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China has edged further ahead of Europe, spending more on R&D in absolute terms than the EU-28 for the first time in 2014. Gross Domestic Expenditures on R&D (GERD) data for 41 economies in 2014 – Organisation for EconomicCo-operation and Development (OECD) members plus Argentina, China, Chinese Taipei, Romania, Russia, Singapore and South Africa – show Korea spent 4.29% of its GDP on R&D in 2014, followed by Israel at 4.11%. In third place, Japan spent 3.58%.

Korea and Israel are investing much more in research & development as a share of GDP than other advanced economies with lower public research and development (R&D) budgets holding back spending in many countries, new OECD data shows.

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China invested 2.05% of its GDP in R&D, passing the 2% goal set in its 2006-10 economic plan. The EU-28 averaged 1.94%, well below the bloc’s target to spend 3% of GDP on R&D by 2020.

In an indication of 2015 trends, provisional 2015 government budget data for 19 OECD countries shows public R&D spending slowing again after briefly stabilising in 2014. The figures do not include the (off-budget) cost of tax incentives for business R&D, where they exist, which have been increasing in many countries but not always enough to offset budget cuts. Of the 19 countries, two thirds reduced their public R&D budgets in real terms, leaving the total for the group down 1.3%.

Gross Domestic Expenditure on R&D as a percentage of GDP, 2000-14

China’s R&D spending has risen steadily from 0.57% of GDP in 1995. It surpassed the UK in 2011 and the EU in 2012, as a share of GDP. EU R&D spending has risen only gradually from 1.60% of GDP in 1995. The 9% rise in China’s 2014 R&D spending was its lowest growth rate in real terms since 1996.

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OECD countries spent an average of 2.37% of GDP on R&D in 2014, unchanged from 2013. Annual spending rose 2.1% in real terms in 2014 in the OECD area, down from 2.8% in 2013. Most of the growth is from business R&D (up 2.8%), while R&D spending in government institutions rose just 1.0% and R&D in higher education slipped by 0.2%.

The most recent available data for the United States shows it spent 2.74% of GDP on R&D in 2013.

In volume terms (at current prices), China’s 2014 R&D spending was equivalent to 80% of the US level in 2013 and it stood at 102% of the EU total. The number of patents filed by Chinese inventors continued to rise, placing China behind only the US and Japan in filings.

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