{{Short description|General term for activities in connection with corporate or governmental innovation}} {{Redirect|R&D|the video game mod|Research and Development (Half-Life 2: Episode Two){{!}}''Research and Development'' (Half-Life 2: Episode Two)}} {{Multiple issues| {{Update|developments in (a) USA since Barack Obama and (b) elsewhere since that time|date=June 2021}} {{More citations needed|date=March 2020}} }} thumb|upright=1.8|Cycle of research and development thumb|upright=1.6|Spending on research and development as share of GDP (2015) '''Research and development''' ('''R&D''' or '''R+D''')<ref>{{Cite web|url=https://www.europarl.europa.eu/factsheets/en/sheet/66/policy-for-research-and-technological-development|title = Policy for research and technological development | Fact Sheets on the European Union | European Parliament| date=31 March 2023 }}</ref> is the set of innovative activities undertaken by corporations, wealthy industrialists (such as Alfred Lee Loomis), or governments in developing new services or products.<ref name="cbo">{{cite web |title=Research and Development in the Pharmaceutical Industry |url=https://www.cbo.gov/publication/57126 |publisher=US Congressional Budget Office |access-date=29 August 2024 |date=April 2021}}</ref><ref>{{cite book |title=A Dictionary of Aviation |first=David W. |last=Wragg |isbn=9780850451634 |edition=first |publisher=Osprey |year=1973 |page=223}}</ref><ref name="investopedia">{{Cite news|url=http://www.investopedia.com/terms/r/randd.asp|title=Research And Development – R&D|author=Investopedia Staff|date=2003-11-25|work=Investopedia|access-date=2017-12-12|language=en-US}}</ref> R&D constitutes the first stage of development of a potential new service or the production process.
Although R&D activities may differ across businesses, the primary goal of an R&D department is to develop new products and services to answer questions, solve problems, and drive innovation.<ref name=cbo/><ref name="investopedia"/>
R&D differs from the vast majority of corporate activities in that it is not intended to yield immediate profit, and generally carries greater risk and an uncertain return on investment.<ref name=cbo/><ref>{{Cite journal|last1=Yiu|first1=L. M. Daphne|last2=Lam|first2=Hugo K. S.|last3=Yeung|first3=Andy C. L.|last4=Cheng|first4=T. C. E.|date=2020|title=Enhancing the Financial Returns of R&D Investments through Operations Management|url=https://onlinelibrary.wiley.com/doi/abs/10.1111/poms.13186|journal=Production and Operations Management|language=en|volume=29|issue=7|pages=1658–1678|doi=10.1111/poms.13186|s2cid=216529963|issn=1937-5956|hdl=10397/89881|hdl-access=free}}</ref>
R&D is crucial for acquiring larger shares of the market through new products.<ref name="investopedia"/> '''R&D&I''' represents R&D with innovation.<ref>EUROPEAN COMMISSION https://ec.europa.eu/competition/state_aid/cases/220403/220403_758165_5_1.pdf</ref><ref>Expenses for university R&D&I increase moderately in Spain https://www.eurekalert.org/pub_releases/2021-07/ucid-efu072221.php {{Webarchive|url=https://web.archive.org/web/20210726013320/https://www.eurekalert.org/pub_releases/2021-07/ucid-efu072221.php |date=2021-07-26 }}</ref><ref>Research, Development and Innovation (R&D&I), Fundação Para a Ciência e Tecnologia https://www.fct.pt/dsi/idi/index.phtml.en {{Webarchive|url=https://web.archive.org/web/20220907114622/https://www.fct.pt/dsi/idi/index.phtml.en |date=2022-09-07 }}</ref>
==Background== {{owidslider |start = 2023 |list = Template:OWID/Researchers in rd per million people#gallery |location = commons |caption = |title = |language = |file = link=|thumb|upright=1.6|Researchers in rd per million people |startingView = World }} New product design and development is often a crucial factor in the survival of a company. In a global industrial landscape that is changing fast, firms must continually revise their design and range of products. This is necessary as well due to the fierce competition and the evolving preferences of consumers. Without an R&D program, a firm must rely on strategic alliances, acquisitions, and networks to tap into the innovations of others.
