphasizing the need for global technology leadership, the council planned in invest in nearly 1,200 projects with 21.3 trillion won allocated to 892 ongoing projects and 1.9 trillion won for 290 new areas.
It may not have made this list based on dollars and GDP, but Switzerland has been recognized as the most innovative country by the World Intellectual Property Organization 13 years in a row, most recently in 2023.
Belgium
Research and Development, % of GDP: 3.46%
Belgium's government has consistently evolved as a global innovator, contributing a higher percentage of its GDP every year since 2005. The European Commission notes Belgium as an "Innovation Leader" compared to the rest of the EU with the country's strengths residing in finance, firm investments, product innovation, and export of innovative goods. The World Economic Forum also notes Belgium as one of the top innovation spenders in Europe.
While South Korea and Israel lead the spending charge on a percentage of GDP basis, the U.S. is first and China is second on a dollar basis.
United States
Research and Development, % of GDP: 3.46%
The President's 2023 Budget proposed a substantial increase in Federal R&D funding. Biden's proposal reached $204.9 billion and focused on leveraging the full potential of science and technology for the benefit of the American people.
The budget allocated $110.9 billion for basic and applied research. The budget also addressed critical areas such as pandemic preparedness, earmarking $81.7 billion over five years at the Department of Health and Human Services for new funding in this regard, including significant R&D investments. Additionally, $16.9 billion in discretionary funding was allocated for climate innovation.
Sweden
Research and Development, % of GDP: 3.42%
In 2022, the Swedish government allocated an estimated SEK 43.5 billion for R&D in 2022, reflecting a decrease of SEK 540 million in fixed prices compared to the previous year. Note that about half of the research funding during the year was directed towards enhancing overall knowledge advancement at universities and colleges. The amount spent ended up actually being approximately SEK 940 million less than the 2021 allocation in fixed prices.
What Country Has the Most Innovative Technology?
There are different ways to measure technological innovation. For example, the World Economic Forum notes 33 technology pioneer companies being in North America with 23 being in Europe.
What Initiatives Does the U.S. Government Take to Support and Promote R&D?
The U.S. government supports and promotes research and development across various industries through initiatives such as the National Institutes of Health (NIH), the National Science Foundation (NSF), and the Department of Energy (DOE). These agencies provide funding, grants, and collaborative programs to stimulate innovation in fields ranging from healthcare and biotechnology to energy and technology.
How Does the U.S. Government Facilitate Collaboration Between Industry, Academia, and Research Institutions?
The U.S. government actively fosters collaboration between industry, academia, and research institutions to advance R&D initiatives. Programs like the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) facilitate partnerships, while federal grants encourage joint projects that bridge the gap between theoretical research and practical applications.
The Bottom Line
There's different ways to measure the most innovative countries in the world. One potential measure is to see what country spends the most on research and development. In this article, we've looked at the countries that spend the most on R&D compared to that country's GDP. With this criteria, Israel, Korea, and Sweden top the list.
