In
industrialized nations, R&D investment has risen from an average of about
1.5% of Gross Domestic Product (GDP) in 1980 to about 2.0% today.
Vast numbers of university students around
the globe are enrolled in engineering and scientific disciplines—many of them
dreaming about potential rewards if their future research efforts become
commercialized.
Global research
collaboration (between companies and between companies and universities) is
booming, as is patenting.
In fact, it is
difficult for patent authorities in the U.S.
and elsewhere to keep up with
demand.
Globalization, immigration and
cross-national collaboration have such a dramatic effect on research and design
that nearly one-half of all patents granted in America list at least one
non-U.S.
citizen as a co-inventor.
Major
U.S.
universities, like the University of Texas and the University of
Wisconsin, as well as universities in such nations as China, Korea and
Singapore, are eager to patent their inventions and reap the benefits of
commercialized research.
Top research
universities earn millions of dollars each in yearly royalties on their
patents.
The “2019 Global R&D Funding Forecast,” published by the Industrial Research
Institute and R&D Magazine,
estimates global spending on research and development at $2.32 trillion for
2019, on a PPP or “purchasing power parity” basis.
“PPP” means that the amounts are adjusted to
account for the difference in the cost of living from nation to nation,
relative to the United States.
For
example, PPP analysis finds
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In
industrialized nations, R&D investment has risen from an average of about
1.5% of Gross Domestic Product (GDP) in 1980 to about 2.0% today. Vast numbers of university students around
the globe are enrolled in engineering and scientific disciplines—many of them
dreaming about potential rewards if their future research efforts become
commercialized. Global research
collaboration (between companies and between companies and universities) is
booming, as is patenting. In fact, it is
difficult for patent authorities in the U.S. and elsewhere to keep up with
demand. Globalization, immigration and
cross-national collaboration have such a dramatic effect on research and design
that nearly one-half of all patents granted in America list at least one
non-U.S. citizen as a co-inventor. Major
U.S. universities, like the University of Texas and the University of
Wisconsin, as well as universities in such nations as China, Korea and
Singapore, are eager to patent their inventions and reap the benefits of
commercialized research. Top research
universities earn millions of dollars each in yearly royalties on their
patents.
The “2019 Global R&D Funding Forecast,” published by the Industrial Research
Institute and R&D Magazine,
estimates global spending on research and development at $2.32 trillion for
2019, on a PPP or “purchasing power parity” basis. “PPP” means that the amounts are adjusted to
account for the difference in the cost of living from nation to nation,
relative to the United States. For
example, PPP analysis finds that the cost of buying a given standard of living
is considerably lower in China or India than it is in the U.S. Thus, $1 spent in China or India has more
purchasing power than $1 spent in America.
The U.S.
continues to lead the world in terms of total investment in research and
development, at about $581 billion during 2019, up from $566 billion one year
earlier. However, it ranks behind many
other industrialized nations in terms of R&D as a percent of GDP, at
2.84%. For example, Japan’s annual
spending on R&D is estimated at 3.50% of GDP and South Korea’s is 4.35%
Massive research
outlays and grants are made by the U.S. federal government. The proposed federal research budget for
fiscal 2020 was $134.1 billion (down from $140.6 estimated for the previous
year). Substantial federal research
dollars are flowing into such areas as advanced batteries, electronic patient
health records, cancer research, nanotechnology, robotics, biotechnology,
defense and renewable energy. Government
research grants feed projects at universities throughout the U.S. and at many
types of private corporations. The
United States was expected to account for 24.98% of total global R&D in
2019, compared to 20.31% for Europe and 44.24% for Asia. Asia’s share is up from 43.53% in 2018.
Many of the 50
U.S. states are also active in funding local research efforts. This generates significant competition
between tech-savvy states for leading-edge research efforts, at both corporate
and university facilities.
Meanwhile, U.S.
corporations continue to fund massive engineering projects and research budgets
of their own. Top research investors
among U.S. companies include Amazon, Alphabet (Google), Merck & Co.,
Pfizer, Microsoft, IBM, Johnson & Johnson and Intel.
Engineering,
science and research and development provide large numbers of well-paying jobs
in America and around the world.
Officially, the U.S. Bureau of Labor Statistics (BLS) estimates 1.49
million people working in architectural and engineering services as of March
2019. In addition, as of its mid-2018
survey, the same source counts 1.17 million in life, physical and social
sciences. As of March 2019, BLS
categorizes 715,900 Americans as employed in scientific research and
development positions.
Corporations
know that they must invest in R&D in order to stay competitive, but in many
cases their R&D strategies are evolving.
One change is the way in which funding is allocated. Strategies are shifting to include more
alliances and joint ventures with other companies; more subsidiary spin-offs
based on established technologies; more contracts and cooperative efforts with
federal labs and agencies; and higher grants and projects of greater scope in
partnership with universities. Companies
are looking for ways to leverage their R&D investments in order to get more
return on costs while gaining competitive advantage on a global scale.
Historically,
corporate America’s R&D dollars were spent at labs within the bounds of the
U.S., but today, more and more projects are going to company-owned or
outsourced labs overseas. Due to relatively
low costs and large talent pools (including large numbers of new graduates with
engineering and scientific degrees), the nations of Eastern Europe, China and
India in particular have been attracting more of the total research dollars
invested by major companies. Other hot
beds of research include Singapore, Taiwan and Korea.
China has the
fastest-growing research budget in the world, and by 2020, the government’s
goal is to invest 2.5% of GDP annually in research.
According to the
2019 Global R&D Funding Forecast,
India’s investment in R&D is an estimated 0.86% of GDP in R&D for 2019,
or about $94.06 billion on a PPP basis, putting it in a league with the UK and
France in total spending. Technical
education is emphasized in India for a select group of students, particularly
at its famous Indian Institute of Technology (IIT) campuses.
Certain
countries have the lion’s share of R&D activity. Corporations with the largest R&D budgets
are nearly all headquartered in the U.S. and Canada in North America; in the
UK, France, Germany, Switzerland, The Netherlands, Sweden and Italy in the
European region; and in the Asia-Pacific nations of China, Taiwan, Japan, South
Korea and Singapore. Korean government
leaders are focused on increasing basic research capabilities and basic
sciences, particularly at research-oriented universities.
Technology-oriented
Israel invests very high amounts of GDP (4.04% or about $13.63 billion on a PPP
basis in 2019) in research and development, and that nation has created one of
the world’s most successful high tech industries. Finland and Sweden also spend very high
ratios of their domestic economies on R&D.