Biennial Report Shows US at Risk of Losing Global R&D Leadership to China

["Dave Farber" <dave () farber net>]

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Subject: Biennial Report Shows US at Risk of Losing Global R&D Leadership
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*Number 7: January 23, 2017*

Biennial Report Shows US at Risk of Losing Global R&D Leadership to China

While the U.S. continues to lead in many science and engineering measures,
including overall R&D spending, China is rapidly catching up with the U.S.
in the rankings, according to the National Science Board’s latest Science
and Engineering Indicators report.

On Jan. 18, the National Science Board released the biennial Science and
Engineering Indicators, a congressionally mandated report that provides
extensive, policy-neutral information on the state of the global science
and engineering (S&E) enterprise. Accompanying the report is a digest
<https://aip-info.org/1ZJN-5EY7R-E29DH7-2Z2IWM-1/c.aspx> that highlights 42
indicators grouped into themes such as R&D spending, STEM education and
workforce, invention and innovation, and the public understanding of
science.


The report finds that the world’s nations are continuing to accelerate the
growth of their knowledge- and technology-intensive economies. And as in
other recent iterations, the report documents how the S&E landscape —
historically concentrated in the U.S., Europe, and Japan — is rapidly
shifting as China and other countries continue to increase their R&D
investments.


The report makes clear that while the U.S. remains the global leader in
many S&E measures — such as total R&D investment, advanced S&E degree
production, and venture capital investment — China has continued its rapid
rise in the rankings.
China R&D spending up 18 percent annually on average since 2000

Global R&D expenditures have more than doubled since 2005, according to the
report, growing at an average rate between 6.3 and 7 percent per year.
Three regions — East/Southeast and South Asia, North America, and Europe
— comprise 90 percent of the nearly $2 trillion total.


The U.S. remains the world leader in overall R&D spending, growing an
average of 4 percent per year between 2000 and 2015. However, Asian
economies surpassed both the U.S. and Europe as having the largest
concentration of R&D spending, rising from 25 percent of the global share
in 2000 to 40 percent in 2015.


China has seen by far the largest R&D growth, accounting for almost
one-third of the global increase over that period and reaching 21 percent
of the global total in 2015 with an average growth rate of 18 percent per
year. At the same time, North America and Europe saw their global shares
decrease to 28 percent and 22 percent, respectively.

The rapid growth of S&E economies in China and other Asian countries also
contrasts with the relative stagnation in U.S. R&D intensity — a measure of
R&D expenditure as a percentage of GDP. Although U.S. R&D intensity has
stayed relatively stable, hovering near 2.7 percent in recent years, it
dropped in global ranking from eighth place in 2009 to eleventh place in
2015. Meanwhile, China and South Korea’s R&D intensities have doubled since
2000, reaching 2.1 percent and 4.2 percent, respectively, in 2015.

The report notes that while federal R&D funding has generally increased
annually since the 1950s, the government’s share of total U.S. R&D spending
has steadily declined, reaching a historic low of 24 percent in 2015 – far
below the peak of 67 percent in 1964. The report says this trend is
primarily due to business R&D growth outpacing federal spending. It also
identifies the reduction in federal R&D funding in the period following the
Great Recession as a factor.



However, the federal government remains the largest funder of basic
research, providing $37 billion or 44 percent of the total. At a release
event for the report on Jan. 18, National Science Foundation Director
France Córdova stressed the impact federal investment has in sustaining
U.S. leadership in S&E, saying:

We may be an innovation leader today, but other nations are rapidly gaining
ground. It is not inconceivable that we may be overtaken in time. Our
investment in basic research must remain a national priority.
R&D competition ‘not a zero-sum game’

When asked at the release event to elaborate on the report’s findings, NSB
member Geraldine Richmond, who oversaw the report’s assembly, said that the
board is concerned with how current trends in U.S. R&D funding may impact
the country’s leading role in S&E. She warned that the ongoing decline of
federally-funded R&D *“will continue to erode [the U.S.’] ability to be
competitive to the level that you see other countries rising, such as
China.” *



Richmond noted that while scientific and technological progress in China
and other nations generates competition for the U.S., it is *“not a
zero-sum game.”* The expansion of the global R&D landscape, she said, also
creates new opportunities for international collaboration and innovation.



