The U.S. will continue to dominate for up to the next 10 years or so, but after that decade activity is likely to be split into thirds with North America, the European Union (EU) and Asia - dominated by China and India - holding approximately equal shares.
In addition, outsourcing and off-shoring of R&D is becoming increasingly prevalent among all players in the R&D enterprise, with the U.S. leading the trend. Close on the heels though are the EU and Asia, increasingly off- shoring R&D to the U.S. in order to be in a better position to enhance their market shares. At the same time, the U.S. enterprise is also benefiting from the continued in-sourcing of R&D.
"Given the history of the past 20 years, there is every reason to believe that the globalization of R&D will continue to grow, and that the competition for research funds will become more intense," said Jules Duga, a senior researcher at Battelle and world-renowned expert on R&D trends.
The long history of R&D interactions among the U.S., Western Europe and Japan has been growing to include the rest of Asia, which is not a surprising trend to those who closely track the R&D enterprise. But, Duga said, "This growth has been unlike any other in recent years, and it foretells the approach to a new equilibrium in global scientific and technological practice."
The report delves into the structural upheavals in the R&D enterprise and the complex interplay between funders and performers. This becomes vital information for companies who are aiming to understand trends in order to make the best investments and to capitalize on the global economy.
"It is the internal structure of the R&D enterprise, and the roles and interplay among sectors, that have a direct bearing on the manner in which the investment in R&D will have the desired societal benefit outcomes of economic security, improved health care, and the like," Duga said.
Much of the underlying data analyzed for the report comes from participants in the Organization for Economic Cooperation and Development (OECD) with selected information augmented with data from The European Commission.
The practice of offshoring has been driven by a number of different factors, including:
- As markets expand in response to demands so has the desirability of having on-site or near-site technological support for manufacturing and distribution centers.
- Products developed for specific environments may need to be modified in content, design, function and process, so as to accommodate local cultures, customs, regulations, raw materials and manufacturing, and/or distribution support structures.
- Local conditions related to manufacturing and other operating licenses may contain local content clauses which extend to the intellectual input to the manufacturing or distribution process, i.e., a requirement that includes the establishment of local technical support or research facilities.
- In some locales, there may be significant cost savings that accrue from using resident talent, even if the associated technical and research support is not directed toward products for local consumption.
Where are the government priorities?
- Throughout the countries covered by the OECD statistics (which exclude China and India) almost all governments provide support to higher education, basic research, industrial technology, human health and agriculture. However, the priorities shift from one country to another.
- Major thrust areas were rated by 27 individual governments with the UK, US, and France indicating defense as the highest priority. Surprisingly, the field of energy research received only one reference as a priority item (from Poland), and in fact was found to be at the bottom of the list of five priority R&D concentrations for the 27 countries.