In the context of commerce, "research and development" normally refers to future-oriented, longer-term activities in science or technology, using similar techniques to scientific research but directed toward desired outcomes with broad forecasts of commercial yield.<ref>{{Cite web|url=http://chartsbin.com/view/41854|title=Research and Development Employees by Country|last=ChartsBin|website=ChartsBin|access-date=2019-02-06}}</ref> In the United States, a typical ratio of research and development for an industrial company is about 3.5% of revenues; this measure is called "R&D intensity".<ref>{{Cite web |title=R&D expenditure - Statistics Explained - Eurostat |url=https://ec.europa.eu/eurostat/statistics-explained/index.php?title=R%26D_expenditure |archive-url=https://web.archive.org/web/20250705195242/https://ec.europa.eu/eurostat/statistics-explained/index.php?title=R%26D_expenditure |archive-date=2025-07-05 |access-date=2025-07-28 |website=ec.europa.eu |language=en |url-status=live }}</ref> A high technology company, such as a computer manufacturer, might spend 7% or a pharmaceutical companies such as Merck & Co. 14.1% or Novartis 15.1%. Anything over 15% is remarkable, and usually gains a reputation for being a high technology company such as engineering company Ericsson 24.9%, or biotech company Allergan, which tops the spending table with 43.4% investment.<ref name="fn_2">All figures [http://www.innovation.gov.uk/rd_scoreboard/ UK R&D Scoreboard] {{webarchive|url=https://web.archive.org/web/20051027005836/http://www.innovation.gov.uk/rd_scoreboard/ |date=2005-10-27 }} {{As of|2006|lc=on}}.</ref> A system driven by marketing is one that puts the customer's needs first, and produces goods that are known to sell.<ref>{{Cite news|url=https://hbr.org/1998/11/business-marketing-understand-what-customers-value|title=Business Marketing: Understand What Customers Value|last1=Anderson|first1=James C.|date=1998-11-01|work=Harvard Business Review|access-date=2019-02-06|last2=Narus|first2=James A.|issue=November–December 1998|issn=0017-8012}}</ref> Market research is carried out, which establishes the needs of consumers and the potential niche market of a new product.
Research and development has been widely linked to productivity growth, though the relationship is complex and varies across industries. Investing in R&D is found to be positively associated with profitability, as well as higher productivity, as shown in studies conducted by the National Bureau of Economics<ref>{{Cite journal |last=Minasian |first=Jora |date=1962 |title=The Economics of Research and Development |url=https://www.nber.org/system/files/chapters/c2115/c2115.pdf |journal=The Rate and Direction of Inventive Activity: Economic and Social Factors |pages=93-142}}</ref>. Research from 2000 has shown that firms with a persistent R&D strategy outperform those with an irregular or no R&D investment program.<ref>{{Cite book|url=https://books.google.com/books?id=0MGICwAAQBAJ&q=Research+from+2000+has+shown+that+firms+with+a+persistent+R&pg=PA286|title=The SAGE Handbook of Research Management|last1=Dingwall|first1=Robert|last2=McDonnell|first2=Mary Byrne|date=2015-06-26|publisher=SAGE|isbn=9781473914452|language=en}}</ref> Measuring the effects of R&D can be difficult due to knowledge spillovers and changes in innovation. Statistics on organizations devoted to "R&D" may express the state of an industry, the degree of competition or the lure of progress.<ref>{{Cite book|url=https://books.google.com/books?id=fax-DwAAQBAJ&q=Statistics+on+organizations+devoted+to+%22R&pg=PT659|title=Biotechnology Fundamentals|last=Khan|first=Firdos Alam|date=2018-09-03|publisher=CRC Press|isbn=9781498723459|language=en}}</ref> Data regarding patents are often used as a measure of the effects of R&D, however they do not capture all forms of innovation. Some other common measures include: budgets, and on rates of peer-reviewed publications. Bank ratios are one of the best measures, because they are continuously maintained, public and reflect risk.
