No. 1, But Slipping

Staff Writer
Columbus CEO

The United States is still the top spender in research and development worldwide, but China is coming on strong.

The Battelle Global R&D Funding Forecast, released in mid-December, anticipates spending will grow by about 5.2 percent in 2012 to top $1.4 trillion. Asian economies are expected to be a driving force, with R&D spending projected to grow nearly 9 percent throughout Asia and 13.7 percent in China.

On the flip side, North American R&D is expected to increase by a paltry 2.8 percent. U.S. growth is projected at 2.1 percent, but with inflation estimated at 2 percent, spending will be pancake-flat.

China’s R&D has historically been pooh-poohed as substandard, but “that’s proving to be less and less true,” says Battelle research leader Martin Grueber, co-author of the report, conducted with R&D Magazine. “They’re putting significant efforts not only in the research and development itself, but in improving that whole process.”

While the scenario is unlikely, Grueber notes, if the U.S. (2012 spending: $436 billion) and China ($199 billion) continue on their respective trajectories, the countries will spend the same amount on R&D by 2023.

Other findings:

• Private industry spending, the largest chunk of U.S. R&D dollars, is expected to reach $279.6 billion in 2012, a 3.75 percent increase over 2011.

• U.S.-funded defense research will be almost $75 billion in 2012—more than the total R&D spending of every country but China, Japan and Germany.

• Life sciences spending in the U.S. will drop 5.7 percent to $73.2 billion amid belt-tightening in the pharmaceutical industry.

• In the U.S., energy-related research will grow 23.1 percent from 2011 levels, to nearly $6.7 billion. Worldwide, energy spending is expected to swell by 7.8 percent, to $17.9 billion.

Reprinted from the February 2012 issue of Columbus C.E.O. Copyright © Columbus C.E.O.