R&D spending is a recurring theme in the international foot race, so I have found it interesting to look at where we stand in this regard. The National Science Foundation (NSF) tracks private and public R&D spending on an annual basis (the latest figures being 2002 preliminary). For 1953 through 2002, I have plotted spending against our economy, as measured by the Gross Domestic Product (NIPA Table 1.1).
Overall, it is clear that industry-funded R&D has grown in importance, while government-funded R&D has declined in importance. With regard to government-funded R&D, there were a couple of non-recurring drivers over the last 50 years. As discussed in a previous post, the Apollo program represented a huge R&D effort for our country, and was done concurrently with the Cold War R&D build-up. The other driver was the defense R&D build-up of the Reagan administration. On the whole nowadays, defense-related R&D represents about 70% of all government-funded R&D, or about 0.4% of the economy.
Here is a look at the amounts spent by other countries, as compiled and charted by the NSF. Since 1999, the year listed for the US, R&D has increased from 2.63% to 2.79% of the economy.
No other countries besides the US and Israel spend much on defense R&D, so when making comparisons, subtract about 0.4 percentage points from the US total. Subtracting defense, the relevant comparison would be 3% of GDP for Japan, 2.4% for the US, and 1.8% for the EU. Here is a somewhat dated NSF plot of 20 years of R&D spending as a percentage of the G8 economies.
One of the interesting divergences is among EU countries. Germany has been increasing its R&D spending as a percentage of GDP impressively over the last several years, while spending in France and the UK has declined. I have a pretty good idea why this is so, which I will discuss in another post in the future.
Notes and Sources: Please see the underlying spreadsheet for all of these calculations. I note that there are two other categories of funding tracked in addition to those that I plotted: (1) Universities and colleges; and (2) non-profit organizations. These funding categories are minimal for our purposes here--a combined $15 billion in 2002. All 2001 and 2002 funding figures are preliminary.