Fact of the Week: Among G-20 Economies, a One Percentage Point Increase in Public R&D Investment as a Share of GDP Corresponds to a 10 Percent Increase in Economic Growth

March 22, 2017

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Public investments in research and development play a foundational role in underpinning a country’s economic growth. By investing in basic and applied research, governments provide the building blocks for technological advancements and innovative products. R&D investment data from the world’s 20 largest economies demonstrates this important linkage.

The G-20 make up 77 percent of global GDP and 90 percent of global R&D. Between 2000 and 2010, the governments of these economies invested between 0.04 percent and 1.76 percent of their GDPs in R&D, or an average of 0.77 percent. As described in a discussion paper from the University of Augsburg, which analyzed innovation in the G-20 economies, a 1 percentage point increase in public R&D investments as a share of GDP corresponds to a 9.57 percent increase in economic growth.

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Among G-20 Economies, a One Percentage Point Increase in Public R&D Investment as a Share of GDP Corresponds to a 10 Percent Increase in Economic Growth