Teams of scientists who spent their days in well-equipped laboratories in the United States formerly brought to market much of the world’s innovations. Now cash-rich countries throughout Asia and much of the Middle East, which hold vast amounts of money from products or oil purchases, are equipping labs and offering to pay scientists well for their efforts. Will the U.S. cease being the principal origin of research and development (R&D)?

Recent research supports the dispersion of R&D. It is becoming “a truly global enterprise with all sectors moving within the not-too-distant future to a near-equal distribution of effort, funds and activity — as opposed to the domination the U.S. has held onto for the past 50 years,” according to an annual Battelle-R&D Magazine report.

The report explains that although R&D will continue to take place in the U.S., much more will be done in Europe and Asia — “dominated by China and India.”

According to Battelle-R&D Magazine, factors affecting where R&D will occur include the following (summarized):

• The desirability of having on-site or near-site technological support for manufacturing;
• The ability to tailor-make products specifically for local-market needs;
• Local-content clauses in operating licenses;
• Cost savings as scientists’ incomes have far greater buying power abroad even when they may be quantitatively less.

In Asia, business and governmental leaders understand the importance of R&D. “In countries with blossoming economies, such as China, South Korea, India and Singapore, governments have identified biotechnology and other high-tech industries as a way to expand beyond basic manufacturing,” explains an editorial at The San Diego Union-Tribune. “They are spending billions to underwrite companies, build high-tech parks and help startup businesses cut through red tape.”

In another part of the world, the same kind of thinking is taking place: “On a marshy peninsula 50 miles from a Red Sea port, King Abdullah of Saudi Arabia is staking $12.5 billion on a gargantuan bid to catch up with the West in science and technology,” The New York Times reports, further noting a Massachusetts Institute of Technology consultant who has advised King Abdullah’s new university to lure international academics with laboratory facilities and grants they cannot find at home.

In part, government policies also affect prime locations for R&D. Almost all governments provide support to higher education, basic research, industrial technology, human health and more throughout the countries covered by the Organization for Economic Cooperation and Development (OECD) with selected data augmented with data from the European Commission, Battelle points out:

The United Kingdom, U.S. and France indicated defense [R&D] as highest priority. Surprisingly, the field of energy research received only one reference as a priority item (from Poland), and in fact was found to be at the bottom of the list of five priority R&D concentrations of the 27 countries.

While some scientists may see the dispersion of the R&D function as inevitable because of the strength of the factors affecting where it occurs, others are not planning to make it easy.

For instance, the 2007 National Nanotechnology Initiative (NNI) Strategic Plan describes the vision, goals and priorities of the NNI to ensure that the United States derives growing economic benefits and improved quality of life for its citizens and remains a global leader in nanotechnology R&D in the years to come,” according to an announcement from the National Nanotechnology Coordination Office (NNCO) last week. The National Nanotechnology Office’s director, Clayton Teague, noted that the new plan “reflects the consensus of the 25 NNI participating agencies as to the goals and priorities of the NNI and provides a framework within which each agency will carry out its own mission-related nanotechnology programs, as well as a path that will sustain coordination of interagency activities.”

One caveat to this seemingly apparent offshoring of R&D is that many companies operate globally and thus may have researchers collaborating in different global regions. While this may muddy the impression, it is more realistic.

What does all of this mean to global economies? Much more on this to come in tomorrow’s Industrial Market Trends newsletter.

Resources

Finding Greener Pastures at Home, Asian Scientists Leaving America
by Terri Somers
The San Diego Union-Tribune, Dec. 16, 2007

Saudi King Tries to Grow Modern Ideas in Desert
by Thanassis Cambanis
The New York Times, Oct. 25, 2007

Annual Research and Development (R&D) Report Reveals Growing Equalization
Battelle-R&D Magazine, January 2008

National Nanotechnology Initiative Releases New Strategic Plan
National Nanotechnology Coordination Office, Jan. 2, 2008