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US needs more R&D spending, technical graduates: government report

US needs more R&D spending, technical graduates: government report

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National Science Board reports that the US graduates only 20% as many science and engineering majors as leading Asian nations. Should we be concerned?

The United States still leads the world in research and development spending, but may not hold the lead for long. Between 1999 and 2009 (the latest year complete data is available), the US share of global R&D expenditures decreased from 38% to 31%. The share for Asia, especially China, increased from 24% to 35%.

That's the word from the National Science Board’s latest report on technology competitiveness, Science and Engineering Indicators 2012. As the report notes, R&D spending numbers provide a window into a country's propensity to innovation. "R&D expenditures can be viewed as long-term investments in innovation. The R&D/GDP ratio is a convenient indicator of how much of a nation’s economic activity is devoted to innovation through R&D."  At least 3% in R&D spending relative to gross domestic product is considered healthy, but few nations actually have levels this high, the report adds.

The report states that the United States remained by far the single-largest R&D performing country, with an R&D expenditure of $400 billion in 2009, the most recent year complete data is available. For the first time, the Asian region’s total of $399 billion matched the U.S. total in 2009.

In Asia, China has become the dominant R&D locale. China’s 2008–09 R&D growth increased by a record 28% — well above its 1997–2007 trendline growth of 22% — and propelled it past Japan into second place, the report adds. 2010 data released by China’s National Bureau of Statistics show a further 22% increase. R&D spending rates across the US and European Union stagnated during the recent recession, the report adds.

More innovations are coming out of Asia as well, the study states. In 1992, about 54% of patents granted by the US Patent and Trademark Office -- which grants patents on a global basis -- were granted to US-based inventors; by 2010, this percentage had fallen to 49%, "a possible indication of growing inventive activity elsewhere," the report states. Among patents granted to non-U.S. inventors, the shares of EU- and Japan-based individuals have eroded by 9 to 11percentage points since 1992. Asia-8’s share rose by 15
points over the period, mostly because of activity by South Korea and Taiwan."

The report expressed concern about the diminishing number of students in the United States pursuing science and engineering degrees, compared to that of other nations.

Currently, about 4% of the world's engineering degrees went to US students, versus 34% to students in China, 5% to Japanese graduates, and 17% to the remaining Asian nations. Numerically, China graduated about 1 million scientists and engineers in 2008. For South Korea, Taiwan and Japan, the combined total was 330,000. In contrast, the US graduated 248,000 scientists and engineers during the same year..

The NSB report's authors expressed alarm over the low rate of US students in scientific or engineering programs:

"Fragmentary data indicate rapid growth, concentrated in developing countries, in the number of individuals who pursue education beyond the secondary level. Their number of degrees, especially degrees in the natural sciences and engineering, has diminished the advantage that mature countries had in advanced education. The low U.S. share of global engineering degrees in recent years is striking; well above half of all such degrees are awarded in Asia."

Likewise, actual employment within the US high-tech manufacturing sector has been declining steadily, the report observes. Employment within the five U.S. high-technology manufacturing sectors -- communications equipment and semiconductors, pharmaceuticals, scientific instruments, aerospace, and computers and office machinery -- peaked back in 2000, and declined by 28% since then. However, the report adds, while "the value of output generated by these industries contracted in 2001 and again slowed in 2007–08, over the decade, output per 1,000 employees doubled."

So the report shows that while US R&D spending and activity is slipping, the US graduates only 20% as many science and engineering majors as leading Asian nations. Should we be concerned?

(Photo: US Department of Commerce.)

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Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure