Researchers live in a world of variants — coronaviral variants are taking center stage in the media right now. But in 2022, researchers will also have to deal with the challenges of accelerating economic inflation rates, global warming, electrification of everything, fifth- and sixth-generation broadband uncertainties, declining animal and plant diversities, declining global population rates, science and technology immigration limitations and wide political divisions to name just a few.
For 2022 and the 63rd consecutive year, the editors of R&D World are focusing on the annual global variants of R&D investments for the upcoming calendar year. In this annual report, we document the changing R&D investments in academia, government and industrial organizations for the top 116 R&D-investing countries in the world. We look at the reasons for these changes, their effects on current and future spending, and the net technological results.
For 2022, R&D World’s editors forecast that $2.476 trillion will be invested globally in R&D efforts, an increase of 5.43% over the $2.348 trillion that was spent in calendar 2021. More than 80% (81.6% or $104 billion) of that 2022 R&D spending increase can be accounted for by the annual increases in the Top Ten R&D spending countries (U.S. to Brazil). The overall list of R&D spenders are comprised of 116 countries with a total 2022 forecast GDP of $118.6 trillion, according to the International Monetary Fund’s (IMF’s) October 2021 World Economic Outlook. The ratios of R&D to GDP vary from country to country with a high of 4.8% (Israel) to a low of 0.24% (Indonesia) — for the top 40 R&D spending countries.
Pandemic-affecting changes resulted in smaller-than-expected R&D spending changes over the past two years. The overall global economic growth figures slowed in 2021 from the rapid global growth seen in the years up to that date. But the overall R&D to GDP figures changed only slightly, so R&D growth slowed from what was expected due to slower overall economic growth, but the actual amount of R&D performed still grew as did the country rates.
Global production slowed in several areas, including automotive and ICT (information and communications technology), due to pandemic-related labor issues and supply limitations. But R&D work was less affected than production in these industries. If anything, R&D grew even faster than might have been expected.
And even as this report is being created, the automotive and ICT industries are still struggling to overcome the “chip shortages” that caused their production rates (and revenues) to plummet. Automotive firms were caught in a production squeeze due to both pandemic-related labor issues and the transition from internal combustion drive systems to battery power electric vehicles (EVs with their own increased chip demands). But R&D efforts continued and likely even grew as the demands and strategies for dramatically new products increased.
The variations and trends in R&D spending in different geographical areas seen in previous issues of this global R&D funding forecast continued and expanded in 2022. As seen in the attached tables, countries in North America and Europe continued to lose overall R&D spending shares, while emerging countries in Asia continued to account for more overall R&D spending.
Japan is an outlier in the Asian R&D region, and while it continues to be the third-largest global R&D spender, its overall economic malaise over the past decade may cause it to slide in the rankings within the next two to three years. Countries in the economically depressed South American and African regions continued to invest smaller amounts of monies and resources into their R&D programs (than were invested in the other global regions) and as a result they fell further into the R&D “share hole.”
Countries in the Middle East and Russia/Commonwealth of Independent States (CIS) basically held to a status quo, neither gaining nor losing R&D market shares, except in a country-by-country basis (i.e., Israel continues to invest heavily in R&D efforts more so than any of its region’s neighbors.) Russia also historically has invested heavily in R&D, more so than any of its previous Communist CIS associates. Russia also has massive resources and technological capabilities and continues to be consistently in the top 10 rankings of R&D spenders. Russia is not expected to move up or down in the R&D spending rankings over the next several years. Technologically, Russia might fall behind some countries in specific areas, but it also could move ahead of other countries in other areas.
China continues to be the standout global R&D competitor challenging U.S. leadership in almost every technological, economic and socio-militaristic area. China holds true consistently to most sections of its five year plans. U.S. industrial and governmental strategies continue to hold most of China’s R&D goals in abeyance, but may lose ground in some specific areas where China invests more of its vast resources.
The continued globalization of technology may also work against China’s efforts. For example, the electrification of automobiles and trucks is expanding globally far in excess of anything being done individually by the U.S. or China. Mega factories building millions of next- generation batteries are being developed and built on a global scale exceeding anything ever seen before. China and the U.S. are getting on this bandwagon, but neither are likely to become the leader anytime soon — there already are too many players.
The semiconductor chip shortage has been addressed by all of the major chipmakers including Intel, Samsung, Taiwan Semiconductor Manufacturing Co. (TSMC), and others with most investing billions of dollars to build multiple chip plants in North America, Europe and Asia. These chip “fabs” are long-lead projects and not expected to start production until 2023 to 2025. Some automakers (i.e., Ford Motor Co.) are even trying to shortcut these supplier issues by building their own semiconductor plants. Tesla got around the chip shortage issue by both minimizing the use of specialty high-performance chips in its vehicles and by making software changes that compensated for the chip shortages — i.e., a strong R&D-based solution.
The COVID-19 pandemic and its follow-on variants were great learning cases where global collaborative, technological and support mechanisms stood out to quickly solve a severe health problem. The pandemic is obviously still not completely over, but the successful efforts by a small number of people and companies controlled the problem and prevented it from becoming a complete failure that could have challenged the “Black Death” (bubonic plaque) of the 14th century.
Technology and R&D won out, even if politics sometimes got in the way. Its unlikely that the technologies and lessons-learned will be duplicated to erase cancer or cardiac problems, but they’re likely to inspire new avenues of attack. Those experiments have already been started, and more will begin in 2022, but their overall results won’t be seen for several years. And the initial results may only slightly mediate specific health concerns. But that’s still a win-win situation for many patients.
2022 will be a watershed year for R&D. Numerous EVs will come to market this year culminating several years of intense R&D. More announcements of EVs are expected throughout the year, touting technologies for faster charge cycles, less expensive and better performing EV battery systems, and enhanced electric grid and power systems to support the growing EV market.
Similarly, numerous space-based R&D programs are expected to see major technological milestones, including operation of NASA’s James Webb Telescope in July and SpaceX’s Starship initial launch this Spring. Severe droughts and expanded weather extremes are likely to continue and enhance the importance of technologically addressing aspects of global climate change. The COVID-19 pandemic will also very likely become endemic by no later than June, bringing back some semblance of social and work-related normality. R&D related to COVID-19 will continue, especially as the virus is expected to be with us for many years to come — the virus from the Spanish Flu of 1918 continues to be in the environment more than 100 years later.
This article is the first part of R&D World’s annual Global Funding Forecast (Executive Edition). This report has been published annually for more than six decades. The Executive Edition (which includes this section and one additional one) will be published in the Spring 2022 digital issue of R&D World. To purchase the full, comprehensive report, which is 50 pages in length, please visit the 2022 Global Funding Forecast homepage. Previous years editions can also be purchased there.