These charts show how the U.S. could lose its edge in science

November 19, 2013

Could the United States lose its spot as a world leader in scientific research? William H. Press, a scientist at the University of Texas-Austin, is worried about this possibility. And he lays out the case in the latest issue of the journal Science with a few charts (and a lot of words).

Right now, the United States is clearly in the top tier of science spending. The chart below ranks nations both by the percentage of their economies that they devote to research and development and the number of scientists per million people (as of 2011):


R&D spending by country in 2011 by percent of GDP and percent of population who are scientists and engineers. The sizes of the circles show the country's total R&D spending.

The United States spends the most overall on scientific research — more than $70 billion in 2011 — although it doesn't devote the greatest portion of its economy to R&D, and it doesn't have the most scientists per capita. (Finland, surprisingly, dominates here.)

Still, the United States is in good company. Press notes that countries in the upper-right part of the chart tend to be "technology leaders" — the United States, Germany, Japan, South Korea, the Scandinavian countries. A little below them are the "technology followers" — the United Kingdom, France, Canada, Australia and Russia, among others. And developing countries are farther behind (although China is growing fast).

Press goes on to ask how much the United States should be spending on science. There's not a simple answer. First, you have to figure out what R&D is actually worth for growth and prosperity, something economists have puzzled over for many years. Then you have to determine how much research should be conducted by the government and how much by private sources. (Many economists think that private companies tend to under-invest in very basic research because it's hard to capture all of the gains.)

Press concludes that countries that "spend close to 3% of their GDP on R&D are the ones that compete most successfully." The United States has been in that club for the past half-century — though the mix has changed over time, with the federal government taking up less of the slack and private companies taking up more of the burden.


Two views of R&D spending. (A) U.S. total R&D spending as a percent of U.S. GDP. Total spending has fluctuated between about 2.2% and 2.8% since 1957. (B) Same data plotted as a fraction of total R&D spending. Over the period shown, industry's share of R&D funding has increased from about 1/3 to about 2/3. Other nonfederal funding has also grown in share. The U.S. government share has correspondingly decreased.

That's about to change, however. Thanks to the sequestration budget cuts, U.S. federal spending on R&D is expected to decline sharply as a percentage of GDP in the coming years. (See the charts here for more on that.) Private companies may well pick up the slack. But Press worries that this could accelerate a shift toward "development" rather than "basic research." And it's the latter, he says, that's most crucial for long-term growth.

Is that fear warranted? The trends here are fairly hard to read. The chart below focuses solely on trends in basic research over time. For decades, spending on basic R&D has kept pace with economic growth, but lately it's begun to level off:


U.S. R&D spending on basic research in constant 2005 dollars (top curve). Funding sources are shown by the color bands. “Other” includes state and local government and nonprofit organizations. Industry funding of basic research stagnated at about $10 billion in the period 1991–2007, while federal support has stagnated at about $37 billion since 2003 (periods of stagnation shown as shaded).

U.S. government spending on basic R&D has flatlined since about 2003, when adjusted for inflatino. Private industry spending on basic R&D, meanwhile, stagnated from 1990 to 2007 (the shaded areas), picked up dramatically during the recession, but now seems to flattening off again. Meanwhile, basic R&D spending from "other" sources like nonprofits and the states has been rising in recent years.

"Basic research needs to grow at least as fast as the economy because it is part of the feedback loop for most of the economy's growth," Press argues. "Industry support, even if it proves to be on the rise, supplies only a small fraction of what is needed; therefore, federal funding must make up the bulk of the difference. In today's environment of austerity, the rate of increase in federal support needed to make up for a decade of neglect, and to keep pace with the recovering economy, will be a very tough sell."

There's a lot more in the presentation here.

Further reading:

-- A more detailed look at the coming drop in federal R&D spending due to budget pressures.

-- Here's why China isn't likely to overtake the U.S. in science anytime soon.

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