The globalization of research and development efforts has become a process that enhances a country’s produc- tion capabilities, educational infrastructure, economic
well-being as well as the overall global human experience. It
pits country against country in a mostly peaceful competitive
manner and drives each country to excel in all of its endeavors.
Japanese automotive R&D, for example, forces American
cars to be more fuel efficient, more reliable and less costly.
Chemical research in China provides raw materials with fewer
production emissions, higher quality levels and ones which are
less reliant on natural resources. U.S. R&D on new computing
technologies and products advances the global knowledge base
and step-wise improvements for all future technologies. And
U.S. agricultural R&D gives the underprivileged third world
populations enough food to survive another day.
But while fully globalized R&D is a theoretically desirous
outcome, it is often viewed with some naivete. The technological capabilities of one country have often been stolen or raided
by other country’s agents without due compensation or legal
procedures. Specifically, China has been accused of spying on
and stealing industrial and military secrets from the United
States and European technology organizations.
China has done this to more rapidly advance their industrial
and military capabilities without going through the time-consuming and expensive processes of R&D required to produce
an end product. Russia (Soviet Union), Germany and Japan
have also been accused (and often convicted) of similar activities in the past to gain a competitive advantage.
Additionally, China’s immense govern-ment-controlled economy and consumer
base has often resulted in trade deals that are
heavily biased in favor of China. Specifically,
if an outside company wants to do business
in China, they are first required to build a
production facility in China and then provide
China with the proprietary knowledge of
how to produce those products. The outside
company thereby gains access to the Chinese
marketplace, but loses much of its intellectual
property (IP). Few countries have this type of
consumer-supplier leverage. And fewer still
become this parochial in their trade dealings
Many of these situations arise due to the inherent innovation and educational capabilities
of the countries. As noted earlier in this report
(Industrial Section, page 14), the Global Innovation Index 2018 (GII) provides a ranking
of the specific innovation capabilities of most
global countries (126).
The higher-ranking countries are predomi-
nantly European, with 23 of the top 34 coun-
tries ranked. The U.S. is ranked 6th, Japan is 13th, China is 17th
and Russia is ranked 46th. A loose relationship exists between
R&D Magazine’s Global R&D Funding Forecast ranking (shown
on page 5 of this report) and the GII rankings—countries with
low levels of R&D investments (Africa, South America, Carib-
bean and some Asia) also have low GII rankings.
As noted in the accompanying charts, the U.S. continues to
lead the world in specific technology sectors, overall R&D
investments and also in gaining the most in R&D. U.S. is
second behind top responded China. These charts are the
results of R&D Magazine’s annual reader surveys performed
during August 2018. As can be seen, China is gaining fast on
the U.S.’s lead—and over other countries—and this is due to a
variety of reasons.
These reasons include continued strong R&D and science/
technology (ST) investments, hacking/theft of external IP, and
an educational system that is producing scientists and engineers at a faster rate than anywhere else in the world. China is
ranked second in six technology sectors for our 2019 Global
R&D Funding Forecast, and this country was only ranked second in five technology sectors in our 2018 Global R&D Funding
Forecast. Also, China leaped over Germany in the energy sector
in our 2019 study.
As the production of consumer and industrial products
has been completely globalized, the globalization of R&D has
similarly spread out technological expertise around the world.
International R&D Competition Heats Up
FUNDING FORECAST International R&D
Countries Gaining the Most in R&D
U.S. Canada U.K. Germany France China Japan India S.Korea Russia