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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 (%)
All other countries$249.8 billion13.9%
#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%

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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Data Visualization

All the S&P 500 Women CEOs in One Timeline (2000-2019)

Since the turn of the century, only a meager 5.6% of S&P 500-indexed companies have been led by women. Today’s interactive timeline highlights their tenures.

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All the S&P 500 Women CEOs in One Timeline (2000-2019)

Gender equality has made significant strides since the days of Rosie the Riveter. The iconic wartime image continues to symbolize womens’ empowerment in the present—especially in politics and the workforce.

Yet, the higher and further women get in their careers, it’s clear that barriers still remain. Today’s interactive timeline comes to us from Alex Architektonidis of BoardEx, and it tracks all the women chief executive officers (CEOs) of companies listed in the S&P 500 index since the turn of the century.

The kicker? Across the 500 large-cap companies in the index, only 70 women have ever held the position of CEO or similar titles—and only 28 women currently have this status.

Which Industries Have the Most Women CEOs?

The S&P 500 covers approximately 80% of the U.S. equity market by capitalization. Since the index is fluid and regularly updated, women CEOs were selected based on whether their company was listed in the index during their tenure.

Out of all the sectors represented on the timeline, the top categories are retail with 14 women CEOs, engineering and tech with 10 women CEOs, and finance with 9 women CEOs. Food & beverage and utilities are tied with 7 women CEOs each.

Women Leading in the Corporate World

Topping the list is Marion Osher Sandler, the first and longest-serving woman CEO in the United States. She held the title for nearly 27 years at Golden West Financial Corp (from 1980 to 2006), a company she co-founded and grew to $125 billion in assets.

The next person in line for the longest female-led CEO term is Debra A Cafaro, from the healthcare-focused real estate investment trust Ventas Inc. Cafaro has been CEO of Ventas for 20 years, and generated a cumulative total return of 2,559% since 1999—the S&P average for returns over the same time period was only 215%.

Only two women CEOs show up more than twice on the timeline. The first is Meg Cushing Whitman, who served as President/CEO of Ebay from 1998–2008, Chairman/President/CEO of HP Inc. from 2011–2015, and finally as the CEO of Hewlett Packard from 2015 to 2018. In total, Whitman has spent over 16 years as CEO of these S&P 500 companies.

However, Carol Ann Bartz also has an impressive CV, with nearly 17 years as a CEO under her belt. Bartz was the Chairman/President/CEO of the software corporation Autodesk from 1992–2006, and later on at Yahoo from 2009 to 2011.

The most recent addition to this list is Julie Spellman Sweet, who became the CEO of Accenture on September 1st. She was previously the CEO of Accenture’s North American division, and has been crowned on Fortune’s “Most Powerful Women” list from 2016–2018 consecutively. Sweet’s appointment aligns well with Accenture’s corporate diversity targets—the company is aiming for 25% women in managing director roles globally by 2020.

There’s More Work To Be Done

There’s a growing body of evidence that corporate diversity improves a company’s financial bottom line. A recent CNBC analysis shows that in 2019, over half of female CEOs led their company’s stocks to outperform the S&P 500 index, with some even showing quadruple-digit percentage returns (as previously mentioned with Ventas).

Despite womens’ contributions to nearly half the labor force and consistent success as CEOs, they are disproportionately represented higher up the ladder. Women CEOs still lead a meager 5.6% of S&P 500 companies overall—in fact, women CEO appointments are actually slowing down, averaging less than 6% since 2015.

Such stunted growth is setting back equality at the C-suite level drastically. A joint report between the non-profit Lean In and the consulting firm McKinsey & Co. offers some insight into the reasons underlying this disparity:

Since 2015… corporate America has made almost no progress in improving women’s representation. From the outset, fewer women than men are hired at the entry level. And at every subsequent step, the representation of women further declines.

Women in the Workplace 2018

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Investor Education

Why Investors Should Rethink Traditional Income Strategies

Traditional longer-terms bonds are no longer as effective—so which additional income strategies should investors be considering?

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Why Investors Should Rethink Traditional Income Strategies

Humans are creatures of habit. We all have daily routines, whether it’s walking the same lunchtime route, watching a familiar TV show, or cooking the same meal over and over again. Once we develop a pattern, it can take a drastic change to convince us to rethink our approach.

One such shake-up to ingrained investment habits is the changing landscape of income investing.

In today’s infographic from New York Life Investments, we explain why traditional long-term bonds may not be as effective as they were in the past, and which additional income strategies investors can consider.

The Status Quo

For years, investors have relied on traditional longer-term bonds as the centerpiece in an income portfolio. These debt instruments usually pay out interest to investors on a predetermined schedule, providing a steady income stream investment. Historically, they have also been subject to less volatility than equities.

The typical bond portfolio is diversified, much like the Bloomberg Barclay’s U.S. Aggregate Index. Here’s how the sectors are broken down in the index:

SectorMarket Value
Treasury39.5%
Government-Related5.8%
Corporate25.0%
Securitized29.7%

Unfortunately, this income strategy has been less effective in recent years. Over the last decade, core bond duration has increased by 1.5 years while yields have decreased by almost 2%. Essentially, interest rate volatility has increased—but investors are less compensated for the risk.

In light of low rates and higher expected market volatility, it’s critical that investors explore other income solutions. Luckily, there are many lesser-known asset classes for investors to consider.

Additional Income Strategies: An Investor’s Choice

When investors decide how to re-allocate, they can keep these objectives in mind:

  1. Preservation of principal (risk level)
  2. Pursuit of capital (growth potential)
  3. Perseverance in markets (long-term objectives)

Which additional income strategies can they explore?

Taxable Municipal Bonds

Issued by state and local governments, the yield of taxable munis has historically been higher than that of other sectors. Taxable munis also have a strong credit rating—over 76% of U.S. municipal bonds outstanding are A+ rated or better.

Insured Municipal Bonds

Investors can get additional downside protection with insured municipal bonds, which are guaranteed to pay interest and principal back by private insurers. They have historically performed similar to munis while capturing less of the “downside”, often providing an attractive risk-adjusted return for income investors.

Short-duration, High-yield Bonds

Bonds with a shorter duration and higher yield can be a lower volatility approach to achieving the same income investing goals.

Yield and Risk in Bonds (July 1, 2014 – June 30, 2019):

Bond TypeYieldStandard Deviation (annualized)Yield per Unit of Risk
U.S. Aggregate Bonds2.492.940.85
High Yield Bonds6.055.601.08
Low-duration, High-yield bonds5.003.901.28

Short duration funds have lower interest rate risk, and can offer attractive yield per unit of risk.

Yield-Centric Equities

Equities can also play a role in an income focused portfolio. Investors should look for established companies that are achieving:

  • Growth in free cash flow
  • Stable or growing dividends
  • Share buybacks or debt reduction

Over the last 40+ years, the annual compound return of stocks with growing dividends have outperformed dividend cutters on the S&P 500 by more than 4%.

Preparing for Your Future

Maximizing the benefit from new income opportunities can take time. For this reason, it’s important to consider potential portfolio changes now, so that these strategies can play out in the lead up to retirement years.

It may be tempting to stick with the status quo—both in daily routines and investment strategies—but those who proactively adjust their approach will be able to maximize their potential.

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