The Global Innovation Revolution

BERKELEY – As countries around the world struggle to lay the foundations for stronger sustainable growth in the future, they would do well to focus on policies that encourage innovation. Empirical studies across time and countries confirm that innovation is the primary source of technological change and productivity growth. And investments in research and development, as well as in the scientific and engineering workforce on which they depend, are critical drivers of innovation and national competitiveness.

A new study by the National Science Board, the governing body of the National Science Foundation in the United States, examines trends in such investments for both individual countries and regions. These trends indicate that the global landscape for innovation changed significantly during the last decade.

That landscape is likely to change further as several Asian economies, particularly China and South Korea, increase their investments in R&D and scientific and engineering education to secure their place as significant hubs of innovation. At the same time, crushing debt burdens may compel the US, Europe, and Japan to reduce their investments in these areas.

The US remains the global leader in R&D investment, spending an estimated $400 billion in 2009 – a total boosted by President Barack Obama’s stimulus package, and higher than China, Japan, and Germany combined. But, in terms of R&D spending as a share of GDP, the US ranked only eighth in 2009 (at 2.9% of GDP). The US share remained above the OECD average, but this was mainly the result of national differences in the amount of R&D defense spending.