==Business R&D== thumb|Mercedes Benz Research Development North America (13896037060) ===Benefit by sector=== In general, it has been found that there is a positive correlation between the research and development and firm productivity across all sectors, but that this positive correlation is much stronger in high-tech firms than in low-tech firms.<ref>{{cite journal |last1=Ortega-Argiles |first1=Raquel |last2=Potters |first2=Lesley |last3=Vivarelli |first3=Marco |date=2011 |title=R&D and productivity: testing sectoral peculiarities using micro data |journal=Empirical Economics |volume=41 |issue=3 |pages=817–839 |doi= 10.1007/s00181-010-0406-3|hdl=10419/35059 |s2cid=59130979 |url=https://econpapers.repec.org/RePEc:iza:izadps:dp3338 |hdl-access=free }}</ref><ref>{{cite journal|last1=Ortega-Argiles|first1=Raquel|last2=Piva|first2=Mariacristina|last3=Vivarelli|first3=Marco|author-link3=Marco Vivarelli|date=2011|title=Productivity Gains from R&D Investment: Are High-Tech Sectors Still Ahead?|journal=IZA Discussion Papers|publisher=IZA|issue=5975|pages=1–22}}</ref> In research done by Francesco Crespi and Cristiano Antonelli, high-tech firms were found to have "virtuous" Matthew effects while low-tech firms experienced "vicious" Matthew effects, meaning that high-tech firms were awarded subsidies on merit while low-tech firms most often were given subsidies based on name recognition, even if not put to good use.<ref>{{cite journal |last1=Crespi |first1=Francesco |last2=Antonelli |first2=Cristiano |date=2011 |title=Matthew Effects and R&D Subsidies: Knowledge Cumulability in High-Tech and Low-Tech Industries |journal=Working Papers |publisher=Università degli Studi Roma Tre |issue=140 |pages=1–24 }}</ref> While the strength of the correlation between R&D spending and productivity in low-tech industries is less than in high-tech industries, studies have been done showing non-trivial spillover effects to other parts of the marketplace by low-tech R&D.<ref>{{cite journal |last=Mendonca |first=Sandro |date=2009 |title=Brave Old World: Accounting for 'High-Tech' Knowledge in 'Low-Tech' Industries |journal=Research Policy |volume=38 |issue=3 |pages=470–482 |doi= 10.1016/j.respol.2008.10.018}}</ref> Even if low-tech firms do not produce a large breakthrough, they can still increase their "absorptive capacity," which improves their ability to glean knowledge from their surroundings and apply them to new endeavors.<ref>{{Cite journal |last=Cohen |first=Wesley M. |last2=Levinthal |first2=Daniel A. |date=1990 |title=Absorptive Capacity: A New Perspective on Learning and Innovation |url=https://www.jstor.org/stable/2393553 |journal=Administrative Science Quarterly |volume=35 |issue=1 |pages=128–152 |doi=10.2307/2393553 |issn=0001-8392|url-access=subscription }}</ref>
===Risks=== Research and development is difficult to manage, since the defining feature of research is that the researchers do not know in advance exactly how to accomplish the desired result. As a result, "higher R&D spending does not guarantee more creativity, higher profit or a greater market share".<ref>{{cite web|title=Aerospace and Defense: Inventing and Selling the Next Generation|url=http://csis.org/files/publication/090520_diig_aerospace.pdf|website=Center for Strategic and International Studies|publisher=Center for Strategic and International Studies, International Security Program|access-date=6 August 2017|pages=1|language=en|date=December 5, 2009|archive-date=28 July 2011|archive-url=https://web.archive.org/web/20110728100600/http://csis.org/files/publication/090520_diig_aerospace.pdf|url-status=dead}}</ref> Research is the most risky financing area because both the development of an invention and its successful realization carries uncertainty including the profitability of the invention. Business R&D is risky for at least two reasons. The first source of risks comes from R&D nature, where an R&D project could fail without residual values. The second source of risks comes from takeover risks, which means R&D is appealing to bidders because they could gain technologies from acquisition targets.<ref>{{Cite journal|last1=Bena |first1=Jan |last2=Kai |first2=Li |date=2014|title=Corporate innovations and mergers and acquisitions.