Technology
Visualizing How Much Countries Spend on R&D
Visualizing How Much Countries Spend on R&D
Innovation can be a major competitive advantage for any developed economy.
However, achieving a sustainable rate of innovation isn’t necessarily a straightforward exercise. The reality is that innovation is a complex and difficult outcome to measure, and there are many different variables that factor into it at a national level.
Research and development (R&D) expenditure is certainly one of these factors – and while it doesn’t always directly correlate with innovation outcomes, it does represent time, capital, and effort being put into researching and designing the products of the future.
Measuring R&D Spend
Today’s infographic comes to us from HowMuch.net, and it compares R&D numbers for nearly every country in the world. It uses data from the UNESCO Institute for Statistics adjusted for purchasing-power parity (PPP).
As you can see, R&D expenditures are heavily concentrated at the top of the food chain:
Rank | Country | R&D Spending (PPP) | Global share (%) |
---|---|---|---|
#1 | United States | $476.5 billion | 26.4% |
#2 | China | $370.6 billion | 20.6% |
#3 | Japan | $170.5 billion | 9.5% |
#4 | Germany | $109.8 billion | 6.1% |
#5 | South Korea | $73.2 billion | 4.1% |
#6 | France | $60.8 billion | 3.4% |
#7 | India | $48.1 billion | 2.7% |
#8 | United Kingdom | $44.2 billion | 2.5% |
#9 | Brazil | $42.1 billion | 2.3% |
#10 | Russia | $39.8 billion | 2.2% |
#11 | Italy | $29.6 billion | 1.6% |
#12 | Canada | $27.6 billion | 1.5% |
#13 | Australia | $23.1 billion | 1.3% |
#14 | Spain | $19.3 billion | 1.1% |
#15 | Netherlands | $16.5 billion | 0.9% |
All other countries | $249.8 billion | 13.9% |
Put together the numbers for the U.S. ($476.5 billion) and China ($370.6 billion), and it amounts to 47.0% of total global R&D expenditures. Add in Japan and Germany, and the total goes to 62.5%.
At same time, the countries left off the above list don’t even combine for 15% of the world’s total R&D expenditures.
As a Percentage of GDP
Measuring R&D in absolute terms shows where most of the world’s research happens, but it fails to capture the countries that are spending more in relative terms.
Which countries allocate the highest percentage of their economy to research and development?
Rank | Country | R&D (as a % of GDP) |
---|---|---|
#1 | South Korea | 4.3% |
#2 | Israel | 4.2% |
#3 | Japan | 3.4% |
#4 | Switzerland | 3.2% |
#5 | Finland | 3.2% |
#6 | Austria | 3.1% |
#7 | Sweden | 3.1% |
#8 | Denmark | 2.9% |
#9 | Germany | 2.9% |
#10 | United States | 2.7% |
As you can see, countries like South Korea and Japan allocate the highest portion of their economies to R&D, which is part of the reason they rank so highly on the list in absolute terms as well.
Meanwhile, there are some smaller economies – namely Israel (4.2%) – that spend a far higher portion than normal on research.
Technology
Nvidia Joins the Trillion Dollar Club
America’s biggest chipmaker Nvidia has joined the trillion dollar club as advancements in AI move at lightning speed.

Nvidia Joins the Trillion Dollar Club
Chipmaker Nvidia is now worth nearly as much as Amazon.
America’s largest semiconductor company has vaulted past the $1 trillion market capitalization mark, a milestone reached by just a handful of companies including Apple, Amazon, and Microsoft. While many of these are household names, Nvidia has only recently gained widespread attention amid the AI boom.
The above graphic compares Nvidia to the seven companies that have reached the trillion dollar club.
Riding the AI Wave
Nvidia’s market cap has more than doubled in 2023 to over $1 trillion.
The company designs semiconductor chips that are made of silicon slices that contain specific patterns. Just like you flip an electrical switch by turning on a light at home, these chips have billions of switches that process complex information simultaneously.
