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Annual R&D Report Reveals Growing Equalization
R&D is becoming a truly global enterprise with all sectors moving within
the not-too-distant future to a near-equal distribution of effort, funds and
activity - as opposed to the domination the U.S. has held onto for the past 50
years.
The trend is revealed in the annual Battelle R&D Magazine report released.
The report goes beyond a simple analysis of R&D expenditures and investments,
peering into the underlying structure of the global R&D enterprise.
The U.S. will continue to dominate for up to the next 10 years or so, but
after that decade activity is likely to be split into thirds with North America,
the European Union (EU) and Asia - dominated by China and India - holding approximately
equal shares.
In addition, outsourcing and off-shoring of R&D is becoming increasingly
prevalent among all players in the R&D enterprise, with the U.S. leading
the trend. Close on the heels though are the EU and Asia, increasingly offshoring
R&D to the U.S. in order to be in a better position to enhance their market
shares. At the same time, the U.S. enterprise is also benefiting from the continued
in-sourcing of R&D.
“
Given the history of the past 20 years, there is every reason to believe that
the globalization of R&D will continue to grow, and that the competition
for research funds will become more intense,” said Jules Duga, a senior
researcher at Battelle and world-renowned expert on R&D trends.
The long history of R&D interactions among the U.S., Western Europe and Japan
has been growing to include the rest of Asia, which is not a surprising trend
to those who closely track the R&D enterprise. But, Duga said, “This
growth has been unlike any other in recent years, and it foretells the approach
to a new equilibrium in global scientific and technological practice.”
The report delves into the structural upheavals in the R&D enterprise and
the complex interplay between funders and performers. This becomes vital information
for companies who are aiming to understand trends in order to make the best
investments and to capitalize on the global economy.
“
It is the internal structure of the R&D enterprise, and the roles and interplay
among sectors, that have a direct bearing on the manner in which the investment
in R&D will have the desired societal benefit outcomes of economic security,
improved health care, and the like,” Duga said.
Much of the underlying data analyzed for the report comes from participants
in the Organization for Economic Cooperation and Development (OECD) with selected
information augmented with data from the European Commission.
The practice of offshoring has been driven by a number of different factors,
including:
• As markets expand in response to demands so has the desirability of having
on-site or near-site technological support for manufacturing and distribution
centers.
• Products developed for specific environments may need to be modified
in content, design, function and process, so as to accommodate local cultures,
customs, regulations,
raw materials and manufacturing, and/or distribution support structures.
• Local conditions related to manufacturing and other operating licenses
may contain local content clauses which extend to the intellectual input to the
manufacturing
or distribution process, i.e., a requirement that includes the establishment
of local technical support or research facilities.
• In some locales, there may be significant cost savings that accrue from
using resident talent, even if the associated technical and research support
is not
directed toward products for local consumption.
Where are the government priorities?
• Throughout the countries covered by the OECD statistics (which exclude
China and India) almost all governments provide support to higher education,
basic
research, industrial technology, human health and agriculture. However, the
priorities shift from one country to another.
•
Major thrust areas were rated by 27 individual governments with the UK, US, and
France indicating defense as the highest priority. Surprisingly, the field of
energy research received only one reference as a priority item (from Poland),
and in fact was found to be at the bottom of the list of five priority R&D
concentrations for the 27 countries.
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