“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’s the essence of a researcher’s calling.
Growth in global research and development funding slowed in 2013 from the pace of growth seen in 2011-2012. The 2013 slowdown was due primarily to unsettled European and U.S. economies that, in turn, affected global performance. R&D investments often are closely linked to GDP and economic outlook.
In the United States, R&D spending is likely to increase in 2014, turning the corner from near-zero growth in 2013. Federal funding is difficult to forecast because of the breakdown of orderly budget processes, but there are indications of bipartisan political support for increases or reallocations that favor R&D.
Federal R&D policy and implications of budget sequestration are the largest factors in funding for U.S. academic research, which has dropped from a recent high of 6% annual funding increases in 2011 to a forecast of 2% in 2014. Long recognized as an essential scientific foundation of U.S. innovation, academic research programs have been under pressure as a result.
For the past six years, the top ten countries funding R&D have remained mostly the same. There has been dramatic change, however, in the extent of globalization involved in research, as well as shifts in the way funds are spent. Driven in part by China’s aggressive programs, Southeast Asia has become the world’s largest region for research investments.
China has increased its R&D investments by 12% to 20% annually for each of the past 20 years; while at the same time, U.S. R&D spending increased at less than half those rates. As a result, China’s investment is now about 61% that of the U.S., and continuing to close.
With the large number of European Union member states, Europe’s research community is diverse in its economic composition and national interests, while central funding and administrative mechanisms allow coordinated operation of public research at a scale that is comparable to that of the United States.
As a group, the “Rest of the World” (ROW) countries—those other than the U.S., those in Europe and China—are expected to see moderate growth in their R&D investments in 2014, with leadership from countries like South Korea, Russia and Taiwan. Most Asian countries are projected to experience significant economic growth in 2014.
Research and development is a long-term investment in the future, serving as the cornerstone for innovation-driven growth. While there is a significant immediate economic impact from R&D activities, the big pay-off from investments in R&D are longer-term sustained economic gains through strengthened global competitiveness and even creation of entire new industries.
As represented in this Forecast, the life science industry includes biopharmaceuticals, medical instruments and devices, animal/agricultural bioscience and commercial research and testing. However, the industry’s R&D spending is driven primarily by the mass and research intensity of the biopharmaceutical sector, which accounts for nearly 85% of all expenditures.
The information and communications technologies (ICT) industry, and the significant level of R&D that supports it, is driven by constant change in consumer preferences, market demand and technological evolution. The ICT industry is the largest private-sector R&D investor in the U.S., performing nearly one-third of the total.
R&D among aerospace, defense and security firms is primarily driven by two sectors: the U.S. Department of Defense (DOD) and the global airline industry. The major aerospace and defense contractors plan R&D in close coordination with DOD to meet the needs of national defense and global security, while capacity, economics and efficiency are drivers for civil aviation requirements.
The energy industry includes a broad array of companies, ranging from multinational oil and gas firms to large and small technology firms. Reducing costs of production is a large driver of R&D in the energy space, and materials development and advanced materials integration are increasingly important in shaping the industry’s R&D investment.
The chemicals and advanced materials industry consists of large multinational companies serving nearly every other market, key single market material and application development firms and an array of smaller, niche chemical and material companies.
The Battelle/R&D Magazine survey of the global research community delivers original insights that indicate the temperament of R&D activities around the world, and adds context to the quantitative analysis involved in this 2014 Forecast.