China is expected to take the lead in research and development spending around 2022

Global research and development (R and D) spending is forecast to grow by 3.8 percent—or $60.0 billion—to $1.6 trillion in 2014, according to the closely watched annual forecast by Battelle and R and D Magazine. After a flat year of R and D spending in 2013, the U.S. is projected to show modest growth while China is expected to continue its two-decade upward trajectory in R and D investment.

Industry Snapshots

Life Sciences: The biopharmaceutical sector accounts for 85 percent of all expenditures in the life sciences industry that also includes medical instruments and devices, animal/agricultural bioscience and commercial life science research and testing. The global industry is forecast to have a healthy recovery after a flat 2013, increasing 3.1 percent to $201 billion in 2014. In the U.S., a small projected rebound of 2.2 percent would increase spending to about $93 million, with growth primarily coming from smaller biopharmaceutical innovators and medical device manufacturers.

Information and Communication Technologies: This industry is the largest private-sector R&D investor in the U.S., performing nearly one-third of the total, and is expected to grow by 5.4 percent to $146 billion in 2014. U.S. firms also are dominant globally and will account for more than half of the industry’s worldwide R and D expenditures of $257 billion in 2014. Cloud computing and associated technologies will remain the major R and D thrust for the foreseeable future.

China’s PPP research and development spending is a bit over half of the US level and almost double the level of Japan. China is projected to pass the 30 countries of the EU in about 2019 and pass the US in about 2022 in R and D spending.

Here is the 37 page 2014 forecast report on global research.

Trends

Significant R and D investments by Western countries in long-range technology platforms such as robotics, high-performance computing, social media, software, cost-effective energy sources and nanobiotechnology could stimulate rapid industry-scale economic growth.

The civilian and defense aerospace industries are seeing the creation of more efficient, cost-effective capabilities that are offsetting reduced government funding. These are occurring via internal R and D and technological integration in materials, electronics and communication and surveillance technologies.

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