Over the last decade, the OECD countries’ share in global Research and Development (R&D) spending has slipped from 90% to 70%, according to the latest report OECD Science, Technology and Industry Outlook 2014. The study draws on a policy survey conducted every two years in more than 45 economies, among which OECD members, BRIICS countries (Brazil, Russia, India, Indonesia, China and South Africa) and some other developing countries such as Malaysia, Argentina, Colombia and Costa Rica. The report shows that the EU, Japan and US are the advanced countries that have the highest impact in reducing the weight of advanced economies in R&D. However, in spite of the decreasing trend, OECD countries are for the moment keeping the primacy of R&D spending, with an amount surpassing USD 1.1 trillion (EUR 8.9 billion) compared to USD 330 billion (EUR 265 billion) in the BRIICS. 

According to the findings, the economic crisis squeezed R&D budgets of most OECD governments and businesses: over the period 2008-12, the average annual growth in R&D spending was 1.6%, half the rate of the pre-crisis period. In most countries, 10% to 20% of business R&D is funded with public money, using various investment instruments and government targets. The report warns that with public finances still tight in many countries, the ability of governments to compensate for lower business R&D with public funding, as they did during the worst of the economic downturn, has become more limited.

In contrast, China’s R&D spending doubled between 2008 and 2012. Its gross domestic expenditure on R&D in 2012 was USD 257 billion (EUR 207), reducing its gap to the American USD 397 billion (EUR 319), and not too far away from the USD 282 billion of the EU (EUR 227). If the current trends are to continue, China is on track to become the world’s top R&D spender by 2020. However, today South Korea is the world’s most R&D intensive country, spending 4.36% of GDP on R&D in 2012, overtaking Israel (3.93%) and versus the OECD average of 2.40%. Also, together with China, South Korea is now the main destination of scientific authors from the US and the two countries are among the few experiencing a net ‘brain gain’ over the period 1996-2011. 

OECD