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.