Real Science Growth Is in Asia

February / March 2010 Volume 8 Number 1

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America still produces some of the most well respected science, but with the growth seen in Asia, that may not be the case for much longer, according to new data released from the National Science Foundation.

"Science and technology is no longer the province of rich developed countries," said Rolf Lehming, director of NSF's Science and Engineering Indicators Program. "That opens up opportunities for collaboration. It also brings competitive elements into play," he said.

The indicators are published every two years and represent the most current data available. Here are excerpts from the NSF report.

The United States holds a preeminent position in science and engineering (S&E) in the world, derived in large part from its long history of public and private investment in S&E research and development and education. Investment in R&D, science, technology and education correlate strongly with economic growth, as well as the development of a safe, healthy, and well-educated society. Many other nations, recognizing the economic and social benefits of such investment, have increased their R&D and education spending. This trend will challenge the world leadership role of the United States.

WHAT THESE INDICATORS TELL THE NATION
By selecting a set of general and topical indicators, we seek to contribute to the assessment of the state of U.S. science and engineering and to highlight issues of current opportunity or concern. These measures address an emerging set of trends of particular interest to planners and policy
makers at all levels whose decisions affect our national S&E enterprise.

GLOBAL R&D: MEASURING COMMITMENT TO INNOVATION
HOW MUCH?
R&D expenditures worldwide are estimated to have exceeded $1 trillion in 2007, up from $525 billion a decade earlier.
WHERE?
The United States accounted for about one-third of the $1.1 trillion 2007 worldwide R&D total—€”more than the EU-27 and more than the eight Asian economies with the largest R&D expenditures. The rapidly growing R&D expenditures of the Asia-8 economies (China, India, Japan, Malaysia, Singapore, South Korea, Taiwan, Thailand) surpassed those of the EU-27 in 2003.
INTENSITY
R&D intensity measures how much of a country's economic activity (gross domestic product) its R&D investment represents. Japan committed 3.4 percent of its GDP to R&D in 2007, more than most other large economies, but was surpassed by South Korea. In comparison, R&D intensity was lower in the United States and the EU-27. Over the past decade, R&D intensity has grown in Asia and has remained steady in the United States and EU-27.
GROWTH
Growth of R&D expenditures in the United States and the EU-27 averaged 5 to 6 percent annually over the period 1996—€“2007. Comparable R&D growth rates of the Asia-8 economies often exceeded 10 percent, and in China's case 20 percent. Asian R&D growth reflects rising private spending by domestic and foreign firms as well as increased public R&D spending, designed to support strategic policies that aim to raise economic competitiveness through the development of knowledge-intensive economies.

U.S. R&D: FUNDING AND PERFORMANCE
FUNDING SOURCES
Industry and the federal government are the largest supporters of U.S. R&D. Industry invested $268 billion in R&D in 2008, 67 percent of the estimated $398 billion national total. It has been the main funding source for U.S. R&D since 1980. Federal R&D support in 2008 stood at $104 billion. Other sources—€”chiefly universities and colleges and other not-for-profit organizations—€”added another $26 billion.
TYPES OF R&D
Funding sources differ by type of R&D. Industry funds the bulk of applied research and development ($256 billion of the $328 billion national total in 2008)—€”work that aims at practical applications, new products, or novel processes. Basic research, directed primarily toward increasing knowledge or understanding, has long relied on the federal government for about 60 percent of its support ($39 billion of the 2008 $69 billion national total).
ACADEMIC R&D SUPPORT
The bulk of academic R&D is basic research, amounting to more than half of the nation's total basic research. Sources of support for academic R&D have been stable for nearly two decades: about 60 percent from the federal government, 20 percent from institutions' own funds. Industry funding has gradually declined from 7 percent to about 6 percent.
PERFORMERS
The nature of R&D varies by performer. Industry is the dominant performer of the nation's development and applied research; the federal government, academic institutions, and other nonprofit organizations combined perform less than 20 percent of that total. Universities and colleges are the prime performers of the nation's basic research, a role they uniquely combine with the training of new researchers. Industry's share of basic research performance has recently risen after 9 years of decline.

