American share of global research spending falls

American share of worldwide research spending fell to 45% in 2012, from 51% in 2007, while Japan’s and China’s grew, researchers from the University of Michigan Health System as well as economists from other fields, reported in the New England Journal of Medicine.

During the 2007-2012 period, research and development (R&D) spending in the US declined from $131 billion to $119 billion. During the same period R&D spending in Japan rose by $9 billion and by $6.4 billion in China.

While Europe’s share of global R&D spending held steady at 29%, Asia’s increased from 18% to 24%.

The authors of the report found that America’s share of global research expenditure was once 80%.

Research spending linked to job creation

Study author Reshma Jagsi, M.D., D.Phil., associate professor of radiation oncology at the University of Michigan Health System, said:

“The United States has long been a world leader in driving research and development in the biomedical science. It’s important to maintain that leadership role because biomedical research has a number of long term downstream economic benefits, especially around job creation.”

Most of the decline in the US has been driven by reduced investment from industry, and not the public sector, despite funding reductions from the National Institutes of Health (NIH).

With fewer regulations and cheaper labor costs, research in Asia has become an increasingly more attractive option for scientists. The authors added that Asian governments tend to be less bureaucratic that the USA’s.

Co-author, Justin Chakma, a venture capital investor with Thomas, McNerney & Partners in La Jolla, California, said:

“We were surprised the impact of industry funding was that dramatic, but it’s key to note that government funding is equally important to maintain or grow. Research funded through the National Institutes of Health helps scientists understand how diseases work – this will happen slower as NIH funding continues to be cut.”

Approximately half of all medications approved by the US Food and Drug Administration (FDA) had received some type of federal government funding during the course of research and development.

The authors, who described the US’ poorly coordinated national biomedical R&D strategy as “disappointing”, warn that there is a critical need for greater NIH funding as well as incentives for industry to invest more in R&D.