September 2021 edition
Next update due: March 2022
Short address for this page: http://oe.cd/msti
R&D before the COVID-19 crisis: Final estimates of R&D performance in 2019
The latest official statistics for research and development (R&D) indicate that, prior to the onset of the COVID-19 pandemic, R&D expenditure in the OECD area grew in real terms by 4.1% in 2019. According to the latest data published on 15 September 2021 in the OECD Main Science and Technology Indicators (MSTI) database, OECD R&D intensity (domestic expenditure on R&D expressed as a percentage of gross domestic product, GDP) rose from 2.4% in 2018 to nearly 2.5% in 2019. As observed in 2018 and 2017, this increase was driven by faster real growth of R&D expenditure (+4.1%) compared to GDP (+1.6%). After stagnating between 2013 and 2016, R&D intensity in the OECD area has been steadily rising. The OECD area had not seen comparable growth over a three-year period since the mid-1980s.
Growth in R&D intensity was widespread across the majority of OECD countries in 2019, with the United States, Germany and Korea accounting for much of the increase. Israel and Korea displayed the highest levels of R&D intensity among OECD countries, at 4.9% and 4.6% of GDP, respectively. In the United States, R&D intensity surpassed the 3% milestone for the first time, while the R&D intensity of China grew from 2.1% to 2.2%. In contrast, the EU27 area experienced a more modest increase to 2.1%.
R&D intensity in OECD countries and other economies
Total growth in real expenditure on R&D in the OECD area in 2019 was principally explained by growth in R&D performed by businesses. The Business Enterprise sector, which accounts for 71% of all R&D performance in the OECD area, saw its R&D expenditure increase by 4.6% in 2019. R&D in the Higher Education (HE) sector grew by 2.3%, while R&D expenditures in the Government sector rose by 3.4%, confirming a partial reversal of previous trends that saw government institutions decline in relative importance as R&D performers.
Gross domestic expenditures on R&D by performing sector
Index 2007 = 100 (Constant USD PPPs)
In 2019, the United States, Japan, Germany, Korea and France were the largest R&D performers in the OECD area. In comparative purchasing power terms, China is the world's second-largest R&D player, with total R&D expenditure reaching 80% of that of the United States in 2019, up from 26% in 2005.
Gross domestic expenditures on R&D, 1998-2019
The COVID-19 Crisis: What happened to R&D in 2020?
As R&D funders and performers across most economies began closing their accounts for 2020 in the initial months of 2021, official surveys on R&D performance in 2020 will have to wait for this process to finish before going in the field to collect data. This implies that statistical results from most countries will only be available from the last quarter of 2021 onwards. While these data collection efforts are ongoing, the OECD has developed and examined different leading indicators to provide a more timely snapshot of the state of R&D investments, with the aim to assist governments and data users in general.
In 2020, the OECD began monitoring the published quarterly reports and accounts for a panel of large R&D business investors, including their publicly declared R&D expenditures. This monitoring exercise, which is external and complementary to the publication of official statistics in MSTI, entails the manual inspection of quarterly reports published by selected companies identified as large R&D investors. The analysis of changes in R&D investment over time suggests that business R&D investment continued to grow in 2020, although at a significantly lower rate than in 2019 and with striking differences across industries. Most of the major R&D investors in the information and communications technology (ICT) and the life sciences industries exhibited robust growth, while firms in other industries, especially in transport equipment, tended to see R&D investment fall. Overall, if subsequently confirmed by official data, this would have been the first global economic crisis in OECD history during which business R&D expenditures did not decline in aggregate terms.
Government R&D budget indicators for the OECD area present the amounts that governments allocate for R&D, rather than actual expenditure reported by R&D performers. In addition to shedding light on governmental intentions, these figures provide early insights into R&D performance in sectors that are highly reliant on government support, such as higher education and government research institutions. The latest indicators show that OECD governments R&D budgets increased in 2020 by 5.1% in real terms. This figure represents a marked increase compared to 2019, when R&D budgets increased by 3.2% on the previous year, and 2018 (5.6%). This appears to reflect a combination of planned boost to R&D funding plans before the pandemic and additional emergency support for health-related R&D to develop vaccines and treatments in response to the COVID-19 pandemic.
R&D budget trends
Index 2007 = 100 (Constant USD PPPs)
The MSTI database provides a selected set of indicators in the field of science and technology that principally reflect the R&D performance over time of OECD member countries and seven other economies: Argentina, China, Romania, Russian Federation, Singapore, South Africa and Chinese Taipei. These data include final or provisional results as well as provisional estimates provided by national statistical organisations. The indicators cover the resources devoted to research and development, patent families, and international trade in R&D-intensive industries.
Indicators on R&D expenditures, budgets, and personnel are derived from the OECD’s Research and Development Statistics database (Research and Development Statistics Database (RDS), which is based on the data reported to OECD and Eurostat in the framework of the joint OECD/Eurostat international data collection on resources devoted to R&D.
The sources for the other indicators include the OECD databases on Patents and Bilateral Trade in Goods by Industry and End-use category (BTDIxE).
MSTI is published twice yearly, in March and September, with the former representing the first available R&D performance figures with a global scope. The September publication consolidates the March publication with final data provided by countries.
Data for Costa Rica, which became the 38th member of the OECD in May 2021, have not yet been included in MSTI. The OECD is currently working with Costa Rica’s authorities to collect and report internationally comparable R&D data for publication the OECD R&D statistics and in future editions of MSTI. In this latest edition, Costa Rica does not appear in the list of OECD Members and is not included (except for patent indicators) in the OECD zone aggregates.
The MSTI indicators can be best visualised using the OECD STI Scoreboard platform, where they can be analysed alongside different STI indicators.
The electronic edition is available via the OECD’s data dissemination service, “OECD.stat”. From there, the MSTI Excel file can be downloaded by clicking “export” and then “related files”. The MSTI database is also available online through OECDiLibrary.
The OECD R&D and GBARD Sources and Methods Database contains metadata relevant to the interpretation of R&D series included in MSTI and RDS.