|journal=The Journal of Finance |volume=69 |issue=5|pages=1923–1960|doi=10.1111/jofi.12059 |hdl=10.1111/jofi.12059 |hdl-access=free }}</ref> Therefore, firms may gain R&D profit that co-moves with takeover waves, causing risks to the company which engages in R&D activity.<ref>{{Cite journal |doi=10.2308/accr-51270|title=The R&D Premium and Takeover Risk|journal=The Accounting Review|volume=91|issue=3|pages=955–971|year=2016|last1=Lin|first1=Ji-Chai|last2=Wang|first2=Yanzhi (Andrew)|hdl=10397/65000 |hdl-access=free}}</ref> One way entrepreneurs can reduce these uncertainties or risks is to buy the license for a franchise, so that the know-how is already incorporated in the license.<ref name="auto">{{Cite web|url=https://investor-partner.co.uk/|archive-url=https://web.archive.org/web/20150908111838/http://investor-partner.co.uk/business-dictionary/42/invention-finance|url-status=usurped|archive-date=8 September 2015|title=Invention Finance|website=investor-partner.co.uk}}</ref> This is considered "external knowledge acquisition." However, as noted by Cassiman and Veugelers (2006), while buying external technology can reduce uncertainty, it is still often the most effective when used to complement, rather than completely replace, a firm's internal R&D activities<ref>{{Cite journal |last=Cassiman |first=Bruno |last2=Veugelers |first2=Reinhilde |date=2006 |title=In Search of Complementarity in Innovation Strategy: Internal R&D and External Knowledge Acquisition |url=https://www.jstor.org/stable/20110484 |journal=Management Science |volume=52 |issue=1 |pages=68–82 |issn=0025-1909}}</ref>.
===Global=== thumb|Since the 1960s, private businesses in the U.S. have provided an increasing share of funding for research and development, as direct federal funding waned.<ref name="NSF_R&D_2023">{{cite web |last1=Anderson |first1=G. |last2=Moris |first2=F. |title=Federally Funded R&D Declines as a Share of GDP and Total R&D |url=https://ncses.nsf.gov/pubs/nsf23339 |publisher=National Science Foundation, National Center for Science and Engineering Statistics |archive-url=https://web.archive.org/web/20231003235103/https://ncses.nsf.gov/pubs/nsf23339 |archive-date=3 October 2023 |date=2023 |quote=NSF 23-339 |url-status=live }}</ref>Global R&D management is the discipline of designing and leading R&D processes globally, across cultural and lingual settings, and the transfer of knowledge across international corporate networks.<ref>Chiesa, V. (2001). R&D Strategy and Organisation, Imperial College Press</ref> Gassmann and von Zedtwitz (1999) identify five ways in which research and development takes shape in the international sphere. Most simply, there is ethnocentric centralized R&D, through which all efforts are kept within a country in order to preserve said country's technological benefits. Geocentric centralized R&D efforts are still physically located within said home country, but the company or party of interest is interested in more global perspectives and collaboration. Third, there is polycentric decentralized R&D, in which R&D labs are spread out and each serves its own market or community.<ref name=":1">{{Cite journal |last=Gassmann |first=Oliver |last2=von Zedtwitz |first2=Maximilian |date=1999-03-01 |title=New concepts and trends in international R&D organization |url=https://www.sciencedirect.com/science/article/pii/S0048733398001140 |journal=Research Policy |volume=28 |issue=2 |pages=231–250 |doi=10.1016/S0048-7333(98)00114-0 |issn=0048-7333|url-access=subscription }}</ref> The fourth global R&D shape described by Gassmann and von Zedtwitz (1999) is the "R&D hub model," where a strong centralized authority delegates tasks to "spokes" around the world. Finally, there are integrated R&D networks, which are the most modern form of global research and development. Through these integrated networks, research hubs are interconnected all around the world and knowledge flows in all directions.<ref name=":1" />
==Government expenditures== {{further|Public research and development}}
