China to become second largest R&D spender

China will soon overtake Japan as the world's second heaviest spender on research and development, according to a report from the Battelle Memorial Institute.

A nonprofit group that conducts scientific research, Battelle published its findings today as part of an article in its R&D Magazine. The article and its full supplementary report (PDF) looked at global R&D spending in general and across six specific segments--Information Technology, Electronics, Life Sciences, Aerospace/Defense/Security, Energy, and Advanced Materials.

(Credit: Battelle)

Next year, China is expected to spend $153.7 billion on R&D, a big jump from $141.4 billion this year. That will put it in second place globally ahead of Japan, which is due to spend $144.1 billion in 2011, a slight gain from this year's $142 billion. Though most nations pulled back on spending during the recession, Asian countries increased their R&D budgets, according to Battelle.

China in particular kept its pace of 10 percent annual growth in R&D spending even during the economic meltdown of 2008 and 2009, one factor that set it apart from many other countries, said Battelle.

The continued expansion of R&D in China is both inspiring in magnitude and worrisome from a U.S. competitive perspective," Marty Grueber, Battelle Research Leader and co-author of the report, said in a statement. "The Chinese are doing everything in their power to grow and develop through an increasing understanding and emphasis on research and technology. Even most of their highest ranking political leaders are engineers."

The United States will continue to be the world's biggest R&D spender, doling out $405.3 billion next year, compared with $385.8 billion this year. Spending on industrial R&D should recover following a recessionary downturn. But the huge number of dollars spent on defense R&D (more than two-third of the federal total) may make that area one the first under review for possible cuts.

Europe will be under the greatest pressure to justify government spending on R&D, according to Battelle. Facing struggling economies in Greece, Spain, and Ireland, the European Union is unlikely to meet its goal to match the U.S.' level of R&D spending (2.7 percent of Gross Domestic Product).

Overall, total spending on R&D throughout the world is expected to rise 3.6 percent to almost $1.2 trillion next year.