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Visualizing How Much Countries Spend on R&D

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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:

RankCountryR&D Spending (PPP)Global share (%)
#1United States$476.5 billion26.4%
#2China$370.6 billion20.6%
#3Japan$170.5 billion9.5%
#4Germany$109.8 billion6.1%
#5South Korea$73.2 billion4.1%
#6France$60.8 billion3.4%
#7India$48.1 billion2.7%
#8United Kingdom$44.2 billion2.5%
#9Brazil$42.1 billion2.3%
#10Russia$39.8 billion2.2%
#11Italy$29.6 billion1.6%
#12Canada$27.6 billion1.5%
#13Australia$23.1 billion1.3%
#14Spain$19.3 billion1.1%
#15Netherlands$16.5 billion0.9%
All other countries$249.8 billion13.9%

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?

RankCountryR&D (as a % of GDP)
#1South Korea4.3%
#2Israel4.2%
#3Japan3.4%
#4Switzerland3.2%
#5Finland3.2%
#6Austria3.1%
#7Sweden3.1%
#8Denmark2.9%
#9Germany2.9%
#10United States2.7%

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.

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Ranked: Largest Semiconductor Foundry Companies by Revenue

Most of the 10 largest semiconductor foundries in the world, are headquartered in just three Asian countries, accounting for 90% of the entire industry’s revenue.

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A cropped chart showing the largest semiconductor foundry companies by their percentage of global revenues in Q1 2023.

Ranked: Largest Semiconductor Foundry Companies by Revenue

They’re in our phones, cars, planes, and even fridges.

Semiconductor chips have become critical for the modern way of life, and the biggest semiconductor foundry companies rake in billions of dollars from widespread demand.

This chart shows the largest semiconductor foundry companies by their percentage of global revenues in Q1 2023, using data sourced from Trendforce.

โ„น๏ธ We highlight data for companies that only operate foundries (fabrication plants) that manufacture chips for clients, also known as a “pure-play” foundries, as well as companies that design and manufacture their own chips, known as integrated device manufacturers. “Fabless” manufacturers that only design and don’t manufacture their own chips are not included.

Semiconductor Foundry Companies by Revenue

At the top of the list and dwarfing every other company by revenue share is TSMC which earned 60% (or nearly $17 billion) of the entire industry’s revenue in Q1 2023.

Founded in 1987, TSMC is a pure-play foundry that has become Taiwan’s largest company and manufactures products for a host of clients including Apple, NVIDIA, and AMD.

RankCompanyCountryRevenue
(Q1 2023, USD)
1TSMC๐Ÿ‡น๐Ÿ‡ผ Taiwan$16,735M
2Samsung๐Ÿ‡ฐ๐Ÿ‡ท South Korea$3,446M
3GlobalFoundries๐Ÿ‡บ๐Ÿ‡ธ US$1,841M
4UMC๐Ÿ‡น๐Ÿ‡ผ Taiwan$1,784M
5SMIC๐Ÿ‡จ๐Ÿ‡ณ China$1,462M
6HuaHong Group๐Ÿ‡จ๐Ÿ‡ณ China$845M
7Tower Semiconductor๐Ÿ‡ฎ๐Ÿ‡ฑ Israel$356M
8PSMC๐Ÿ‡น๐Ÿ‡ผ Taiwan$332M
9VIS๐Ÿ‡น๐Ÿ‡ผ Taiwan$269M
10DB Hitek๐Ÿ‡ฐ๐Ÿ‡ท South Korea$234M
Other$556M
Global Total$27,860M

Note: Revenue based on the following conversion rates: USD 1 = WON 1,276; USD 1 = NTD 30.4.

Well behind TSMC in foundry revenues is integrated device manufacturer Samsung, the biggest company in South Korea, which made $3.4 billion (12.4% of the industry’s revenue) from its semiconductor manufacturing business.

GlobalFoundries from the U.S., UMC from Taiwan and SMIC from China round out the top five, with each taking home around 6% of industry’s revenue share in Q1 2023. The former spun out from AMD’s manufacturing arm when the company went fabless in 2009.

Industry concentration is apparent in semiconductors. For example, the top 10 semiconductor foundry companies account for 98% of the entire industry’s revenue. Furthermore, 90% of the market is dominated by companies in just three Asian countries: Taiwan, South Korea, and China.

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