2014 R&D Magazine Global Funding Forecast Executive Summary
“Somewhere, something incredible is waiting to be known,” said astronomer Carl Sagan, who succinctly captured the essence of what it means to be a researcher.
That wide-eyed sense that anything is possible through research and development—that we can help solve some of the most critical challenges by increasing our knowledge and understanding of the world—that’s the essence of a researcher’s calling.
But innovation is improbable without proper funding, so we project how political developments and economic conditions around the globe will affect R&D support in 2014. This forecast is for policymakers and researchers alike because of the multiplier effect R&D investment can have, both in economic and cultural terms. There is an important relationship between economic growth and research and development, between industry creation and political stability, and between the nurturing of research and sowing the seeds of a middle class in developing nations.
While R&D funding isn’t the sole indicator of how a nation, region or industry will perform, it certainly is a fundamental consideration among other factors like science, technology, engineering and mathematics education levels, capital markets, healthcare, infrastructure, property rights and immigration policy.
Each section of this report forecasts research and development levels for 2014, closely examining the expected funding for a region or industry. There are many important projections and key findings for each country and industry under discussion.
Among the most far-reaching projections for 2014 are the following:
U.S. tops the list, but China is closing in:
- The ranking of the top ten countries as measured by R&D spending isn’t expected to change in 2014, with the U.S. reprising its role as the dominant force in global research across numerous industries.
- U.S. federal spending on R&D, a large contributor to R&D momentum in the U.S., is in turmoil because of enormous pressures to pare federal spending, especially defense and aerospace budgets.
- The growth in China’s R&D budgets will far outpace those of the U.S., which has resumed modest growth that is expected to be relatively stable through 2020.
- At the current rates of growth and investment, China’s total funding of R&D is expected to surpass that of the U.S. by about 2022.
Who is spending the big money:
- In 2014, ten countries will spend about 80% of the total $1.6 trillion invested on R&D around the world; the combined investments by the U.S., China and Japan will account for more than half of the total.
- Together, the U.S., China, Japan and Europe account for about 78% of 2014’s $1.6 trillion total.
How major U.S. industries will invest:
- For 2014, we project declines in defense and aerospace R&D, increases in energy-related research, increases in life science research and development, strong growth in information technology research investment and growth in R&D budgets for chemicals and advanced materials.
Key research investment trends around the globe:
- Given the current, weak economic environment in Europe, large increases in R&D investments are not expected for the next several years.
- Emphasis by Southeast Asian countries on economic growth through increased R&D investments is likely to continue through the end of the decade.
- Significant R&D investments by western countries in long-range technology platforms like robotics, high-performance computing, social media, software, cost-effective energy sources and nanobiotechnology could stimulate rapid industry-scale economic growth.
The research standouts in the "Rest of the World":
- The “Rest of the World” countries are expected to undergo moderate growth in R&D investment in 2014, with leadership from countries like South Korea, Russia and Taiwan.
- Most Middle East countries will experience strong GDP growth in 2014, but are constrained by weak R&D infrastructure—with exceptions such as Israel and Qatar.
- Africa is expected to see strong GDP growth, but is also limited by under-developed R&D capabilities—with the exception of South Africa.
- Strong GDP growth is expected in South America, but this region also lags in R&D capacity—even Brazil appears to be under-performing expectations.