In 2021, Research and Experimental Development (R&D) expenditures in the OECD area resumed their growth trajectory prior to the COVID-19 crisis. According to data published in the OECD Main Science and Technology Indicators (MSTI) on 29 September 2023, R&D expenditure in the OECD area grew in 2021 by 4.9% in inflation-adjusted terms, a very slight revision compared to the 4.7% growth estimates in the March 2023 edition. This confirms a return to pre-COVID crisis trends after it had slowed down to 2% growth in 2020.
After falling by 3% in real terms in 2021, government R&D budgets for the entire OECD area increased by 2% in 2022, less than the 3% growth estimated in March. Data on the orientation of government R&D budgets for the entire OECD area indicate that the increase of total GBARD in 2022 was principally explained by growth in undirected R&D funding (other than the general university funds). Budgets for R&D on defence fell in 2022, driven by R&D budget cuts in the United States. Fiscal packages introduced in 2021 and 2022 boosted support for Energy R&D programmes, which had been lagging behind for decades.
As of September 2023, data on R&D budgets for 2023 are only available for reporting for a small group of OECD countries. In 2023, R&D budgets increased in real terms in Korea (2%), the Netherlands (10%), Sweden (1.5%) and the United States (8%). Cuts in real terms were reported for Austria (-0.2%) and the Czech Republic (-8%). The OECD continues to work with countries to ensure more timely reporting of in-year R&D budgets to inform the international community.
R&D growth in the OECD area was pervasive but unevenly distributed across countries in 2021.
As reported in March 2023, pervasive growth in inflation-adjusted R&D expenditure in the OECD area in 2021 was led by intensified R&D growth in the United States at 5.6% and Korea at 7.1%, supported by a noteworthy recovery in countries like France, Germany and Japan, where R&D expenditure grew at close to 3% after negative growth in 2020. R&D expenditure in the EU27 area rose by 4.4% after a decline of 2.4% in 2020. Several OECD economies reported growth rates over 10% in 2021 and China’s reported R&D expenditure (see the briefing note for further details on coverage changes) grew by 10% in 2021. In purchasing power adjusted terms, China’s total R&D expenditure stood in 2021 at 83% of total R&D performed in the United States. While previous reporting errors for China’s GERD have been addressed since the latest edition, this comparative estimate is somewhat unreliable based on experience of recurrent major revisions to PPP conversion rates (see briefing note).
The business sector resumed in 2021 its role as main driver of R&D growth.
Since the 2009 global financial crisis and up until the COVID-19 crisis, businesses have seen their share of total expenditure on R&D performance in the OECD area increase to almost three quarters, leading R&D growth in the OECD area. After temporarily trailing other sectors in terms of R&D expenditure growth in 2020, growth in R&D expenditure in the business sector in 2021 was confirmed at 6.5%. R&D in the Higher Education sector increased by 1% while it did not change for Government sector institutions.
R&D intensity in the OECD area declined in 2021 as GDP outpaced growth in R&D expenditure.
In contrast to 2020, R&D growth in the OECD area in 2021 (4.9%) fell short of GDP growth (5.8%). As economic growth resumed in 2021, R&D intensity – a headline measure of domestic expenditure on R&D expressed as a percentage of GDP – can be meaningfully compared with pre-COVID-19 crisis levels. In the OECD area, R&D intensity stood in 2021 at 2.7%, while it was 2.6% in 2019. For the EU27 it remained at 2.1%. Israel and Korea continued to report the highest OECD levels of R&D intensity, at 5.6% and 4.9% of GDP, respectively.
The OECD Main Science and Technology Indicators (MSTI) are a statistical publication prepared by the Science and Technology Policy (STP) Division of the OECD Directorate for Science, Technology, and Innovation under the aegis of the OECD Working Party of National Experts on Science and Technology Indicators (NESTI), a subsidiary body of the OECD Committee for Scientific and Technological Policy. MSTI provides a set of indicators that reflect the level and the structure of the efforts undertaken by OECD member countries and selected non-member economies. Its contents draw principally on data on financial and human resources devoted to research and experimental development (R&D) as defined in the OECD Frascati Manual, complemented by additional indicators of outputs and potential outcomes of scientific and technological activities, namely patent data and international trade in R&D-intensive industries. In addition to these, MSTI comprises several economic and demographic series from other OECD sources which are used to calculate adjusted indicators which account for differences in the relative size of economies, purchasing power and the effect of inflation.
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 each year, in March and September. Based on data reporting patterns by countries to the OECD and review procedures, the March edition revises previous data and contains the most timely but provisional aggregate indicators. The indicators in the September edition typically draw on data confirmed by countries as final as well as more disaggregated indicators reviewed by the Secretariat over the year. The September edition is also characterised by more complete reporting of indicators on Government Budgets for R&D by OECD member countries.
MSTI coverage is defined by the reporting by countries to OECD of R&D data that are consistent with the guidance in the OECD Frascati Manual. The statistics compiled by OECD are based on data provided by responsible national bodies to the OECD annual call for R&D data from OECD member countries and selected non-member economies. In its latest available edition, MSTI reports indicators on all 38 OECD Member countries with most recent data typically reaching up to 2021 (2022 in the case of R&D budgets).
Indicators are also compiled for the OECD aggregate zone, the European Union (EU-27 zone), as well as seven non-member economies: Argentina, People’s Republic of China, Romania, Russian Federation, Singapore, South Africa and Chinese Taipei.
Costa Rica, which became the 38th member of the OECD in May 2021, has been included in MSTI for the first time in the September 2023 edition. Costa Rica is covered for all indicators except those on Government R&D budgets.
As reported in previous editions, in alignment with the OECD Council decision in response to Russia's large-scale aggression against Ukraine, the OECD suspended its solicitation of official statistics on R&D from Russian authorities, leading to the absence of more recent R&D statistics for this country in the OECD database.
The briefing note (see the box on "data updates") provides more information about the coverage changes in the latest edition of MSTI.
The MSTI indicators can be retrieved from and 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.