Falling Behind in Research and Development
Here are some notes from the New York Times article about how the US is falling behind in research and development, followed by a short comment of mine.
Economists have long recognized that markets provide insufficient incentive to invest in research. That is why non-competitive companies, such as the old AT&T and IBM, were the leaders in research.
Bernasek, Anna. 2006. “The State of Research Isn’t All That Grand.” New York Times (3 September).
“In their 2006 forecast, Battelle and R&D magazine said “major increases in the funding of offshore operations will have an impact on the United States R.& D. enterprise.” The magazine found that 40 percent of the American high-tech industry already had a research and development presence in Asia, and, of that share, about one-third plan to increase their presence. That comes as other nations are ramping up their research investments. In recent years, China and South Korea, in particular, have increased government spending on research by 10 percent or more annually, according to the American Association for the Advancement of Science.”
“According to a recent survey by the consulting firm Booz Allen Hamilton and Insead, the French business school, China and India will account for 31 percent of the world’s research and development personnel by the end of 2007, up from 19 percent in 2004.”
“But the United States falls down the list when it comes to more meaningful comparisons. According to the Organization for Economic Cooperation and Development, the nation ranks seventh in R.& D. spending as a share of the economy, trailing Sweden, Finland, Japan, Switzerland, Iceland and South Korea. In spending on basic research as a share of R.& D., the United States ranks 11th. And when measuring nondefense research as a share of the economy, it’s 22nd.”
Me: Keep in mind that a significant amount of US R&D is not what I consider to be useful research — just figuring out how to change packaging, work around other companies patents ….