Global research and development (R&D) spending is expected to increase by 3.6 percent in 2011 to $1.2 trillion, according to a report from Battelle Memorial Institute. It predicts that United States R&D will grow by only 2.4 percent over the final 2010 estimate, reaching $405.3 billion in 2011. With the 2011 inflation rate forecasted to remain a low 1.5 percent, this growth still leads to 0.86 percent, or $3.4 billion, growth in real terms.

A snapshot of the report reveals the following megatrends:

• Globalization increasingly is narrowing the R&D gap between countries.

• The U.S. still leads all countries by funding one-third of global R&D.

• China has overtaken Japan as the second highest funder of global R&D.

Industry R&D spending in the U.S. will reach $286.9 billion in 2011, a 3 percent increase of $8.4 billion over 2010 levels. At this level, industrial R&D activities will account for 70.8 percent of all R&D performed in the U.S.
While U.S. R&D still dominates worldwide spending, globalization is slowly altering the dominance that the U.S. has maintained for the past 40 years. The economies of China, Korea, India, Russia and Brazil and their investments in R&D are expanding at rates substantially higher than that of the U.S., Japan and Germany. As a result, emerging economies are starting to challenge the technological and discovery capabilities of the historic R&D leaders.

Technology R&D to Grow

The software industry’s spending on R&D slowed during the recent recession but is projected to see increases in 2010 and 2011. The increase is driven, in part, by the increased adoption of embedded control and interface software in a wide range of applications.

Sectors increasingly relying on more software to simulate, design, operate and control products, systems and manufacturing procedures include the telecom, automotive, energy, pharmaceutical, banking and finance, and aerospace and defense industries.

Current hardware technology development is responding to growth in a number of areas including cloud computing, Internet servers, mobile computing, wireless, integrated power supplies, satellite-based communications, flexible circuits and displays, multiple-core processors, carbon nanotube circuits, printed circuits and more.

Collaboration and commercialization continue to be the essentials for growth in energy R&D. Energy distribution, efficiency, and control technologies in the broad category of “smart grid” are areas of strong R&D interest to a number of key global multinational firms and emerging growth companies.

The need to reduce energy consumption is driving R&D in advanced materials across all industries, including automotive, aerospace, oil and gas exploration and consumer packaging. Nowhere is materials research more strong in 2010 and 2011 than in nanotechnology.

Hard copies of this report will be available Dec. 22 and can be obtained by contacting Sandy Walker at (614) 424-7610 or at walkers@battelle.org.