===United States=== {{See also|Federally funded research and development centers}} Former President Barack Obama requested $147.696 billion for research and development in FY2012, 21% of which was destined to fund basic research.<ref>{{Cite book|url=https://fas.org/sgp/crs/misc/R41098.pdf|title=Federal Research and Development Funding: FY2011|publisher=Library of Congress, Congressional Research Service|year=2011|editor-last=Sargent|editor-first=John F Jr|oclc=1097445714}}</ref> According to National Science Foundation in U.S., in 2015, R&D expenditures performed by federal government and local governments are 54 and 0.6 billions of dollars.<ref>{{Cite web|url=https://www.nsf.gov/statistics/2018/nsb20181/assets/1038/research-and-development-u-s-trends-and-international-comparisons.pdf|title=Research and Development: U.S. Trends and International Comparisons, National Science Foundation.}}</ref> The federal research and development budget for fiscal year 2020 was $156 billion, 41.4% of which was for the Department of Defense (DOD).<ref>{{Cite web|date=17 December 2020|title=Federal Research and Development (R&D) Funding: FY2021|url=https://crsreports.congress.gov/product/pdf/R/R46341|access-date=20 February 2021}}</ref> DOD's total research, development, test, and evaluation budget was roughly $108.5 billion.<ref>{{Cite web|date=February 2020|title=RDT&E Programs (R-1)|url=https://comptroller.war.gov/Portals/45/Documents/defbudget/fy2021/fy2021_r1.pdf|access-date=20 February 2021|website=Office of the Undersecretary of Defense (Comptroller)}}</ref> R&D spending for the US in 2023 was $937 billion, with $138 billion allocated for basic research, $174 billion for applied research $625 billion for experimental development. <ref>{{Cite journal |last=National Center for Science and Engineering Statistics (NCSES) |date=2026-02-27 |title=U.S. R&D Totaled $937 Billion in 2023; Estimate for 2024 Indicates Further Increase to $993 Billion |url=https://ncses.nsf.gov/pubs/nsf26314 |language=en |archive-url=http://web.archive.org/web/20260429041336/https://ncses.nsf.gov/pubs/nsf26314 |archive-date=2026-04-29}}</ref><gallery mode="packed" heights="120"> File:The Jet Propulsion Laboratory (9416811752).jpg|The Jet Propulsion Laboratory, California File:Learning Research and Development Center, Pitt.jpg|Learning Research and Development Center, Pittsburg File:Mercedes Benz Research Development North America (13896049248).jpg|Mercedes Benz Research Development North America File:National Museum of the U.S. Air Force-Research and Development Gallery.jpg|National Museum of the U.S. Air Force-Research and Development Gallery </gallery>
=== Israel === {{See also|Science and technology in Israel}} Israel is the world leader in spending on R&D as a percentage of GDP as of 2022, spending 6.02%.<ref>{{Cite web |title=R&D as a percentage of GDP by country 2022 |url=https://www.statista.com/statistics/732269/worldwide-research-and-development-share-of-gdp-top-countries/ |access-date=2024-07-02 |website=Statista |language=en}}</ref> According to CSIS, During the 1970s and 1980s Israel initially built up Israel's research infrastructure through various programs, often in the defence industry. In 1984, a law for Encouragement of Research and Development in Industry encouraged the commercial sector to invest in R&D in Israel as well as empowered the Office of Chief Scientist In the 1980s to 1992, the Chief scientist of Israel significantly expanded R&D subsidies in the Israeli industrial sector.<ref name=":0">{{Cite web |title=Sustaining Israel's Innovation Economy {{!}} Perspectives on Innovation {{!}} CSIS |url=https://www.csis.org/blogs/perspectives-innovation/sustaining-israels-innovation-economy |access-date=2024-07-02 |website=www.csis.org |language=en}}</ref> Israel invested in the creation of clusters of startups in the high-tech sector as well as venture capital investments. In 1993, Israel initiated the Yozma program, which led to the doubling of value of Israel's 10 new venture capital funds in 3 years.<ref name=":0" /> In the late 1990s, Israel was second only to the US in private equity as a share of the general economy.<ref name=":0" /> The high tech sector in Israel, known as Silicon Wadi, which earned Israel the nickname - Start-up Nation, was ranked the 4th leading startup ecosystem in the world by Startup genome with a value of $253billion in 2023.<ref>{{Cite web |last=Genome |first=Startup |title=Startup Genome |url=https://startupgenome.com/ecosystems/tel-aviv |access-date=2024-07-02 |website=Startup Genome |language=en}}</ref><gallery mode="packed" heights="100"> File:Microsoft Israel R&D Center LTD. (4).jpg|Microsoft Israel R&D Center File:General Motors R&D center, Herzliya.jpg|General Motors R&D, Israel File:Technion Computer Science Faculty.jpg|Technion, Computer Science faculty File:Image-Weizmann Institute edit.jpg|Weizmann Institute, koffler accelerator File:AstroRad NASA.jpg|Israeli StemRad astronaut anti radiation suit, picture by NASA </gallery>
