As described in my Feb. 17, 2006 post, the World in 2020, a recent report of the National Intelligence Council suggested that only 14 years from now, the engine of the world economy might have shifted from the US to China and other countries in Asia, and that leadership in science and technology might have moved from the US to the same Asian countries. In a May 16, 2006 post entitled Where is the engine of the world economy?, I called attention to a recent LA Times article that seems to show that China is moving along a path that would enable it to achieve the economic status predicted by the NIC. The recently released 2006 Science and Education Indicators from the National Science Board would seem to indicate that China is also on track to realizing the NIC predictions in the science and technology area.
According to this report, China raised its annual spending on R&D at an average rate of 17% per year during the period from 1991 to 2003. The US , Japan, and European Union saw average annual increases of 4%-5% during that period. This 12 year average underestimates the dynamic growth in China’s expenditures, however. The report notes “for the past 5 years, China's R&D expenditures have registered 24% average annual increases.” The net result of these years of high level increases is that China has moved into third place in R&D expenditures internationally, having displaced Germany from that slot. The US and Japan remain (for the moment) numbers one and two. However, China had only 17% of Japan’s R&D expenditures in 1991, but 74% in 2003, so the number two position is not necessarily stable. The US remains the R&D leader by a large margin, but China’s expenditures were about 30% of ours in 2003.
It is worth noting that a large component of R&D spending worldwide is industry. The report notes: “Governments around the world are increasing their R&D funding in support of the development of high-technology industries. However, industry R&D support has often expanded more rapidly, leading to a declining share of government support in total R&D in many countries. The relative decline in the United States had been very steep—the federal government share fell from 48% in 1990 to a low of 26% in 2001. Changes after September 11, 2001, largely in defense and national security R&D, brought it back up to 31% in 2004. In the EU, the government share diminished from 41% in 1990 to 34% in 2001 (more current data are unavailable). Germany's 32% rate in 2003 was close to its 1990 level of 34%, after rising as high as 38%. Japan's rate, by far the lowest among OECD countries, has fluctuated between 18% and 23% over the period.” No comparable numbers seem to exist for China, where government spending is much more ubiquitous. However, these numbers would seem to indicate that R&D expenditures by the US government are not that different from those of the Chinese government.
The report also notes that academic research - where most basic research is carried out - is of lesser importance in Asian countries, but growing quite rapidly: “academic R&D has seen robust growth in many countries as governments try to stimulate basic research capability and to connect universities with industry for the efficient exploitation of research results. The United States and the EU-25 (including 10 new member countries) have been spending similar amounts for academic R&D, $41 to $44 billion in 2003, about double their expenditures in 1990. OECD nations other than the United States spent $74 billion, an increase of 120% over 1990. However, China has experienced the most rapid growth in its spending for academic R&D, from $1.1 billion in 1991 to $7.3 billion in 2002, with double-digit growth rates since 1999. Nevertheless, the academic sector, where basic research is conducted in many countries, plays a relatively small role (about 10%) in China's R&D system. This is also the case in some other Asian countries, where R&D tends to focus more on applied research and especially on development. In other major OECD nations, the share of academic R&D was at least 14%.”
These numbers do not show that China will catch up with US in R&D expenditures, in quality of R&D, or in contributions to fundamental understanding of nature. However, they do indicate that China is moving rapidly along a path that does not preclude that eventuality.
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