Two new reports show the growing role of R&D in global economy

April 28, 2022

Globally, research and development (R&D) expenditures hit an estimated $2.4 trillion in 2019, reflecting the increasing importance of R&D to economic growth and to addressing national and global challenges. The United States leads R&D performance globally with 28% of the global R&D total, followed by China with 22%. The United States and China also lead the world as the largest producers of output of Knowledge- and Technology- Intensive Industries (KTI) – industries that globally invest the largest shares of their output in R&D. These are among the findings in Research and Development: U.S. Trends and International Comparisons, published today, and Production and Trade of Knowledge- and Technology- Intensive Industries, published last week by the National Science Board (NSB).

Prepared by the National Center for Science and Engineering Statistics under NSB guidance, the new reports are part of the 2022 edition of the congressionally mandated Science and Engineering Indicators report on the state of the U.S. science and engineering enterprise.   

While overall funding of R&D in the U.S. continues to rise rapidly, the share of basic research funded by the federal government is declining.

“This matters because only the federal government can make strategic, long-term investments to create new knowledge, supporting risks that are difficult for the private sector to undertake,” says NSB member Arthur Bienenstock. “Today’s R&D-intensive industries exist, in part, because the federal government invested in basic research long before the research had a known application.”

KTI industries produce innovative products and technologies that fuel the economy and address challenges ranging from health to national security. In 2019, U.S. KTI industries employed 5.7 million S&E workers, 26% of whom were foreign-born. 

“Our country has long depended on talent from around the world, especially in degree fields that are vital to critical and emerging technologies, such as artificial intelligence and biotechnology,” says NSB Chair Ellen Ochoa. “It’s vital that the U.S. continue to attract foreign talent and actively develop domestic talent. Both are critical for our country’s economy and national security.” 

Other findings:

• The average annual rate of increase in China’s R&D total (10.6% from 2010 – 2019) continues to greatly exceed that of the United States (5.6%).
• The U.S. national R&D intensity (R&D-to-GDP ratio)—a key measure of R&D investment—exceeded 3.0% for the first time in 2019.
• The United States is the largest global producer of KTI services while China is the largest global producer of KTI manufacturing.
• U.S. KTI production is geographically concentrated, with 15 states accounting for 76% of the total value added generated domestically by KTI industries. California accounts for the largest share (25% in 2020), followed by Texas (8%), Washington (6%), and New York (5%).
• During the COVID-19 pandemic (2019-20), the value added generated by KTI industries increased even as GDP declined. Industries that provided products or services that supported remote work and learning and supplied medical products led this increase in output.

About Science and Engineering Indicators
Science and Engineering Indicators is a congressionally mandated report on the state of the U.S. science and engineering enterprise.

About NSB
The NSB identifies issues critical to NSF’s future, establishes its policies, and serves as co-head of agency with the NSF Director. The Board also advises the President and Congress on policy matters related to science and engineering (S&E) and S&E education. Selected for their distinguished service and accomplishments in academia, government, and the private sector, the Board’s 24 presidentially appointed members are leaders in science and engineering, and in science, technology, engineering, and math (STEM) education.

About NCSES
The National Center for Science and Engineering Statistics (NCSES) is the nation's leading provider of statistical data on the U.S. science and engineering enterprise. As a principal federal statistical agency, NCSES serves as a clearinghouse for the collection, interpretation, analysis, and dissemination of objective science and engineering data. 

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