Richmond also highlighted the rising trend of R&D specializations, such as
China’s interest in digital communications, semiconductors,
telecommunications, and optics. Therefore, in the context of an
increasingly interconnected world, she said *“The big question is where do
we want [the U.S.] to lead in S&T, and where are we content to
participate?”*



While the Trump administration has scaled back
<https://aip-info.org/1ZJN-5EY7R-E29DH7-2Z2IWN-1/c.aspx> support for larger
multinational scientific collaborations, it has also reinforced bilateral
partnerships. Last year, the U.S. and China signified
<https://aip-info.org/1ZJN-5EY7R-E29DH7-2Z2IWO-1/c.aspx> their commitment
to extend their long-standing S&T agreement, which was last renewed in 2011.
Congress takes note of China’s R&D rise

The rising competition in S&E, particularly that posed by China, has been a
focus of several recent congressional hearings. These hearings highlighted
that the Chinese government has taken an aggressive approach to rapidly
grow R&D in several areas, particularly artificial intelligence, quantum
technology, and space technology. These areas are among a number of
priority science projects identified in China’s current five-year strategic
plan <https://aip-info.org/1ZJN-5EY7R-E29DH7-2Z2IWP-1/c.aspx> for social
and economic development, which also emphasizes innovation as the primary
engine for economic growth. The plan establishes China’s goal of achieving
a 2.5 percent R&D intensity by 2020.



House Science Committee Chair Lamar Smith stressed the importance of
maintaining U.S. leadership in quantum technologies at a hearing
<https://aip-info.org/1ZJN-5EY7R-E29DH7-2Z2IWQ-1/c.aspx> last October,
pointing out that China has *“successfully sent the first-ever quantum
transmission from Earth to an orbiting satellite.”* He said that *“Although
the **U.S. retains global leadership in the theoretical physics that
underpins quantum computing and related technologies, we may be slipping
behind others in developing the quantum applications.”*



Meanwhile, at a Jan. 9 House Armed Services Subcommittee hearing
<https://aip-info.org/1ZJN-5EY7R-E29DH7-2Z2IWR-1/c.aspx> on China’s pursuit
of emerging technologies, Subcommittee Chair Elise Stefanik (R-NY) noted
that China’s plans for technology innovation comprise *“a top-down,
government-driven agenda that provides a roadmap for strategic
collaboration between industry, academia, and civil society.”* She said
that the U.S. should reflect on the Chinese government’s recognition of
innovation as a driver of economic growth, and called for *“a
national-level dialogue for science and technology policy”* that will
encompass both defense and the broader economy.

*Contact the Author*


*Alexis Wolfe*

American Institute of Physics

awolfe () aip org <awolfe () aip org>

(301) 209-3182

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It also provides recommendations for the National Oceanic and Atmospheric
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*Read More > <https://aip-info.org/1ZJN-5EY7R-E29DH7-2Z2IWS-1/c.aspx>*

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<https://aip-info.org/1ZJN-5EY7R-E29DH7-2Z2IWT-1/c.aspx>*


At a recent House Energy and Commerce Committee hearing, participants
touched on a wide range of issues related to the Department of Energy,
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*Read More > <https://aip-info.org/1ZJN-5EY7R-E29DH7-2Z2IWT-1/c.aspx>*

*The Week of January 22
<https://aip-info.org/1ZJN-5EY7R-E29DH7-2Z2IWU-1/c.aspx>*


- Science Agencies Shut Down
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*Read More > <https://aip-info.org/1ZJN-5EY7R-E29DH7-2Z2IWU-1/c.aspx>*

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