OECD warns governments must step up R&D spend

A few powerful multinationals are performing close to 70 per cent of global private sector research and development, while public R&D budgets have fallen to their lowest level in years, according to the OECD’s 2015 Science, Technology and Industry Scoreboard.

The scoreboard looked at budgets of the top 2,000 R&D spenders worldwide and their 500,000 affiliates, finding 70 per cent of global R&D is performed by just 250 companies.

The same 250 dominate more than 70 per cent of patents, 80 per cent of ICT-related patents, and 44 per cent of trademark filings.

Meanwhile, government R&D budgets have declined or flattened out in the last three years.  

With big businesses focusing on improving existing technology, rather than breaking ground in new areas of science, the report calls on governments to keep up investing in basic research.

“Public funding has underpinned many of the technologies driving growth today, from the digital economy to genomics. We must continue to lay the technological foundations for new inventions and solutions to global challenges like climate change and ageing and must not let investment in long-term research wane,” said Angel Gurría, OECD secretary-general.

The report also finds that four countries, the US, the UK, Germany and China, accounted for 50 - 70 per cent of highly-cited publications across all scientific disciplines between 2003 and 2012.

China, South Korea continue surge

The eye-catching exception to flat government R&D spending is South Korea, where public support for R&D has quadrupled in real terms since 2000.

The country is dominant in nearly a dozen "disruptive technologies", including data transmission and man-machine interface technology, the technology underpinning the Internet of Things. For advanced materials and nanotechnologies like graphene, metamaterials, renewable energy-enabling materials and wearable technologies, Korea holds roughly one out of every five patents in the world.

Meanwhile China continues to ramp up its spending on R&D, with the world’s second biggest budget.

Its average number of doctorate graduates in the natural sciences and engineering is now more than the US, the country with the world’s biggest R&D budget.

However, the OECD suggests that rather than investing in pure research, most of China’s spending is dedicated to building labs and equipment. The investment in basic research is only 4 per cent of the total budget, compared to the 17 per cent average in most OECD economies.