China Becomes No.2 in R&D Investments Worldwide - OECD Report

Based on recent trends, China will spend over $136 billion on R&D in 2006, growing at over 20% annually, surpassing Japan’s forecast of $130 billion, and only behind the United States predicted $330 billion, according to OECD projections. The EU-15, which includes France, Germany and the UK, is predicted to spend over $230 billion in 2006. 

China’s spending on R&D as a percentage of GDP, known as R&D intensity, has more than doubled from 0.6% of GDP in 1995 to just over 1.2% in 2004. In current prices, this represents an increase from just over $7 billion in 1995 to $94 billion in 2004. And it is growing even faster than the economy which is growing by between 9 and 10% a year.  

“The rapid rise of China in both money spent and researchers employed is stunning,” said Dirk Pilat, Head of the OECD’s Science and Technology Policy division. “To keep up, OECD countries need to make their research and innovation systems more efficient and find new ways to stimulate innovation in today’s increasingly competitive global economy.”

OECD's report "Science, Technology and Industry Outlook 2006" notes two clear trends in non-OECD countries in strengthening R&D and innovation activities and policies: 

  • rapid absolute growth, from low starting points, in R&D and patenting, 
  • significantly growing shares in global R&D and patenting.

Other Highlights from the OECD Report: 

  • In China, the number of researchers increased by 77% between 1995 and 2004. China now ranks second worldwide with 926 000 researchers, just behind the United States (more than 1.3 million), and Russia ranks fourth. 
  • Singapore employs more researchers per thousand of total employment than the OECD average.
  • The total number of globally important patents originating from non-OECD economies is small compared to the OECD total, but the numbers have grown rapidly in recent years. In 1991, Brazil, China, India and South Africa accounted for 0.15% of the total share; by 2002 this had increased to 0.58% of the total.

 

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