Why America Must Refocus on R&D as Competitors Catch Up

In this week’s Path Forward, U.S. Chamber President and CEO Suzanne P. Clark met with leaders in science to unpack the current state of R&D and what the United States must do to continue to lead the world in innovating new solutions to address challenges and strengthen society.

Path Forward, a U.S. Chamber of Commerce Foundation event series, helps business and community leaders find the answers they need to navigate a post-pandemic world.

America’s Lead Dwindles as China Catches Up

Dr. France Córdova, president of the Science Philanthropy Alliance, and 14th director of the National Science Foundation, said that the U.S. is no longer the undisputed leader in all R&D positions in the world.

“We have competition, and that means we have to get going,” Córdova said. “We really have to think carefully about our investment in research and development in order to be the leader among nations in addressing things like pandemics and climate change.”

Córdova said that the number one global competitor in research and development is China, which has increased its R&D spending 14% year-on-year—a growth rate that is four times the U.S. investment in R&D.

“China has gained rapidly in recent years,” Córdova said. “Lots of other nations are also stepping up their investment in R&D. So now, the U.S. ranks only number six in ‘R&D Intensity’: the ratio of R&D investment compared to GDP.”

Dr. Bruce Guile, project lead for Global Innovation and National Interests at the BRG Institute, said that America’s lead in R&D funding had dwindled significantly in recent decades. He reported that total American investment in R&D is now less than 30% of the global total. By comparison, in the 1960s and 70s, the U.S. dominated this field, with almost 70% of the global total invested in R&D.

“The rest of the world has doubled down and gotten better at R&D, lab-to-fab, and innovation,” Guile said. “We’re no longer miles ahead of the competition looking back over our shoulder; we are footsteps ahead of other countries who are investing just as much.”

Funding the Research and Development Pipeline

Guile added that it’s important to fund the entire innovation pipeline over the long term.

This means ensuring America is funding basic, fundamental research that can propel major scientific breakthroughs, as well as leveraging those breakthroughs once they occur.

“A lot of what matters in terms of economic security is how well you take advantage of advances in science and technology to profit from them, to create jobs—all of the things that go downstream from the research lab.”

Clark said that it is absolutely vital to have the right protections and policies in place to boost private sector innovation and highlighted the recent rapid development of COVID vaccines as a case in point.

“The private sector’s stunning capacity for innovation was showcased for the world in the race for COVID-19 vaccines and therapeutics,” Clark said. “These were made possible by decades of R&D—supported by strong IP protections—and the chance for businesses to make a return on very costly endeavors.”

Córdova said that the solution is reversing some of these trendlines by investing more money in R&D, whether it’s done by the government or the private sector.

“I think everybody should invest more, and they should do it very strategically and thoughtfully,” Córdova said. “I have been impressed by more recent partnerships between industry and the government in fields like AI, quantum science, and biotechnology—big areas that are absolutely essential for us to rank right at the top…There are no magic numbers—just invest more, realizing how very important it is to our economic success!”