US Invents; China, Japan Put it Into Better Use Through More Investment on Later Stages of R&D
Yicai Global
/SOURCE : Yicai
US Invents; China, Japan Put it Into Better Use Through More Investment on Later Stages of R&D

(Yicai Global) April 18 -- Although the United States ranks first in the world in terms of research and development (R&D) investment - USD500 billion in 2015, China's investment in the later stages of the R&D - converting the results of research and development into commercial products - has quietly surpassed the United States a few years ago, shows a new study by the Boston Consulting Group (BCG).

The Boston Consulting Group estimates that China's investment in key later stage R&D will reach USD658 billion by 2018, twice that of the United States, by the current rate of investment, CNBC reported.

In other words, the United States invents new technologies, and other countries such as China and Japan are benefiting from translating these ideas and technologies into commercial products, said the report issued yesterday.

Other countries are benefiting from the R&D investment by the US. This situation has made serious impact on the US economy, causing it tens of billions of dollars per year in lost manufacturing output and hundreds of thousands of factory jobs over the past 10 years, the report claimed.

It cited emerging commercial unmanned aerial vehicle market as a typical example. The US military in developed UAV technology for reconnaissance and other purposes during the last century, and added microchips and more durable batteries. But the real realization of UAV commercialization is China's DJI Innovation and Technology Co. The Chinese company improved UAV technology, enabling unmanned vehicles to better avoid obstacles. It has even become the world's largest commercial UAV manufacturer. The company sells its products to US real estate and construction companies for aerial photography and cartography.

The US also invented a series of other breakthrough technologies, including flat panel displays, digital mobile phones, laptops and solar panels. However, these products have been improved and put into better use by other countries, especially China and Japan, the report stressed.

The United States is still the global leader in both the basic and application research and development. Of the USD500 billion invested in R&D in the US, about one third is spent in this area, while two thirds are used for later stage development. While China's investment in later stage R&D accounted for 84 percent of the total investment. This represents a 20 percent annual increase for China over the past 10 years, while that of the US amounted to only 5 percent.

BCG's research concludes that the US is likely to reverse this trend through better cooperation between private firms, universities and R&D alliances. This, it says, will increase US manufacturing output by 5 percent per year, or USD100 billion, adding 700,000 factory jobs plus 1.9 million jobs in other areas through the chain effect.

Follow Yicai Global on
Keywords: China , US , Business , TECHNOLOGY