Evolving Workforces

Global Tech Talent Linked to R&D Spending

May 11, 2021

By Colin Yasukochi

line graph overlaying map

Many companies are globalizing their tech workforces to meet growing needs for innovation. Although not ideal, remote work and distributed teams have proven viable during the pandemic, allowing companies to tap into local talent sources globally. Research and development (R&D) investments by governments, the private sector and educational institutions are directly linked to business innovation and job creation.

The U.S. is the global leader in technological innovation and home to the five most valuable tech companies in the world by market capitalization. However, China is quickly gaining ground, based on its growing amount of R&D investment. China increased R&D spending by a factor of 13 between 2000 and 2019 to a level that’s approaching the U.S., according to the OECD. Japan, Germany and Korea had the next highest amounts of R&D spending. As a percentage of gross domestic product or the size of an economy, R&D spending was highest in Israel, Korea and Taiwan.

While R&D spending is an important indicator of technological leadership, talent production from higher education institutions may be even more important. Countries with the most STEM graduates in 2018 were India (2.68 million), the U.S. (698,734) and Russia (497,243), according to UNESCO. China’s figures were not reported by UNESCO, but China’s Ministry of Education self-reported 2.94 million STEM graduates in 2018.

While a higher growth rate of STEM graduates is expected in China and India, the U.S. appears to have a better quality of higher education with six of the 10 and 35 of the 100 best universities for computer science worldwide, according to U.S. News & World Report. Greater China, including Hong Kong, had 23 of the 100 best universities, suggesting a growing number of higher-quality graduates. Singapore had two in the top 10, while Switzerland had one.

Gross Domestic Expenditures on Research & Development by Country

Billions of U.S. Dollars*

Gross Domestic Expenditures on Research & Development

Top 10 Countries in 2019 by Spending Amount and % of GDP

*Using current purchasing power parity rates
**Top 10 includes countries with minimum of $15 billion in R&D spending
Source: Organization for Economic Cooperation and Development (OECD) Gross Domestic R&D and CBRE Tech Insights Center (2021)

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