U.S. companies performed 18 percent of R&D outside the United States

Published 19 April 2017

U.S. companies spent $73 billion on research and development (R&D) performed outside the United States in 2013, according to a new reportby the National Science Foundation’s National Center for Science and Engineering Statistics.

The total represented 18 percent of U.S. companies’ total R&D performance. These same companies spent $323 billion on R&D performed within the United States in 2013.

The NSF says that almost 50 percent of the foreign R&D performance by U.S. companies was in Europe, largely in the United Kingdom and Germany. The Asia-Pacific region accounted for 31 percent of foreign R&D, with India and China making up the largest share. Outside of Europe and the Asia-Pacific region, foreign R&D performance was highest in Canada, Israel and Brazil.

Four industries accounted for 52 percent of foreign R&D performance by U.S. companies:

  • Software publishing, which was concentrated in the United Kingdom, India, Israel, and Canada.
  • Pharmaceuticals and medicines, which had higher concentrations of foreign R&D in Japan and Switzerland.
  • Semiconductor and other electronic components, which had high concentrations of foreign R&D in Singapore, Israel, India, and China.
  • Automobiles, bodies, trailers and parts, which had a high concentration of foreign R&D in Germany.

U.S. companies with 500 or more domestic employees performed most foreign R&D.

On the basis of cost per R&D employee, U.S. companies spent 77 percent more on R&D performed domestically than on R&D performed outside the United States.

Differences in spending per R&D employee between domestic and foreign R&D performance were most pronounced in the information and communications technologies industries, which includes manufacturing of computer and electronics products, software publishing and computer systems design.