ICT R&D Policies: An International Perspective

76 Published by the IEEE Computer Society 1089-7801/10/$26.00 © 2010 IEEE IEEE INTERNET COMPUTING I nformation and communication technology (ICT) is a crucial driver behind innovations in Internet computing and drives economic growth and citizens’ quality of life.1,2 In fact, ICT has accounted for 25 percent of US economic growth since 1995, despite constituting just 3 percent of US GDP (www.nap.edu/catalog. php?record_id=12174). Sustaining the breakneck pace of innovation in ICT requires high levels of R&D. Indeed, in terms of R&D expenditures, patents, and venture capital investments, the ICT sector exceeds all other industries by a large margin (www.oecd.org/sti/ito). For firms in ICT and non-ICT industries alike, ICT R&D drives a robust pipeline of next-generation products and services. For example, US government-funded ICT R&D led to development of the Arpanet — the precursor to the commercial Internet — and subsequent private sector ICT R&D into the Ethernet and wide-area networks led to development of companies such as Cisco and 3Com. Continued Internet-related ICT R&D contributed to development of the Mosaic Web browser, Web search algorithms, and enhanced Internet security protocols. For nations, maintaining high levels of ICT R&D sustains the health of their domestic ICT firms and ecosystems, contributes to development of new technologies and even entirely new industries, and supports the creation of numerous high-paying jobs. Here, we examine ICT R&D’s critical importance to economic growth, compare countries’ levels and rates of change in ICT R&D intensity (investment as a percentage of GDP), assess governments’ levels of ICT R&D funding, and analyze several policy issues pertaining to ICT R&D. We’ve found that, although the US clearly leads the world in aggregate ICT R&D investment, international competition for ICT R&D leadership has increased substantially, with nations such as Korea and Finland investing a greater percentage of their GDP than the US. This has led to US ICT R&D intensity falling considerably relative to its peers during the past decade. We’ve also found that China and India have significantly increased their levels of ICT R&D investment and that China has the world’s second fastest growth rate in business R&D expenditures.