Slight Dip in Japanese R&D Spending – Should it Matter?

The National Science Foundation Japan Office tracks Japanese research and development activity.  In a recent report it noted a slight drop in R&D expenditure for the Japanese fiscal year 2008 (H/T State Science and Technology Institute).  The overall R&D spending decline between 2007 and 2008 is 143.7 billion yen, or a 0.8 percent decrease.  Digging further into the report you can tell that the decline is predominantly in industrially performed research as well as the D in R&D.  Given the recent economic downturn, this is not a particular surprise.

Of note is that while R&D spending declined from 2007 to 2008, R&D intensity – the percentage of Gross National Product spent on R&D – increased.  A decline in Gross National Product helped boost that intensity number.  But it raises for me a useful point.  The intensity number is considered an important metric in discussions of economic competitiveness, and boosting the U.S. R&D intensity figure to 3 percent is a stated goal of the Obama Administration.

But if the intensity figure can go up in a down economy, how meaningful is it?  It can make for an easy to measure benchmark, and it hides a lot of inter-country differences.  Is the value of this metric more in show than in substance?  I’m leaning toward the less-than-useful feel-good benchmark.  I’m open to learning why that might be wrong.

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One thought on “Slight Dip in Japanese R&D Spending – Should it Matter?

  1. I would agree that the metric is more show than substance. At the AAAS meeting, Kei Kozumi said they picked 3% because it was a nice, round number that’s pretty close to the current level of 2.79%. So there’s a reasonable expectation that we can reach it. I like that Kei also pointed out that there is no correct number and that in the end it’s simply a political decision.

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