=== South Korea === South Korea is one of the leading countries in terms of R&D spending, in addition to having "some of the world’s highest innovation inputs in terms of human capital and research spending."<ref name=":2">{{Cite journal |last=OECD |date=2023-07-31 |title=OECD Reviews of Innovation Policy: Korea 2023 |url=https://www.oecd.org/en/publications/oecd-reviews-of-innovation-policy-korea-2023_bdcf9685-en.html |journal=OECD Reviews of Innovation Policy |language=en |doi=10.1787/bdcf9685-en|url-access=subscription }}</ref> However, in recent years, the country has experienced some slowdown in terms of R&D efficiency. In a 2023 report, The OECD gave Korea numerous suggestions on how to continue to grow their research and development industry. Some of their key suggestions include moving from a "fast-follower" model (improving existing tech) to a "first-mover" model (original, high-risk discovery), as well as strengthening their research system on the whole. Furthermore, OECD emphasizes the need for South Korea to keep up with the ever-changing needs of society and address global transitions in order to ensure their R&D efforts are up to date and efficient.<ref name=":2" />
===European Union=== Europe is lagging behind in R&D investments from the past two decades<ref>{{Cite book |last=European Commission. European Political Strategy Centre. |url=https://data.europa.eu/doi/10.2872/9356120 |title=The future of European competitiveness.Part A, A competitiveness strategy for Europe . |date=2025 |publisher=Publications Office |location=LU |doi=10.2872/9356120}}</ref>.The target of 3% of gross domestic product (GDP) was meant to be reached by 2020, but the current amount is below this target. This also causes a digital divide among countries since only a few EU Member States have R&D spending.<ref name=":133">{{Cite web |date=2023-02-28 |title=Innovation overview 2023 |work=European Investment Bank |url=https://www.eib.org/en/publications/innovation-overview-2023 |language=EN}}</ref>
Research and innovation in Europe are financially supported by the programme Horizon 2020, which is open to participation worldwide.<ref>{{cite web|url=http://europa.eu/rapid/press-release_MEMO-13-1085_en.htm|title=European Commission – PRESS RELEASES – Press release – Horizon 2020 – the EU's new research and innovation programme|website=europa.eu}}</ref>
A notable example is the European environmental research and innovation policy, based on the Europe 2020 strategy which will run from 2014 to 2020,<ref>{{Cite web|url=http://europa.eu/rapid/press-release_MEMO-11-848_en.htm?locale=en|title=European Commission – PRESS RELEASES – Press release – Horizon 2020: Commission proposes €80 billion investment in research and innovation, to boost growth and jobs|website=europa.eu|language=en|access-date=2017-12-12}}</ref> a multidisciplinary effort to provide safe, economically feasible, environmentally sound and socially acceptable solutions along the entire value chain of human activities.<ref>{{Cite web|url=http://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:02013R1291-20150704|title=EUR-Lex – 02013R1291-20150704 – EN – EUR-Lex|website=eur-lex.europa.eu|language=en|access-date=2017-03-16}}</ref>
