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Emerging markets top global R&D spending league

Published on 04/02/16 at 09:52am
Spending graph
Korea spent more than $1400 per capita on R&D in 2014, OECD data shows

Data from the Organisation for Economic Co-operation and Development (OECD) shows Korea and Israel are investing much more in research and development than other advanced economies.

The data, which shows gross domestic expenditures on R&D (GERD) for 41 countries in 2015 – OECD members plus Argentina, China, Chinese Taipei, Romania, Russia, Singapore and South Africa. It reveals that Korea spent 4.29% of its GDP on R&D, followed by Israel at 4.11%. In third place, Japan spent 3.58%.

Provisional data shows Japan had the most R&D investment funded by industry in 2015, at 77.3%, followed by Chinese Taipei (77.2%), China (75.4%), Korea (75.3%) and Slovenia (68.4%). Much of the spend was financed from internal sources, with all top five countries apart from Slovenia gaining less than 1% of R&D finance from abroad. Slovenia, however, looked to foreign investment – gaining 9.3% of its R&D funding from abroad.

The data also shows that China has edged further ahead of Europe in R&D investment, spending more on R&D in absolute terms than the 28 European countries in the OECD for the first time in 2015.

China’s R&D spending has risen steadily from 0.57% of GDP in 1995. In 2015, China invested 2.05% of its GDP in R&D, passing the 2% goal set the Chinese government set in its 2006-10 economic plan. By comparison the 28 European Union countries in the OECD, which includes the UK, averaged 1.94%, and fell well below the EU’s target to spend 3% of GDP on R&D by 2020.

In volume terms (at current prices), China’s 2014 R&D spending was equivalent to 80% of the US level in 2013 and it stood at 102% of the EU total. The number of patents filed by Chinese inventors continued to rise, placing China behind only the US and Japan in filings.

Among the lower spenders, the UK came in 21st in the table for R&D expenditure as a percentage of GDP, at 1.7%, and 23rd when ranked according to per capita R&D expenditure in US dollars, at $683 per capita. The per capita figure is below both the OECD and European averages.

OECD countries spent an average of 2.37% of GDP on R&D in 2014, unchanged from 2013. Annual spending rose 2.1% in real terms in 2014 in the OECD area, down from 2.8% in 2013. Most of the growth is from business R&D (up 2.8%), while R&D spending in government institutions rose just 1.0% and R&D in higher education slipped by 0.2%. The most recent available data for the United States shows it spent 2.74% of GDP on R&D in 2013.

Lilian Anekwe

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