U.S. R&D: FEDERAL PORTFOLIO
TYPE OF WORK
Federal funding of R&D has more than doubled over 20 years (not adjusting for inflation). Federal basic and applied research funds have grown more rapidly than funds for development work. Consequently, research now makes up about half of federal R&D funds.
SUPPORT FOR S&E FIELDS
The life sciences account for half of the federal portfolio of basic and applied research (development funds cannot be sorted into S&E fields), up from about 40 percent two decades earlier. Funding for physical, environmental and social sciences and funding for engineering have increased at below average rates.
AGENCY SUPPORT
Agencies of the federal government fund R&D that supports the attainment of agency goals. The Department of Health and Human Services funds 85 percent of research in the life sciences ($29.7 billion in 2008), primarily through the National Institutes of Health. The Departments of Defense and Energy and the National Science Foundation support 77 percent of research in math/computer sciences and physical sciences ($8.5 billion). NSF supports research across the range of S&E fields, principally basic academic research. DOD, DOE, and the National Aeronautics and Space Administration support about 71 percent of engineering research ($9.4 billion in 2008).
FOCUS
DOD, long the largest federal R&D funding agency, has increased its R&D support strongly in recent years. More than half of the federal government's R&D investment is devoted to defense. More than half of nondefense R&D is related to health, largely funded by the Department of Health and Human Services, primarily through the National Institutes of Health.
PERFORMERS
Different institutions bring different perspectives and approaches to R&D. Academic and nonprofit institutions, which tend to concentrate on basic research, have received steadily increasing federal support. Industry, heavily focused on development and applied research, has recently seen rising federal funding after a decade of no growth.

U.S. S&E WORKFORCE:TRENDS AND COMPOSITION
WORKFORCE GROWTH
For nearly five decades, the U.S. S&E workforce (those in S&E jobs) has grown faster than the total civilian workforce. It reached about 5.5 million in 2007. The increasing number of U.S. S&E degrees earned and rising numbers of foreign-born scientists and engineers have contributed to this growth.
S&E EDUCATION
For nearly two decades, about one-third of all U.S. college freshmen have indicated plans to pursue an S&E degree. Freshman intentions are a leading indicator of future degree distribution. After about 2000, preferences for the social sciences, psychology and the biological sciences began rising, and preferences for computer sciences began a steep decline. Engineering dropped sharply after 2004 but rebounded in 2008.
NATIONALITY
The U.S. S&E workforce continues to rely heavily on attracting foreign-born scientists and engineers, who are most highly represented in engineering, mathematics and computer sciences, especially at advanced degree levels.

PUBLICATIONS AND PATENTS
PUBLICATIONS
The EU-27 leads the world in numbers of S&E articles published, but the United States continues to be the top country producer. China, with a rapidly developing science base, produced 8 percent of the world's research publications in 2008, becoming the second largest single country producer. It ranked 14th in 1995, with 2 percent of world share.
PATENTS
Patent awards are rising as knowledge-intensive economic activity expands worldwide. Inventors from around the globe seek patent protection in the United States because of its large and open market. U.S. patents awarded to foreign inventors offer a broad indication of the distribution of inventive activity around the globe. Inventors in the United States, the EU-27, and Japan produce almost all of these patents. U.S. patenting by Asian inventors is on the rise, driven by activity in Taiwan and South Korea, but Chinese and Indian patenting remains modest.

GEOGRAPHY OF S&T:GLOBALIZATION OF CAPABILITIES
R&D DISTRIBUTION
The distribution of R&D expenditures has shifted from 1996 to 2007. Asia's share has risen to nearly one-third, driven mostly by China's rapid R&D growth.
RESEARCHERS
The estimated number of researchers grew from about 4 million in 1995 to about 5.8 million in 2007, rising more rapidly in developing than in industrialized countries. The combined U.S./EU-27 share of researchers declined from 51 percent to 49 percent; Japan's share dropped from 17 percent to 12 percent. The combined shares of South Korea, Taiwan, China and Singapore rose from 16 percent to 31 percent.
CROSS-BORDER R&D
Overseas R&D expenditures by foreign affiliates of U.S. multinational companies (MNCs) rose from $12.6 billion in 1995 to $28.5 billion in 2006. Europe's share of these overseas expenditures fell from 73 percent to 65 percent and Asia's share increased from 15 percent to 20 percent. Foreign MNCs spent $34 billion in the United States in 2006, up from $15 billion in 1995. European-owned companies' share of these expenditures was little changed at 75 percent.
HIGH TECHNOLOGY MANUFACTURING
The U.S. and EU-20 shares of world high technology manufacturing output have remained at high levels for more than a decade, measured in value-added terms (broadly, final product sales less the cost of intermediate goods and services). China's rapid growth in high-technology output has driven its substantial world share gain; output decline in Japan in that sector has resulted in a steep share loss.
HIGH TECHNOLOGY EXPORTS
Exports of high technology products (excluding intra-EU trade) expanded from $732 billion in 1995 to $2.3 trillion in 2008, resulting in major shifts in countries' export positions. U.S. and Japan's world high technology export shares fell by about one-third and one-half over the period, respectively; the EU-27's share was stable. China's share more than tripled, reaching 20 percent. Exports of the Asia-8 economies, steady at about 28 percent, included substantial intermediate goods trade with China and other Asian economies.