OECD overall R&D growth stable; government R&D budgets decline and reorient towards defence in IMF/OECD News 01/04/2026 Growth in R&D investment remained stable across the OECD in 2024, accompanied by tightening public budgets for R&D and a growing emphasis on defence, according to the latest estimates published in the OECD Main Science and Technology Indicators. Growth in inflation-adjusted expenditure on Research and Experimental Development (GERD) in the OECD area remained at 2.6% in 2024, unchanged from 2023. R&D expenditure rose in the United States by 3.4%, while growth in the European Union stood at 0.4%. Germany, its largest economy, recorded a 0.4% decline. In contrast, Japan, Korea and Türkiye reported growth rates of over 5%. The business sector continued to account for the largest share of OECD R&D expenditure with 73% of total GERD, up from 67% in 2010 but unchanged since 2023. Growth rates in R&D spending across different sectors have converged after more than a decade in which R&D growth in the business sector significantly outpaced other sectors. While R&D expenditure in government organisations has recently grown by over 3%, this has not been sufficient to reverse its long-term decline in relative importance. Growth in higher education R&D stood at close to 2%. The United States and China reach the one-trillion-dollar R&D milestone in 2024 The United States and the People’s Republic of China (thereafter “China”) consolidated their position as the world’s largest economies in terms of R&D expenditure, widening the gap with others. R&D spending comparisons that account for differences in purchasing power parity (PPP) indicate that China’s GERD caught up with and even surpassed the United States in 2024, at USD 0.86 trillion in terms of PPP-adjusted dollars of 2020, the benchmark year for National Accounts. This implies that expressed in 2024 prices, both China and the United States reached the 1 USD trillion mark. The latest estimates suggest that global R&D expenditure may have reached USD 3.8 trillion in 2024. OECD countries account for almost two-thirds (USD 2.3 trillion), with the United States contributing 1 USD trillion, the European Union USD 0.6 trillion, and the remaining USD 0.7 trillion accounted for by other OECD economies. According to the latest available estimates from OECD for 2024 and UNESCO (projections from 2023), non-OECD economies other than China, such as Brazil and India, would account for close to USD 0.4 trillion. Understanding international comparisons of R&D expenditure based on purchasing power (PPP) and average annual exchange rates (EXR) While PPP-based comparisons are generally preferred for international comparisons, given the volatility of currency markets and related factors, data users should note that available PPPs are designed for GDP and not R&D and may be significantly revised in future PPP benchmarking exercises. Comparisons between the United States and China in EXR-adjusted terms indicate that China’s R&D was about 50% that of the United States in 2024, up from 44% in 2014 and 8% in 2004. Using the 2020 base year PPPs as reference is equivalent to assuming that 4 yuan purchase the same volume of R&D inputs in China as 1 dollar in the United States, instead of 6 as implied by the exchange rate or 3.5 as per latest PPP estimate, would place China at approximately 90-95% of US’s R&D in 2024 rather than 102% with the 2024 PPP ratio. Comparisons between the United States and the Europ