Firms that have embraced advanced digital technology devote a greater proportion of their investment efforts to R&D. Firms who engaged in digitisation during the pandemic report spending a big portion of their expenditure in 2020 on software, data, IT infrastructure, and website operations.<ref name=":34">{{Cite book |url=https://www.eib.org/en/publications/digitalisation-in-europe-2021-2022 |title=Digitalisation in Europe 2021–2022: Evidence from the EIB Investment Survey |date=2022-05-05 |publisher=European Investment Bank |isbn=978-92-861-5233-7 |language=EN}}</ref><ref name="presscorner">{{Cite web |title=Press corner |url=https://ec.europa.eu/commission/presscorner/home/en |access-date=2022-05-31 |website=European Commission – European Commission |language=en}}</ref> A 2021/2022 survey found that one in every seven enterprises in the Central, Eastern and South Eastern regions (14%) may be classed as active innovators — that is, firms that spent heavily in research and development and developed a new product, process, or service — however this figure is lower than the EU average of 18%. In 2022, 67% of enterprises in the same region deployed at least one sophisticated digital technology, and 69% EU firms did the same.'''<ref name=":115">{{Cite book |url=https://www.eib.org/en/publications/20220265-econ-eibis-2022-cesee |title=EIB Investment Survey 2022 – CESEE overview |date=2023-01-11 |publisher=European Investment Bank |isbn=978-92-861-5435-5 |language=EN}}</ref>'''
As of 2023, European enterprises account for 18% of the world's top 2 500 R&D corporations, but just 10% of new entrants, compared to 45% in the United States and 32% in China.<ref>{{Cite book |url=https://www.eib.org/en/publications/20230323-investment-report-2023 |title=EIB Investment Report 2023/2024: Transforming for competitiveness |date=2024-02-07 |publisher=European Investment Bank |isbn=978-92-861-5648-9 |language=EN}}</ref>
As of 2024, the electronics sector leads in R&D investment, with 28% of its total investment dedicated to it. This is followed by textiles (19%), digital (18%), and aerospace (15%). Other sectors allocate less than 10% of their total investment to R&D.<ref name=":204">{{Cite book |url=https://www.eib.org/en/publications/20230325-post-covid-recovery-and-green-transition-an-ecosystem-view |title=Post-COVID recovery and green transition: An ecosystem view |date=2024-05-08 |publisher=European Investment Bank |isbn=978-92-861-5617-5 |language=EN}}</ref><ref name="presscorner"/>
While 17% of the world’s top R&D investors are based in the European Union, they accounted for only 1% of acquisitions involving EU-based companies between 2013 and 2023.<ref>{{Cite web |title=The 2023 EU Industrial R&D Investment Scoreboard |url=https://iri.jrc.ec.europa.eu/scoreboard/2023-eu-industrial-rd-investment-scoreboard |access-date=2024-08-29 |website=IRI}}</ref><ref name=":211">{{Cite web |title=The scale-up gap: Financial market constraints holding back innovative firms in the European Union |url=https://www.eib.org/the-scale-up-gap |access-date=2024-07-30 |website=European Investment Bank |language=en}}</ref><gallery mode="packed"> File:Secop R&D Center in Gleisdorf Austria.jpg|Secop R&D Center in Gleisdorf Austria File:IBM Germany Research & Development Client Center 03.jpg|IBM Germany Research & Development </gallery>
===Worldwide=== In 2015, research and development constituted an average 2.2% of the global GDP according to the UNESCO Institute for Statistics.<ref>{{Cite web|url=https://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS|title=Research and development expenditure (% of GDP) {{!}} Data|website=data.worldbank.org|language=en-us|access-date=2017-12-12}}</ref>
By 2018, research and development constituted an average 1.79% of the global GDP according to the UNESCO Institute for Statistics. Countries agreed in 2015 to monitor their progress in raising research intensity (SDG 9.5.1), as well as researcher density (SDG 9.5.2), as part of their commitment to reaching the Sustainable Development Goals by 2030. However, this undertaking has not spurred an increase in reporting of data. On the contrary, a total of 99 countries reported data on domestic investment in research in 2015 but only 69 countries in 2018. Similarly, 59 countries recorded the number of researchers (in full-time equivalents) in 2018, down from 90 countries in 2015.<ref name="UNESCO Science Report 2021">{{cite book |editor1-last=Schneegans |editor1-first=S. |editor2-last=Straza |editor2-first=T. |editor3-last=Lewis |editor3-first=J. |title=UNESCO Science Report: the Race Against Time for Smarter Development. |date=11 June 2021 |publisher=UNESCO |location=Paris |isbn=978-92-3-100450-6 |url=https://unesdoc.unesco.org/ark:/48223/pf0000377433/PDF/377433eng.pdf.multi}}</ref>
