Report: America’s economic competitors South Korea, Japan and Germany all devote a higher share of GDP to research and development, and both South Korea and China are increasing spending as a share of GDP at a faster rate than the United States
Klobuchar: I fought for and wanted a longer-term solution than the short-term tax extenders package, and I will continue to push to make permanent the research and development tax credit and keep America competitive in the global economy
WASHINGTON, D.C. – After Congress approved a short-term package extending the research and development (R&D) tax credit, U.S. Senator Amy Klobuchar, Senate Chair of the U.S. Congress Joint Economic Committee, today released a report highlighting the need for long-term investment in research and development to help spur innovation and economic growth. The report found that America’s economic competitors South Korea, Japan and Germany all devote a higher share of GDP to research and development, and both South Korea and China are increasing spending as a share of GDP at a faster rate than the United States. Klobuchar said she fought for and wanted a longer-term solution and called on Congress to make permanent the research and development tax credit and keep America competitive in the global economy.
“Minnesota has long been a national leader in innovation, providing a critical boost for our economy. However, as a nation the U.S. has lost some ground in recent years, and that’s simply unacceptable. To remain competitive in the global economy, we must rededicate ourselves to fostering research and development. While Congress passed a short-term extension of the critical research and development tax credit, I fought for and wanted a longer-term solution and will continue to push to make this provision permanent and keep America competitive,” said Klobuchar.
Klobuchar’s report highlighted:
- The United States (2.85 percent) ranks tenth in the world in R&D spending as a share of GDP. A decade ago, the U.S. ranked sixth.
- South Korea (4.03 percent), Japan (3.39 percent) and Germany (2.88 percent) are among the countries that devote a higher share of GDP to research and development, and both South Korea and China are increasing spending as a share of GDP at a faster rate than the United States.
- The manufacturing sector accounts for about 70 percent of all industry research and development spending, about two-thirds of which is in the computer and electronic products industry and the chemical industry.
- Minnesota is in the upper half of states in terms of total R&D spending as a share of state GDP (2.6 percent), ranking 17th nationally.
- Klobuchar’s report lays out a number of steps that should be taken to support investments in research and development and help the United States remain a world leader in innovation. The report urges Congress to make permanent the research and development tax credit that will expire at the end of 2014. Bolstering this credit and allowing new businesses to access it can further encourage private-sector research and development. The report also calls for robust, stable federal funding for R&D, reviewing regulations to cut unnecessary red tape that could harm innovation, and building a strong innovation workforce through STEM education and immigration reform.
- The full report can be found here.
- The Joint Economic Committee (JEC) is a bicameral Congressional Committee composed of ten members from each the Senate and the House of Representatives. There are ten Democrats and ten Republicans on the Committee. The main purpose of the JEC, which was established by the Employment Act of 1946, is to continually study matters relating to the U.S. economy. The Committee holds hearings, performs research and advises Members of Congress.
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