In 2021, Research and Experimental Development (R&D) expenditures in the OECD area resumed their growth trajectory prior to the COVID-19 crisis. According to the latest data published in the OECD Main Science and Technology Indicators (MSTI) on 31 March 2023, drawing on the OECD R&D statistics database compiled with contributions from OECD members and other selected economies, R&D expenditure in the OECD area grew in 2021 by 4.7% in inflation adjusted terms, marking a return to pre-COVID crisis trends after it had slowed down to 2% growth in 2020.
R&D in the business sector resumed in 2021 its role as main driver of R&D growth, while R&D in government and higher education institutions came to a virtual standstill.
Since the 2009 global financial crisis and up until the COVID-19 crisis, businesses have seen their share of total expenditure on R&D performance in the OECD area increase to well over three quarters and have been leading OECD R&D growth. After trailing other sectors in terms of R&D expenditure growth in 2020, R&D expenditures in the business sector grew by 6.3% while R&D in the Higher Education and Government sector barely increased at 0.4% and 0.5% respectively.
As more comprehensive data have been reported by OECD countries over the past year, figures previously published in MSTI in March and September 2022 have been revised in the March 2023 editions. R&D growth in the OECD area for 2020 has been revised up from 1.5% in March 2022 to 2% one year later, principally driven by upward revisions for the United States and the United Kingdom (see the briefing note for further details on the main coverage changes and major revisions to R&D data in the MSTI March 2023 edition).
R&D growth in the OECD area was pervasive but unevenly distributed across countries in 2021. Differences in the level of R&D expenditures amplified.
Pervasive growth in inflation-adjusted R&D expenditure in the OECD area in 2021 was led by intensified R&D growth in the United States at 5.6% and Korea at 7.1%, supported by a noteworthy recovery in countries like France, Germany and Japan, where R&D expenditure grew at close to 3% after negative growth in 2020. Several OECD economies reported growth rates over 10% in 2021. R&D expenditure in the EU27 area rose by 3.6 % after a decline of 2.3% in 2020. Data published by China’s authorities implies that in purchasing power adjusted terms, China’s R&D would be close to 80% of total R&D performed in the United States. These statistics have been temporarily supressed as they are currently under review by OECD (see briefing note).
Compared with 2020, R&D intensity in the OECD area declined in 2021 because GDP outpaced growth in R&D expenditure, but it still stands above pre-crisis levels.
R&D growth in the OECD area in 2021 (4.7%) fell short of GDP growth (5.6%) after the opposite held in 2020. As economic growth resumed in 2021, R&D intensity – a headline measure of domestic expenditure on R&D expressed as a percentage of GDP – can be meaningfully compared with pre-crisis levels. In the OECD area, R&D intensity stood in 2021 at 2.7%, higher than 2.56% in 2019, while for the EU27 it stood at 2.15% compared with 2.1%. Across the OECD, Israel and Korea continued to report the highest levels of R&D intensity, at 5.6% and 4.9% of GDP, respectively.
The OECD Main Science and Technology Indicators (MSTI) are a statistical publication prepared by the Science and Technology Policy (STP) Division of the OECD Directorate for Science, Technology, and Innovation under the aegis of the OECD Working Party of National Experts on Science and Technology Indicators (NESTI), a subsidiary body of the OECD Committee for Scientific and Technological Policy. MSTI provides a set of indicators that reflect the level and the structure of the efforts undertaken by OECD member countries and selected non-member economies. Its contents draw principally on data on financial and human resources devoted to research and experimental development (R&D) as defined in the OECD Frascati Manual, complemented by additional indicators of outputs and potential outcomes of scientific and technological activities, namely patent data and international trade in R&D-intensive industries. In addition to these, MSTI comprises several economic and demographic series from other OECD sources which are used to calculate adjusted indicators which account for differences in the relative size of economies, purchasing power and the effect of inflation.
Indicators on R&D expenditures, budgets, and personnel are derived from the OECD’s Research and Development Statistics database (Research and Development Statistics Database (RDS), which is based on the data reported to OECD and Eurostat in the framework of the joint OECD/Eurostat international data collection on resources devoted to R&D. The sources for the other indicators include the OECD databases on Patents and Bilateral Trade in Goods by Industry and End-use category (BTDIxE).
MSTI is published twice yearly, in March and September, with the former representing the first available R&D performance figures with a global scope. The September publication consolidates the March publication with final data provided by countries.
Territorial coverage of latest available edition
MSTI coverage is defined by the reporting by countries to OECD of R&D statistics that are consistent with the Frascati Manual. These are based on data provided by responsible national bodies to the OECD annual call for R&D data from OECD member countries and selected non-member economies. In its latest available edition, MSTI reports indicators on 37 out of 38 OECD Member countries with most recent data typically reaching up to 2021 (2022 in the case of R&D budgets). Costa Rica, which became the 38th member of the OECD in May 2021 is not yet included in MSTI pending final verification that its R&D statistics are suitable for inclusion in the OECD R&D statistics database on which MSTI R&D indicators are based.
Indicators are also compiled for the OECD aggregate zone, the European Union (EU-27 zone), as well as seven non-member economies: Argentina, People’s Republic of China (hereafter “China”), Romania, Russian Federation, Singapore, South Africa and Chinese Taipei.
In response to Russia's large-scale aggression against Ukraine, the OECD Council decided on 8 March 2022 to immediately suspend the participation of Russia and Belarus in OECD bodies. In view of this decision, the OECD suspended its solicitation of official statistics on R&D from Russian authorities, leading to the absence of more recent R&D statistics for this country in the OECD database, while previously compiled data are still available.
In this latest edition, the OECD has decided to put under review data for a number of R&D indicators for China referring to years 2019, 2020 and 2021, suppressing the publication of several headline indicators for those years until a number of questions on the coherence of expenditure and personnel data have been effectively addressed.
The MSTI indicators can be retrieved from and visualised using the OECD STI Scoreboard platform, where they can be analysed alongside different STI indicators.
The electronic edition is available via the OECD’s data dissemination service, “OECD.stat”. From there, the MSTI Excel file can be downloaded by clicking “export” and then “related files”. The MSTI database is also available online through OECDiLibrary.
The OECD R&D and GBARD Sources and Methods Database contains metadata relevant to the interpretation of R&D series included in MSTI and RDS.