U.S. R&D expenditures account for about 31% of the worldwide total. The combined R&D expenditures of 10 Asian economies rose steadily to reach U.S. levels in 2009, driven mostly by China.

U.S. R&D expenditures account for about 31% of the worldwide total, down from 38% a decade earlier. The combined R&D expenditures of 10 Asian economies rose steadily to reach U.S. levels in 2009, driven mostly by China, now the second largest R&D performing nation.

This statistic reminds us that China and other countries are not merely the world's factories, churning out a variety of mostly consumer goods. As ITIF has long warned, the United States can longer assume that its competitive edge can be sustained because of our focus on high-skill, valued-added activities. The United States has been cutting back on R&D at a time when emerging economic powers are doing the just opposite. In addition, the more we shift manufacturing overseas, the more likely that R&D will follow, thus eroding out industrial capacity.