Monday, October 09, 2006

China's Spending For Research Outpaces the U.S. - WSJ.com

China's Spending For Research Outpaces the U.S. - WSJ.com

Do we care about R & D?


Mega mouse in front of my three wheeled bike -- on Chengdu's Computer Row.
Posted by at

1 comment:

Anonymous said...

full article

China's Spending
For Research
Outpaces the U.S.
By GAUTAM NAIK
September 29, 2006; Page A2

An unprecedented surge in research and development spending is helping China catch up with the two longstanding leaders in the field, the U.S. and Japan, a new study found.

R&D spending in China has been growing at an annual rate of about 17%, and is far higher than the 4% to 5% annual growth rates reported for the U.S., Japan and the European Union over the past dozen years. China's massive investments in education are also bearing fruit. In 2002, its industrial-research work force was 42% the size of the equivalent U.S. work force, up from 16% in 1991.

China is increasingly making its mark with scientific discoveries and patents held by its scientists. In 2003 China became only the third country, after the U.S. and Russia, to put a person into orbit on its own. Yesterday, Michael Griffin, administrator of the National Aeronautics and Space Administration, returned to the U.S. after a visit to China -- the first time a NASA administrator has visited that country -- to explore and expand space-program cooperation.

"China's significant investment in R&D is predicated on the assumption that they want to be a player and competitor both economically and militarily," said Jules Duga, senior analyst at Battelle Memorial Institute, a nonprofit trust in Columbus, Ohio, that runs labs for the government and industry.

The study, co-written by Mr. Duga, was conducted by Battelle and R&D Magazine and is being published today. The study included in its measure expenditures such as scientists' salaries and lab equipment in both the public and private sector, but excluded long-term capital expenditures such as buildings and major equipment.

China's technology-driven rise could heighten worries that the U.S. is ceding some of its competitive edge in science and technology to Asia's new power. America's share of total global R&D is estimated to slip slightly to 31.9% in 2007 from 32.7% last year, according to the study. Japan and Europe are projected to show similar declines, while China's share of global R&D is set to increase to 14.8% in 2007 from 12.7% in 2005.

But the U.S. remains an R&D powerhouse, investing $320 billion in such efforts last year, compared with $236 billion invested by the EU and $125 billion by Japan. Though China's R&D spending now makes up about 1.6% of its gross domestic product, up from about 1% five years ago -- it's still a far cry from the 2.6% of GDP that the U.S. invests, and the 3.2% of GDP that Japan invests.

In the last few years, the increase in U.S. R&D investment has been driven by military-related research. Roughly 60% of America's research and development originates from the private sector. In a ranking of the top five R&D-spending companies, four are American, including Pfizer Inc., Ford Motor Co., Microsoft Corp. and General Motors Corp. The other is Toyota Motor Corp. of Japan.

American firms also make the biggest biotechnology investments, according to the Battelle report. One spur: a continuing decline in the number of new drug approvals by large pharmaceutical companies.

Despite the shifting R&D landscape, "there's no need for the U.S. to panic," said Mr. Duga. Instead, he said, "the U.S. needs to be prepared for a change. We need to figure out how we can keep ourselves in a strong position" in crucial areas of science and technology. His prescription: Spend more on math and science education, and invest more in pure research, which U.S. industry increasingly has shunned.

Write to Gautam Naik at gautam.naik@wsj.com

October 09, 2006 12:01 PM

Post a Comment

Subscribe to: Post Comments (Atom)