[Updated August 8, 2024]
The global R&D map is being redrawn, caught between forces of nationalism and the undeniable pull of international collaboration. While the aftershocks of the pandemic and shifting political winds have led some nations to turn inward, the race for innovation is driving a surprising surge in cross-border investment. For instance, South Korea’s Ministry of Science and ICT, Seoul, announced earlier this year that it would operate R&D centers in the U.S. and Europe to bolster its R&D initiatives. Tokyo and Shenzhen are also seeing an influx of capital from abroad.
As R&D infrastructure is strongest in the U.S., Asia, and Europe, it is no wonder that cities in these regions are looking outward to tap into the global pool of talent and capital in their quest capitalize on emerging technologies. This dynamic is apparent in the following exploration of some of the world’s most active R&D hubs, which are loosely ranked by the R&D spending of prominent companies based on data form The 2023 EU Industrial R&D Investment Scoreboard.
North America
United States
Silicon Valley remains a unique international innovation ecosystem, despite recent challenges. The region leads nationally in VC investment, although it has moderated recently. Boston and Cambridge continue to be premier research hubs, especially in biopharma, attracting substantial funding. New York City’s biotech and life sciences sectors are thriving, driven by significant investments and a supportive policy environment. Los Angeles has become a hub for “tech-tainment,” where technology and entertainment industries converge. San Diego continues to cement its reputation as a life sciences powerhouse, attracting foreign companies seeking to establish or expand their R&D operations.
Canada
Toronto is emerging as a leader with a strong emphasis on AI and significant job growth in key sectors. The city’s tech sector employs more than 300,000 people and attracting annual investments topping $5 billion. Unilever selected Toronto for its global AI hub in 2023.
Asia
Japan
Japan is aiming to revitalize its semiconductor industry. The Japanese government has established a 100 trillion yen target for foreign direct investment in Japan. Tokyo Electron Ltd. (TEL), Japan’s largest chip company, is leading this revitalization effort. Tokyo is also home to Sony and Toshiba, with the latter investing roughly 34 billion yen in a new R&D site called Innovation Palette in Kawasaki.
China
Shenzhen continues to solidify its position as an R&D trailblazer, with R&D investment reaching 188.049 billion yuan (US$26.31 billion) in 2023, representing 5.81% of its GDP. Beijing is seeing robust R&D growth, thanks to government incentives and a focus on high-tech and emerging industries, especially in AI. Shanghai registered record-high foreign investment hitting $24 billion in 2023, with a key focus on biomedicine.
South Korea
Seoul is witnessing record-high R&D investments from both government and corporate sectors, with a focus on maintaining its leadership in semiconductors and display technologies. The South Korean national R&D budget has grown to over 30 trillion won over the past six years.
Singapore
Singapore continues its strong commitment to R&D, especially in deep tech, with a significant government budget supporting strategic growth. The government is investing more than S$11 billion in national research and development efforts, with a focus on AI, finance, and clean energy.
India
Bangalore, the “Silicon Valley of India,” is experiencing a surge in R&D cash, especially from multinational companies like AMD and Medtronic. The city is home to a large number of engineering colleges and institutes, producing more than 90,000 engineering graduates each year.
Europe
United Kingdom
London remains a central R&D hub with a prominent focus on fintech, healthtech, and AI. The ICT sector in London is thriving, with AI-related companies capturing £2.2 billion in investment in 2023. Pharma companies like GSK and AstraZeneca are also leading R&D investors globally.
France
The Paris Region attracts substantial foreign direct investment (FDI) and excels in R&D, especially in health industries and renewable energy. The region accounted for 41% of France’s total R&D expenditure in 2021, with R&D expenditure hovering around €21.7 billion while employing 182,772 full-time professionals.
Germany
Munich continues to solidify its position as a leading R&D hub in Germany, with a strong focus on the automotive industry and attracting major international tech companies. Berlin benefits from Germany’s strong R&D landscape, with increased investments in the automotive, ICT, and pharmaceutical sectors. The city has also launched the “Berlin Quantum Alliance” to strengthen R&D efforts related to quantum technologies.
Sweden
With Stockholm leading the way, Sweden’s intramural R&D expenditure hit SEK 221.8 billion in 2023. The country’s R&D intensity increased to 3.57% in 2023, with the automotive, ICT producers, and industrial sectors accounting for 78.8% of total Swedish R&D investment.
Middle East
Israel
Tel Aviv continues to be a major R&D hub, with private funding for Israeli tech in 2023 estimated to reach nearly $10 billion. The life sciences sector received about 30% of investments by the Israel Innovation Authority in 2022. Israel’s climate tech sector is also expanding, with 516 companies operating in this space.
Australia
Despite trends of declining R&D expenditure in Australia, Melbourne continues to attract investments in key sectors, focusing on digitalization and green technologies. The city has five universities ranked in the top 100 globally, with Monash University especially renowned.
Recent trends in the IP landscape
The intellectual property (IP) landscape has growing increasingly intense in recent years, given a surge in filings related to AI, smart manufacturing, and biomaterials. While the United States remains a powerhouse of innovation, the continued ascent of China as an innovator is beginning the shift the landscape. Consequently, the U.S. has recently fallen behind global competitors. In the U.S., more patents are going to firms outside of the country. In 2022, the U.S. Patent and Trademark Office awarded 47% of patents (152,000) to domestic inventors, while 53% went to foreign inventors, according to the U.S. National Science Board.
Outside of AI, smart manufacturing and biomaterials, biomedical applications have seen growth, especially in areas such as bioelectronic materials, natural biomaterials, and bioinks for 3D printing of biological structures.
Within the U.S., patent activities are largely concentrated along the East and West Coasts, the Great Lakes region, and parts of the Southwest.
The IP landscape isn’t only limited to patents. And shifts are underway with trademarks as well. Between 2012 and 2022, the number of trademarks assigned in the U.S. was up 12%. Conversely, China saw a much greater increase, with trademark assignments leaping from 2,810 to 120,004 during the same period.
All of the images pictured are from Adobe Stock apart from the Berlin image, which is from Wikimedia Commons.
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