A Look at Top Countries Spending the Most on R&D

How Much Do Countries Spend on High-Tech and R&D?

It is not surprising that innovation fuels economic growth. It is instrumental at both macro and micro levels. At the heart of it, research and development (R&D) plays a crucial role, underpinning new breakthroughs. Data from the UNESCO Institute for Statistics (UIS) reveals that the global spending on R&D has reached a record high of almost US$1.7 trillion. Out of it, 80% of spending is being held by nearly 10 countries. Many developing nations are luring foreign direct investment to their R&D process. R&D spending also drives private sector growth and job creation. Let's find out which countries are spending most on research and development.

Israel

Israel's scientific and technological policies support the country to enhance its competitive position. It has the highest R&D intensity in the world with gross domestic expenditure on R&D. As per the World Bank data, Israel spent 4.95% of GDP on R&D in 2018. Most of the investments went into computer systems, cybersecurity, AI and medical research. Israel frequently invests in R&D projects, both in the country and throughout the world. Last May, Prime Minister Benjamin Netanyahu announced to invest US$60 million in R&D for a coronavirus vaccine.

South Korea

South Korea is the most innovative and advanced country in the world. The country spends 4.3% of its GDP, nearly US$70 billion, on R&D. Between 1960 and 2019, South Korea registered GDP growth averaging 7.3% per year. The country has a booming tech industry, with a large defence sector. The country is spending heavily to attain its goal. In 1999, its investment in research and development totalled 2.07% of its GDP, just below the average for nations in the OECD.

Germany

Research and development are the cornerstones of the future of the German economy. The German federal government encourages research through the High-Tech Strategy. This initiative defines areas of particular significance because of their contribution to solving global challenges. The public and private sectors have made a significant commitment to spend around 3% of national GDP per year on R&D activity, rising to 3.5 percent by 2025.

Finland

Finland spent 2.77% of its GDP on R&D in 2018, according to the World Bank. In the 2021 state budget, the total appropriations for R&D activities amount to EUR 2,416.8 million, a decline of 22%, EUR 681.7 million, from the previous year. The proportion of funds allocated to R&D activities of overall government spending exclusive of debt servicing is 3.8%. The GDP share of public R&D funding is an estimated 0.99% in 2021.

Switzerland

Switzerland is one of the leading countries in the field of research and innovation. It is also among the countries with the highest R&D spending regarding their GDP. The country spent 3.37% of its GDP on research and development in 2017. Switzerland leads international rankings in research and innovation, in terms of academic publications and patent applications, for example. Additionally, Swiss academic publications are highly regarded among the international scientific community.

United States

Tech companies lead the R&D investment in the United States. As per the report, businesses spent US$441 billion on research and development performance in the country in 2018, a 10.2% increase from 2017. The U.S. is recognized as the world's biggest economy. Based on the 2018 data, the country spent 2.84% of its GDP on research and development.

China

China is rapidly boosting its spending on research and development activities. As per the data from the National Bureau of Statistics, the country's R&D expenditure hit a record-high 2.4% of its GDP in 2020. China moves forward rapidly to become the world leader in science and innovation by 2050. "Made in China 2025", announced in 2015, delineates the country's strategy to lead the world in terms of high-tech industries, including robotics, aerospace equipment, medical devices, etc.

India

India's gross expenditure in R&D has tripled between 2008 and 2018 driven mainly by the government sector and scientific publications, placing the country internationally among the top few. The data is carried from the R&D Statistics and Indicators 2019-20 based on the national S&T survey 2018 brought out by the National Science and Technology Management Information (NSTMIS), Department of Science and Technology (DST). In 2017-18, the country spent 0.7% of its GDP on research and development. The report on R&D indicators illustrates that with the rise in publication, India is globally at the 3rd position as per the NSF database, and 3rd in the number of PhD in science & engineering.

Other countries are also accelerating their R&D spending to contribute to their economic growth. Japan's expenditures on research and development reached nearly 19.53 trillion Japanese yen in the fiscal year 2018, according to Statista. The country's R&D spending was around 3.6% of its GDP in the measured time period.