{{Bar chart | title = Top countries by R&D spending<ref>{{Cite web|url=http://data.uis.unesco.org/Index.aspx?DataSetCode=SCN_DS&lang=en#|title=Science,technology and innovation|website=data.uis.unesco.org}}</ref> | label_type = Country | | data_type = R&D as percentage of GDP | data_max = 6 | label1 = Israel | data1 = 5.44 | color1 = #99ccff | label2 = Korea | data2 = 4.81 | color2 = #99ccff | label3 = Sweden | data3 = 3.53 | color3 = #99ccff | label4 = Belgium | data4 = 3.48 | color4 = #99ccff | label5 = United States | data5 = 3.45 | color5 = #99ccff | label6 = Japan | data6 = 3.26 | color6 = #99ccff | label7 = Austria | data7 = 3.20 | color7 = #99ccff | label8 = Switzerland | data8 = 3.15 | color8 = #99ccff | label9 = Germany | data9 = 3.14 | color9 = #99ccff | label10 = Denmark | data10 = 2.96 | color10 = #99ccff | label11 = Finland | data11 = 2.94 | color11 = #99ccff | label12 = Iceland | data12 = 2.47 | color12 = #99ccff | label13 = China | data13 = 2.40 | color13 = #99ccff | label14 = France | data14 = 2.35 | color14 = #99ccff | label15 = Netherlands | data15 = 2.29 | color15 = #99ccff | label16 = Norway | data16 = 2.28 | color16 = #99ccff | label17 = Slovenia | data17 = 2.15 | color17 = #99ccff | label18 = Czechia | data18 = 1.99 | color18 = #99ccff | label19 = Singapore | data19 = 1.89 | color19 = #99ccff | label20 = Australia | data20 = 1.83 | color20 = #99ccff }}
== Developing countries == While R&D spending is extremely beneficial for rich countries, it does not always have the same effect for poorer, developing countries. These countries may benefit from focusing on innovation and capital development as opposed to increases in R&D spending. It is found that returns to R&D follow an inverted U-shape, meaning returns rise for middle income countries but fall sharply for poor countries, falling very low and even sometimes negative. <ref>{{Cite journal |last=Goni |first=Edwin |last2=Maloney |first2=William F. |date=2014 |title=Why Don't Poor Countries Do R&D? |url=http://www.ssrn.com/abstract=2451260 |journal=SSRN Electronic Journal |language=en |doi=10.2139/ssrn.2451260 |issn=1556-5068}}</ref> Other studies find that some poor countries who spend less on R&D sometimes innovate more despite spending less on R&D. According to a sample in a 2013 study, a 25.2% increase in innovation is associated with Bangladesh, a poorer developing country, and a 41.5% likelihood of producing an innovation that is new to the market. The likelihood of producing a new to the market innovation for Malaysia, a more developed country, is 11.7% when R&D spending is present.<ref>{{Cite journal |last=Sardar |first=Rasher Rahman |date=2025 |title=Innovation activités in developing countries: the case of Bangladesh and Malaysia |url=https://d-nb.info/1387042165/34 |journal=The Journal of Technology Transfer}}</ref> This suggests that R&D investments may generate higher return on investments for new innovations in less developed countries compared to more developed countries.
==See also== * Basic research * Demonstration * Industrial laboratory * Innovation * List of business and finance abbreviations * List of companies by research and development spending * List of countries by research and development spending * Neglected tropical disease research and development * Prototype * Science of science policy * Science policy * Technological revolution * Technology life cycle
==References== {{reflist}}
==Sources== * {{Free-content attribution | title = UNESCO Science Report: the Race Against Time for Smarter Development. | author = Schneegans, S., T. Straza and J. Lewis (eds) | publisher = UNESCO | page numbers = | source = | documentURL = https://unesdoc.unesco.org/ark:/48223/pf0000377433/PDF/377433eng.pdf.multi | license statement URL = | license = C-BY-SA 3.0 IGO }}
==External links== * {{commons category-inline}} {{Industries}} {{Technology topics}} {{Authority control}}
Category:Research and development Category:Innovation Category:Product development Development