Korea is world leader in R&D spending, China ahead of EU, OECD data shows

By on 04/02/2016

Korea and Israel are investing much more in research & development as a share of GDP than other advanced economies with lower public R&D budgets holding back spending in many countries, new OECD data shows.

China has edged further ahead of Europe, spending more on R&D in absolute terms than the EU-28 for the first time in 2014.

Gross Domestic Expenditures on R&D data for 41 economies in 2014 show Korea spent 4.29% of its GDP on R&D in 2014, followed by Israel at 4.11%. In third place, Japan spent 3.58%.

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China invested 2.05% of its GDP in R&D, passing the 2% goal set in its 2006-10 economic plan. The EU-28 averaged 1.94%, well below the bloc’s target to spend 3% of GDP on R&D by 2020.

In an indication of 2015 trends, provisional 2015 government budget data for 19 OECD countries shows public R&D spending slowing again after briefly stabilising in 2014. The figures do not include the (off-budget) cost of tax incentives for business R&D, where they exist, which have been increasing in many countries but not always enough to offset budget cuts. Of the 19 countries, two thirds reduced their public R&D budgets in real terms, leaving the total for the group down 1.3%.

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China’s R&D spending has risen steadily from 0.57% of GDP in 1995. It surpassed the UK in 2011 and the EU in 2012, as a share of GDP. EU R&D spending has risen only gradually from 1.60% of GDP in 1995. The 9% rise in China’s 2014 R&D spending was its lowest growth rate in real terms since 1996.

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.

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.

See also: 

World Bank official to lead Open Government Partnership

Hong Kong Tops Global Infrastructure Ranking

About Winnie Agbonlahor

Winnie is news editor of Global Government Forum. She previously reported for Civil Service World - the trade magazine for senior UK government officials. Originally from Germany, Winnie first came to the UK in 2006 to study a BA in Journalism & Russian at the University of Sheffield. She is bilingual in English and German, and, after spending an academic year abroad in Russia and reporting for the Moscow Times, Winnie also speaks Russian fluently.

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