COLUMBUS, OH--(Marketwire - December 22, 2009) - Global research and development (R&D) spending
is expected to increase by 4.0 percent in 2010 to $1,156 billion, according
to the closely watched Battelle-R&D Magazine 2010 Global R&D Funding
Forecast released today.
The increase in spending mostly will be fueled by continued spending by
China and India, two countries that will drive a 7.5 percent increase in
Asian R&D. Meanwhile, United States R&D spending is expected to increase
3.3 percent to $401.9 billion. Europe is predicted to lag behind, by
increasing spending by only 0.5 percent, to $268.5 billion in 2010.
The impact of U.S. stimulus funding on total R&D in 2009 and 2010 cannot be
underestimated; without it, total U.S. R&D would have dropped below 2008
levels. Worldwide economic stimulus funding reached $1.92 trillion last
year, with about 38 percent of that occurring in Asian countries. While
having significantly positive short-term effects, the economic stimulus
packages dramatically increased the debt loads of the countries
implementing them and could take away from comparable R&D investments of
the future, the forecast cautioned.
U.S. Industrial R&D funding (including funds to academia and non-profit
institutions) will increase 2.85 percent over 2009 levels of $253.1
billion, to reach $260.3 billion in 2010. The sector comprises 64.8 percent
of all U.S. R&D funding. Overall, industrial R&D performance will increase
2.80 percent to $283.0 billion in 2010, up from $275.3 billion in 2009, but
still not reaching the $289.1 billion of R&D performed in 2008.
"Industrial R&D took a real hit in 2009 in both funding and performance,"
said Marty Grueber, Battelle Research Leader and co-author of the report.
"And while it's forecast to rebound in 2010, it still won't reach 2008
levels."
To understand the health and future prospects for U.S. industrial R&D, two
issues will be important to monitor in 2010 regarding industrial R&D
performance. First, will significant industry segments such as
electronics/computer hardware and biopharmaceuticals, which both saw
declines in 2009, quickly return to a more robust R&D portfolio?
Second, as R&D budgets tighten, there tends to be a further shift of
resources toward shorter-term, nearer-benefit development efforts at the
expense of research with longer time horizons that seek transformational
innovations and technologies. As the ability to expand R&D budgets
returns, will these resources be used to re-engage with existing research
areas?
Federally funded U.S. R&D is estimated to reach $114.1 billion in 2010, a
4.2 percent increase from 2009's $109.5 billion. Federally funded R&D as a
share of total U.S. R&D has steadily been dropping over the past 30 years,
from as high as 45 percent in the 1980s to this year's 26 percent.
The American Recovery and Reinvestment Act (ARRA) of 2009 added funds to
both the U.S. Gross Domestic Product (GDP) and overall R&D investments.
However, of the $18.1 billion that was dedicated to R&D investments, less
than 20 percent actually will be spent in 2009, with the remaining funds
spent in 2010 and 2011.
Other U.S. funding for R&D, including U.S. academia, non-profits and other
government-affiliated entities, comprise the 7 percent of R&D funding that
does not come from industrial and federal sources. Academic funding of R&D
is expected to increase just over 5 percent, from $11.1 billion in 2009 to
$11.7 billion in 2010. Meanwhile, non-profit organizations are expected to
fund nearly $12.6 billion, a growth rate of 2.84 percent. Finally, in the
"Other Government" category, typically state and local entities, R&D
funding is expected to decline by 1.35 percent to $3.28 billion.
Global Trend: The 2010 Forecast notes a growing trend in which both the
Americas (U.S., Canada, Mexico, Brazil, and Argentina) and Europe are
falling behind the spending levels seen in some Asian countries. Even
Japan, the second largest R&D spender in the world, is falling behind the
level of spending by China and India.
The global recession of 2008-09 has accelerated this trend, as American and
EC economies are not expected to return to their 2008 level of spending
increases for several years, let alone begin to challenge the current level
of spending increases by China and India.
"Even while China and India saw dampening impacts from the global
recession, at no time did their growth rates actually go negative. The
pace of their R&D growth just slowed, but it will heat right back up as we
head into 2010," co-author Grueber said. "The research engines in China
and India are large and getting larger and are driven by a number of
factors beyond traditional economic drivers."
The Forecast includes survey results from a broad-based pool of R&D
technology leaders. Energy, climate change, and healthcare are expected to
be the top technology drivers of the future, with the specific trends noted
below in key areas:
-- Energy/Environmental: Significant investments in R&D put the U.S. in
the lead on technologies involving carbon sequestration, smart grid, and
clean coal/zero emission technologies -- positions that are expected to
hold during the next five years.
-- Health and Biosciences: This area continues to be a high priority
for current U.S. leadership in almost all categories, including
targeted/nanotech drug delivery, medical biotechnology, and automated
diagnostics/surgical methods. One area worth watching because of U.S.
policy changes is stem cell development and related technologies.
-- Defense and Security: The U.S. is expected to continue leadership
positions over the next five years in Autonomous Unmanned Vehicles such as
Unmanned Aerial Vehicles (UAVs) and Unmanned Underwater Vehicles (UUVs),
stealth technologies, and chem/bio sensors.
The full report is available online at:
http://www.rdmag.com/tags/publications/global-r-and-d-funding-forecast.
The link also can be accessed via Battelle's Web page at
http://www.battelle.org/aboutus/rd/2010.aspx. Hard copies of the report
will be available Jan. 4 and can be obtained by contacting Jean Hayward at
(614) 424-7039 or at
haywardj@battelle.org.
Sources: The 2010 Battelle-R&D Magazine Forecast is build upon a data
foundation detailed in the National Science Foundation's (NSF) National
Patterns of R&D Resources. It also draws upon a number of additional
resources including detailed surveys of R&D performers; R&D budget
information compiled by the White House Office of Science and Technology
Policy (OSTP), and the American Association for the Advancement of Science
(AAAS); information on ARRA budgets and awards from Recover.gov and related
agency Web sites; secondary data from a variety of sources; and corporate
financial reporting to the U.S. Securities and Exchange Commission.
Ultimately, estimation and interpretation of recent data are required, due
to various collection time lags and non-disclosed data, to develop the
final 2010 forecast.
Contact Information: Media contacts:
Katy Delaney:
(614) 424-7208
T.R. Massey:
(614) 424-5544