China Is Outpacing US R&D Spending; New Report Urges Congress to Fully Fund NSF TIP Directorate to Make America More Competitive
WASHINGTON—China’s investment in research and development grew nearly twice as fast as U.S. R&D spending from 2019 to 2023 and has now likely overtaken the U.S. total based on projections. To avoid losing the techno-economic war with China, a new report from the Information Technology and Innovation Foundation (ITIF) urges Congress to fully fund the National Science Foundation’s Technology, Innovation, and Partnership (TIP) program with at least $1 billion for this fiscal year.
“Given China’s massive investment in advanced technologies, the amount Congress has appropriated so far for the TIP program is just a drop in the bucket,” said ITIF President Robert D. Atkinson. “America can’t afford to let a key technological competitiveness program falter. Congress should fully fund TIP before it’s too late.”
Established in 2022, NSF’s TIP directorate is the most promising federal initiative to spur commercialization of use-inspired research on key technologies such as AI, quantum computing, and biotechnologies. But the program has received only a fraction of the funding it has been promised.
As part of the bipartisan CHIPS and Science Act, Congress authorized $20 billion for TIP in fiscal years 2023 through 2027—$4 billion per year—but lawmakers have appropriated just $410 million. This comes as China is far outpacing U.S. R&D spending:
- From 2019 to 2023, China’s R&D investment grew at 8.9 percent annually, compared to just 4.7 percent in the United States.
- And because R&D is cheaper in China, it is likely conducting more research overall. Adjusted for cost, China’s 2023 R&D spending was effectively $1.8 trillion—more than double the U.S. total of $823 billion.
To achieve its mission of spurring commercially relevant, use-inspired research, the TIP program requires every project it funds to have an industry partner, and all projects address technologies with immediate commercial and national security relevance.
ITIF’s report finds TIP’s model has already shown promise. Despite minimal appropriated resources, in just two years TIP has launched regional innovation programs, funded workforce development, improved U.S. competitiveness in two key technologies, and established partnerships with federal agencies and allies like India and Japan. Yet the program’s workforce has shrunk 45 percent since the start of the year due to cuts made by the Department of Government Efficiency and a hiring freeze.
“TIP has distinguished itself from legacy NSF directorates as a potential leading voice in U.S. technology commercialization,” said Meghan Ostertag, research assistant for economic policy at ITIF. “But with just 10 percent of its intended budget and a smaller team, it cannot deliver on its mandate. Further delays or cuts will stall promising initiatives and waste a rare bipartisan investment in America’s industrial future.”
With China racing forward in strategic technologies, ITIF’s report argues fully funding the TIP program can help close critical gaps in the U.S. innovation ecosystem, which has lacked a coordinated, cross-agency strategy.
Key recommendations from ITIF’s report:
- Boost TIP appropriations to $1 billion for FY 2025: Congress should fund TIP at $1 billion this year and increase funding by $1 billion annually until reaching or exceeding the full $4 billion authorized. The hiring freeze should be lifted, and staffing restored.
- Accelerate international research collaboration: The State Department should establish a list of pre-approved allied countries for scientific collaboration, reducing diplomatic delays and excluding adversarial nations like China.
- Conduct frequent reviews of TIP’s performance: The Government Accountability Office should evaluate TIP every two years and assess its alignment with its mission. TIP should also increase grant transparency with accessible, machine-readable data.
“America’s commitment to research is declining as the Trump administration is proposing deep cuts to science funding,” said Atkinson. “That will have long-term consequences for innovation and competitiveness. Congress recognized the importance of TIP in 2022. Now it’s time for Congress to fund the program in full.”
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The Information Technology and Innovation Foundation (ITIF) is an independent, nonprofit, nonpartisan research and educational institute focusing on the intersection of technological innovation and public policy. Recognized by its peers in the think tank community as the global center of excellence for science and technology policy, ITIF’s mission is to formulate and promote policy solutions that accelerate innovation and boost productivity to spur growth, opportunity, and progress.
