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Report: Asia Closing Gap in U.S. R&D Leadership

Calculator keys (Jorge Franganillo/Flickr)National Science Foundation’s new report on global research and development (R&D) trends, Science and Engineering Indicators 2012, shows in the last decade, U.S. leadership in research and development has come under severe challenge from China and other countries in Asia. The report from NSF’s policy-making body, the National Science Board, shows between 1999 and 2009, the U.S. share of global R&D dropped from 38 percent to 31 percent, while the share for Asia grew from 24 percent to 35 percent in the same time.

The data show the largest global gains took place in a group of 10 Asian countries that enacted policies aimed at integrating science and technology into their economic growth strategies: China, India, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, and Thailand. In 2009, for example, the U.S. remained the the single largest R&D performing country, with an expenditure of $400 billion. However, in the same year, the 10 Asian countries almost matched that amount at $399 billion; see chart.

Global R&D by Region, 1996 to 2009

Global R&D by Region, 1996 to 2009. Click on image for full-size view. (National Science Foundation)

NSF’s data track the progress of knowledge-and-technology-intensive (KTI) industries over this period, both services and manufacturers. The global output of commercial KTI service enterprises, including financial and communications services, more than doubled, rising $4.9 trillion in 1998 to $11 trillion in 2010. Except for a flat period during the 2007-2009 recession, U.S. value in KTI services rose steadily during this period, from less than $2 trillion in 1998 to $3.6 trillion in 2010.

European KTI service companies also rose during this period from $1.3 to $2.9 trillion, but suffered declines during the 2001-2002 and 2007-2009 recessions. The value of KTI service companies in Japan, China, and other Asian countries rose modestly over this period, closing in 2010 between $0.5 and $1.0 trillion.

High-tech manufacturing, however, shows a somewhat different story, according to data in the report. The five high-technology manufacturing industries, as defined by OECD, in 2010 accounted for $1.4 trillion in value and include: communications equipment and semiconductors ($512 billion), pharmaceuticals ($346 billion), scientific instruments ($275 billion), aerospace ($137 billion), and computers and office machinery ($127 billion).

The U.S. share of the total rose from $250 billion in 1998 to $360 billion in 2010, with negative or flat growth during the 2001-2002 and 2007-2009 recessions. Europe suffered a sharp drop in output for this sector after 2008, from which it had not recovered by 2010. China’s KTI manufacturing output rose steadily during this period to $240 billion in 2010, only a little less than Europe.

The recessions appear to have significantly affected U.S. employment in high-tech manufacturing, despite the rise in output for American companies in this sector. Over this period, the number of employees in these five industries dropped from about 2.5 million in 1998 to 1.8 million in 2010. The sharpest drops in employment occurred following the recessions in 2001-2002 and 2007-2009. During this period, employee productivity rose markedly, about doubling to more than $200 million per 1,000 employees in 2010.

The number of U.S. patents granted to U.S. inventors dropped from 54 percent in 1992 to 49 percent in 2010, according to data from the U.S. Patent and Trademark Office. Patent awards to European and Japanese inventors also declined in this period, while U.S. patents for Chinese inventors increased to 3 percent in 2010, from a low starting point of 0.5 percent in 1992. The rest of Asia (excluding China and Japan) increased its percentage of U.S. patents by 15 points, led by Korean and Taiwanese inventors.

The report breaks out what it calls “high-value patents,” those deemed valuable enough to seek protection in the U.S., Europe, and Japan. Citing OECD statistics, the report notes that the percentage of high value patents for U.S. and European inventors stayed at about 30 percent from 2000 to 2008, while the Japanese share dropped somewhat from 32 to 27 percent. The rest of Asia’s share of high-value patents, excluding China, grew from about 2 to 5 percent, while the rest of the world’s share (including China) stayed at about 6-7 percent over that period.

Read more. Report: U.S. Scientific Dominance Slipping

Photo: Jorge Franganillo/Flickr

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