Today, they are integral to many AI functions—from OpenAI’s ChatGPT to image generation. Here’s how Nvidia stands up against companies that have achieved the trillion dollar milestone:
Joined Club | Market Cap in trillions | Peak Market Cap in trillions |
|
---|---|---|---|
Apple | Aug 2018 | $2.78 | $2.94 |
Microsoft | Apr 2019 | $2.47 | $2.58 |
Aramco | Dec 2019 | $2.06 | $2.45 |
Alphabet | Jul 2020 | $1.58 | $1.98 |
Amazon | Apr 2020 | $1.25 | $1.88 |
Meta | Jun 2021 | $0.68 | $1.07 |
Tesla | Oct 2021 | $0.63 | $1.23 |
Nvidia | May 2023 | $1.02 | $1.02 |
Note: Market caps as of May 30th, 2023
After posting record sales, the company added $184 billion to its market value in one day. Only two other companies have exceeded this number: Amazon ($191 billion), and Apple ($191 billion).
As Nvidia’s market cap reaches new heights, many are wondering if its explosive growth will continue—or if the AI craze is merely temporary. There are cases to be made on both sides.
Bull Case Scenario
Big tech companies are racing to develop capabilities like OpenAI. These types of generative AI require vastly higher amounts of computing power, especially as they become more sophisticated.
Many tech giants, including Google and Microsoft use Nvidia chips to power their AI operations. Consider how Google plans to use generative AI in six products in the future. Each of these have over 2 billion users.
Nvidia has also launched new products days since its stratospheric rise, spanning from robotics to gaming. Leading the way is the A100, a powerful graphics processing unit (GPU) well-suited for machine learning. Additionally, it announced a new supercomputer platform that Google, Microsoft, and Meta are first in line for. Overall, 65,000 companies globally use the company’s chips for a wide range of functions.
Bear Case Scenario
While extreme investor optimism has launched Nvidia to record highs, how do some of its fundamental valuations stack up to other giants?
As the table below shows, its price to earnings (P/E) ratio is second-only to Amazon, at 214.4. This shows how much a shareholder pays compared to the earnings of a company. Here, the company’s share price is over 200 times its earnings on a per share basis.
P/E Ratio | Net Profit Margin (Annual) | |
---|---|---|
Apple | 30.2 | 25.3% |
Microsoft | 36.1 | 36.7% |
Aramco | 13.5 | 26.4% |
Alphabet | 28.2 | 21.2% |
Amazon | 294.2 | -0.5% |
Meta | 33.9 | 19.9% |
Tesla | 59.0 | 15.4% |
Nvidia | 214.4 | 16.19% |
Consider how this looks for revenue of Nvidia compared to other big tech names:
$NVDA $963 billion market cap, 38x Revenue
$MSFT $2.5 trillion market cap, 12x Revenue$TSLA $612 billion market cap, 7.8x Revenue$AAPL $2.75 trillion market cap, 7.3x Revenue$GOOG $1.6 trillion market cap, 6.1x Revenue$META $672 billion market cap, 6x Revenue pic.twitter.com/VgkKAfiydx— Martin Pelletier (@MPelletierCIO) May 29, 2023
For some, Nvidia’s valuation seems unrealistic even in spite of the prospects of AI. While Nvidia has $11 billion in projected revenue for the next quarter, it would still mean significantly higher multiples than its big tech peers. This suggests the company is overvalued at current prices.
Nvidia’s Growth: Will it Last?
This is not the first time Nvidia’s market cap has rocketed up.
During the crypto rally of 2021, its share price skyrocketed over 100% as demand for its GPUs increased. These specialist chips help mine cryptocurrency, and a jump in demand led to a shortage of chips at the time.
As cryptocurrencies lost their lustre, Nvidia’s share price sank over 46% the following year.
By comparison, AI advancements could have more transformative power. Big tech is rushing to partner with Nvidia, potentially reshaping everything from search to advertising.
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