R&D investment up prior to COVID-19

The latest official statistics for research and development (R&D) indicate that, prior to the onset of the COVID-19 pandemic, R&D expenditure in the OECD area grew in real terms by 4% in 2019. According to the latest data published on 18 March in the OECD Main Science and Technology Indicators (MSTI) database, OECD R&D intensity (domestic expenditure on R&D expressed as a percentage of gross domestic product (GDP)) rose from 2.4% in 2018 to nearly 2.5% in 2019. As observed in 2018 and 2017, this increase was driven by faster real growth of R&D expenditure (+4%) compared to GDP (+1.6%). The figures show Australia well below the OECD average on R&D intensity.

Best performers

In 2019, the United States, Japan, Germany, Korea and France were the largest R&D performers in the OECD area. In comparative purchasing power terms, China is the world’s second-largest R&D player, with total R&D expenditure reaching 80% of that of the United States in 2019, up from 26% in 2005.

Business R&D

In 2019, total growth in real expenditure on R&D in the OECD area was primarily driven by growth in R&D performed by businesses. The Business Enterprise sector, which accounts for 71% of all R&D performance in the OECD area, saw its R&D expenditure increase by 4.6% in 2019.

R&D investment in 2020

As of March 2021, R&D budgets in the OECD are estimated to have increased in real terms by 6.2% in 2020, based on data for the countries that have already disclosed their R&D budgets to the OECD. This estimate represents a marked increase over 2019, when R&D budgets increased by 3.2% on the previous year. Such an increase may reflect a combination of enhanced R&D funding authorised before the pandemic and additional emergency support in the course of the year, especially for health-related R&D to develop vaccines and treatments in response to COVID-19.

To read the report in full, visit msti-highlights-march-2021.pdf (oecd.org).