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Research and development worldwide - Statistics & Facts

Research and development (R&D) refers to the activities which governments and corporations undertake to create new products and services, and/or improve existing products and services. R&D includes both the work done by engineers to develop specific new products, as well as research done by industrial scientists that may result in future unspecified products. Aside from the cost of salaries, R&D requires significant investment in materials and equipment. This makes R&D a very expensive process, with total global R&D expenditures amounting to almost 2.2 trillion U.S. dollars in 2017 (once local currencies are adjusted for purchasing power parity). The United States and China are by far the two largest spenders, with each spending over half a trillion dollars in 2019. However, when expenditure is considered as a share of overall gross domestic product, smaller countries with tech-heavy economies such as South Korea and Israel invest proportionally more.

The two industries that spend the most on R&D globally are computing & electronics and healthcare, with each accounting for just over 20 percent of global R&D expenditure. The automotive, software and broader industrial sectors are also heavy investors. Although all of these sectors have a global presence, different regions outspend each other in different areas: while North America spends the most on R&D for software, computing, aerospace, and healthcare, Europe and Japan have a larger presence in the automotive, chemicals, and energy sectors. R&D-intensive industries also have differing levels of importance to different economies, with high-intensity R&D exports being more central to European and Asian economies than in other regions.

The largest source of R&D investment is the private sector, with the list of the largest corporate R&D spenders being comprised of global household names. Amazon topped this list in 2018, investing over 22 billion U.S. dollars in R&D. Some other companies to spend over 10 billion in that year included Google, Volkswagen, Samsung, Microsoft, and Apple. The presence of many major technology companies on this list is a result not only of their need to create new consumer products, but also because many of these companies are at the cutting edge of developing future, high-growth technologies like artificial intelligence. Corporate investment in healthcare R&D is also expected to remain high into the near future, despite this industry seeing a decrease in return on investment over recent years.

Of course, any market-based projection made prior to the global COVID-19 pandemic will need to be revised once economists have a better picture of the resulting economic damage. Despite this, there is reason to think that R&D investment may weather this crisis better than other many economic activities, at least in some sectors. Key R&D markets such as healthcare and computing will be relied upon to in global efforts to deal with the crisis: pharmaceutical R&D is necessary to develop a vaccine, while investment in computing and software may result from an extended need to reduce social contact. In addition, many who work in R&D report that historically their spending is not impacted by stock market changes - although whether this remains the case through a major economic downturn remains to be seen.

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Research and development (R&D) worldwide

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R&D in pharmaceuticals and healthcare

R&D in software and electronics

Energy industry R&D

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