U.S. R&D Leadership Eroding as China Closes Gap in Key Sectors

Описание: I've examined new data showing the United States still leads in private sector R&D investment, but that advantage is disappearing sector by sector. The numbers are clear and concerning.

From 2014 to 2024, U.S. firms increased R&D spending by 150 percent, reaching $675 billion across nine advanced sectors. Impressive, until you see China's 537 percent increase to $165 billion over the same period. When you adjust for wage differences—Chinese R&D workers cost less—China's real share jumps from 9 percent to 25 percent of global advanced-sector R&D. More troubling: in four of nine sectors, Chinese firms now invest more than American firms do when you control for economic size. These include industrial engineering, electronics, general industrials, and automobiles. The U.S. maintains dominance in software and pharmaceuticals, but excluding those two sectors, Chinese firms have actually surpassed U.S. investment levels on a wage-adjusted, size-adjusted basis.

This matters because R&D investment determines who leads in productivity, wages, and industrial capacity. Lose that lead, and you lose high-skill jobs, supply chain resilience, and strategic independence. I walk through the data sector by sector, explain what's driving the shift, and discuss what policy responses make sense. This is fact-based analysis, not speculation. The report comes from the Information Technology and Innovation Foundation and uses the EU R&D Industrial Scoreboard, which tracks 90 percent of global private sector R&D.

I've spent decades studying competitive advantage, and this pattern is both predictable and preventable. Whether it gets fixed depends on choices we make now. If you value careful, logical breakdowns of economic trends without hype, this channel is for you. Subscribe for updates, and join the discussion in the comments with respect and substance.

TIMEMAPS

00:00 Opening: The leadership principle being violated
02:15 The headline numbers: U.S. vs China R&D growth
04:45 Wage adjustments reveal larger Chinese gains
07:10 Software and computer services: U.S. dominance holds
09:30 Technology hardware: narrowing lead in semiconductors
12:00 General industrials: U.S. loses competitive edge
14:20 Industrial engineering: China surpasses U.S. investment
17:00 Electronics, autos, and other sectors where U.S. lags
20:30 Pharmaceuticals and aerospace: remaining U.S. strengths
23:15 What's driving China's surge: subsidies and IP theft
26:45 Why the rest of the world is stagnating
29:30 Policy recommendations and strategic implications
33:00 Extended explanation: productivity, wages, geopolitics
37:15 Closing thoughts: slow-motion mistake, solvable problem
40:00 Question for viewers: what would you prioritize?

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