2012 R&D Funding Forecast Shows Promising Global Growth Coupled With High Expectations for Commercialization of Discoveries

The Battelle R&D Magazine annual Global R&D Funding Forecast shows global research and development (R&D) spending is expected to grow by about 5.2 percent in 2012 to more than $1.4 trillion.  The report indicates that spending on R&D in the U.S. is expected to keep pace with inflation in 2012, increasing 2.1 percent to $436 billion and will be the largest investment by any country. However, the report projects Asian markets will increase R&D spending by about 9 percent, driving the worldwide increase of 5.2 percent to $1.4 trillion, according to the survey.  Elsewhere in the world, growth remains strong and stable in the aftermath of the global recession. Greece is the only country among the world’s top 40 R&D spenders that is not expected to increase its R&D budget during the next year.

Another notable trend the Funding Forecast reveals is the increased expectation that R&D investments will provide financial returns and positive commercial outcomes. Several years ago, only 10 percent of U.S. industries calculated return on investment (ROI) from R&D efforts, while data from a survey that is part of the Funding Forecast now indicates that 40 percent measure that figure.

The Forecast specifically examines five technology-intensive industries chosen for their overall importance in terms of U.S. corporate, federal and global industry R&D. These include:

Aerospace and Defense:  Globally, aerospace and defense industry R&D spending will grow by 1.9 percent to reach $26.2 billion in 2012.  Much of this will be driven by U.S. defense spending on unmanned and autonomous vehicles and real-time situational awareness and sensor systems.

Energy: Energy-related research sponsored by U.S. manufacturers and technology providers will reach nearly $6.7 billion in 2012, up 23.1 percent from 2011. Global spending by energy-related companies will grow by 7.8 percent to reach $17.9 billion in 2012. Key areas include both energy supply and demand and relate to both stationary power (deploying clean electricity, modernizing the grid and increasing building/industrial efficiency) and transport power (deploying alternative hydrocarbon fuels, electrifying the vehicle fleet, and increasing vehicle efficiency).

Life Science: United States R&D spending in the life science industry is actually expected to decline by 5.7 percent to $73.2 billion in 2012 as pharmaceutical firms tighten their R&D budgets. Global R&D spending in the industry also is forecast to decline by 2.2 percent to $147.3 billion.

Information and Communication Technologies (ICT):  U.S. R&D spending in the ICT industry is forecast to increase by 9.9 percent, reaching $138.8 billion in 2012. This U.S. growth helps drive an overall global ICT industry growth of 4.1 percent to $238.5 billion.  Information from The Economist’s Intelligence Unit (EIU) affirms that the U.S. remains the world’s most competitive country in ICT, but notes that developing nations are beginning to close the gap. The U.S. and Japan make up nearly 70 percent of all global ICT investments.

Chemicals and Materials: R&D in the broadly defined chemicals and materials industry is expected to grow by 11.4 percent in the U.S. to $9.3 billion in 2012, while growing by 3.8 percent globally to $33.8 billion.  Nanotechnology and its applications continue to pervade all industrial applications with biomedical applications beginning during the past two years.

An emerging priority in advanced materials is a heightened focus on developing alternative sources or processes related to rare earth metals because of China’s recent export limits on supplies. In the industrial sector around the world, closed non-Chinese rare earth mines are being re-opened; however, the environmental requirements for operating these mines have increased since they closed, making additional R&D and capital expenditures necessary to develop new and improved processing programs.

To learn more, see the release from Battelle:
http://www.battelle.org/spotlight/12-16-11_forecast.aspx

The full Global R&D Funding Forecast can be found at:
http://www.battelle.org/ABOUTUS/rd/2012.pdf.