Economic crisis and weak outlook hit R&D

The OECD Science, Technology and Industry Outlook 2012 was published today. It is an interesting report for start-ups, because it provides information about the R&D spending of governments and companies and about the innovation systems of different countries.
 
The OECD Outloook says that business spending on R&D fell a record 4.5% in 2009 in the OECD. Only France and Korea bucked the trend. Spending by Asian economies, such as China, India and Korea, on the other hand continued to increase during the crisis. Year-on-year growth in R&D investment by firms in 2010 was 29.5% in China and 20.5% in Korea and India. 
 
The current weak economic recovery will likely lead to continued sluggish growth in R&D spending by firms, notably in Southern and Eastern Europe, in the foreseeable future. The outlook for France, Germany, the United Kingdom and the United States is also uncertain, according to the report.
 
Enterprise creation and venture capital investment have yet to return to pre-crisis levels, increasing unemployment and hurting innovation.
 
On the other hand some countries strengthened their support for public research institutions and educational programmes during the crises, including Australia, Canada, China, Italy, Switzerland and the United States. Estonia, Germany and Sweden boosted investment in existing programmes to support innovation.
 
The outlook for public spending on innovation varies widely across the OECD. Greece, Ireland, the Slovak Republic, Slovenia and Spain foresee a decrease in government spending on R&D in the coming years. France, the United Kingdom and the United States expect to maintain their current spending levels. Others, including Chile, Denmark, Germany and Turkey plan to boost spending in the short-term.

Low local demand and difficult financing may also accelerate the trend of companies relocating R&D and manufacturing abroad to take advantage of growing Asian markets.