Meanwhile, the technological focus of R&D has followed a similar arc, shifting from the creation of physical to digital products, to the more recent formation of new business models that combine the physical and digital worlds to create and capture new forms of value. With capital, intellectual property, and talent flowing across borders with limited constraints, the United States faces fundamental questions of great importance to the future of its innovation ecosystem: How can it best cultivate the potential of advanced technologies to spur competitiveness? Can the United States continue to lead given the research spend and talent within other nations? No one entity houses all the brightest people or best ideas – the answer lies with looking outside your traditional walls. Insights from our recent A dvanced T echnologies I nitiative: Manufacturing and Innovation study indicated that, when it comes to tangible factors such as R&D spend, the U nited S tates is a clear leader . We spend more on R&D in raw dollars than any other nation . 2 We account for about one-third of the globe’s R&D spending . In comparison, the next-largest share is China’s, at less than one-quarter of the global total. The other eight in the top 10 barely surpass the US share when all combined. This strong set of R&D capabilities reaches across many industries . In a recent global study 3 that assessed R&D leadership in 10 top sectors, the U nited S tates was ranked number one for seven of those 10 sectors. But we may not stay in the lead for long. Other countries are ramping up their spending. Some with far smaller R&D footprints—like Japan and South Korea—already outpace us in two measures of R&D intensity: spend as a percentage of GDP and researchers per million inhabitants. As the graphic below shows, from 2000 through 2013, South Korea, China, and Taiwan dramatically expanded their R&D intensity in both respects, while the United States made little change over the same period. And what about the US’s global lead in raw-dollar R&D spending? Experts predict China is on a pace to pass us by 2019.4 China already focuses more of its R&D on commercializing new technologies, while the US focuses a significant core on basic and applied research.5 The “secret sauce” of innovation R&D spend alone isn’t a defensible advantage for the US. Other countries can —and do—increase their investments. And someday in the not too distant future they may very well surpass us. Does that mean we’ll lose our leadership? No. The enduring strength of US innovation , or of any nation’s capacity to invent, is more complicated than the number of dollars spent on R&D alone. What matters is the innovation ecosystem –the complex collaboration between private business, government, academia, finance, independent research, and other functions to bring new products and services to market.
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- Winter '07