The US spends big on R&D, but other countries catching up

by | Apr 10, 2013

The bread and butter of the Defence Advanced Research Projects Agency in the US will sound like something close to science fiction for most of us. The government agency played a key role in the development of the internet and stealth aircraft that can escape detection by radar. Current DARPA projects include microbes that can detect and repair damaged sections of material and robots that can change shape and squeeze their way through small holes and completely reconfigure themselves once they come out of the other side.

Funding for public research facilities, such as DARPA, came under threat during the recession, according to a report in the Economist. However, investment in research and development in other nations is rapidly growing, with China’s outlay in R&D spend coming in at 20% a year.

Tax breaks for innovation in America are slim. Work in scientific journals and venture capitalist investments are lagging a little behind compared with other countries. Nearly 42% of Americans have a university degree. This puts it in tenth spot globally, with South Korea taking the lead.

Other countries are catching up to the US not because it is carrying out less research, but they are pouring more money into innovation. However, some states in the US are quite open to new ideas, with some already drawing up the regulatory framework for driverless cars, another DARPA project. On an international level, American is the fourth most nurturing spot for innovation. Twenty seven out of 30 universities cited in scientific papers come from the US.

Funding for public research agencies in American unfortunately falls under discretionary spending – the first thing to get the chop when times are tough. Innovations springing to life from government agencies tend to be of higher quality than those backed by private corporations. Companies tend to focus more on the development part of R and D, rather than research.

Cutting off funds to innovation may provide short term savings, but this will be counterproductive for the government in the long term. Research and development in the oil and gas industries is going a fair way to transform the country’s energy outlook and is helping to boost the economy.

The Economist article is well worth a read.

Jeffrey Tobias

About Jeffrey Tobias

Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well-known startups.

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Managing Director, The Strategy Group

Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well known startups. Jeffrey’s corporate background includes leading global innovation strategy at Cisco, working with large corporates such as Adobe, Westpac, Telstra, Woolworths, and Perpetual.

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