South Korea Maintains 'World No. 2' Position in R&D Spending as Percentage of GDP Over the Past Decade
[Asia Economy Reporter Seulgina Jo] According to the annual ranking of research and development (R&D) expenditure as a percentage of Gross Domestic Product (GDP) published by the Organisation for Economic Co-operation and Development (OECD), South Korea has maintained the world’s second place over the past decade, following Israel. Due to the revision of the base year for the national accounts by the Bank of Korea, the adjusted values have been reflected in the OECD statistics, resulting in South Korea ranking second instead of first in 2013, 2014, and 2017, years in which it was originally ranked first.
On the 12th, the Ministry of Science and ICT announced that the OECD revised South Korea’s annual R&D expenditure as a percentage of GDP in the 'MSTI (Main Science and Technology Indicators) 2019-2' report released at the end of last month. As a result, the R&D expenditure ratio to GDP was adjusted downward by 0.4 to 0.26 percentage points compared to previous figures. For 2018, the R&D expenditure ratio decreased from 4.81% to 4.53% after applying the revised standards.
This adjustment reflects the changes in major indicators such as GDP following the revision of the base year for national accounts from 2010 to 2015, conducted by the Bank of Korea at the end of last year. The revision of the base year for national accounts is a statistical compilation procedure carried out every five years by the Bank of Korea to ensure accurate statistical calculations.
Until now, South Korea and Israel have competed for first and second place in the ranking of R&D expenditure as a percentage of GDP. However, the revised statistics confirm that South Korea has maintained second place over the past decade. The years 2013, 2014, and 2017, in which South Korea was previously ranked first, have all shifted to second place in the revised data.
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In 2013, South Korea’s R&D expenditure ratio was 4.15%, but in the newly released revised statistics, it was 3.95%, falling short of Israel’s 4.09% in the same year. Similarly, in 2014 and 2017, the ratios were adjusted downward from 4.29% to 4.08% and from 4.55% to 4.29%, respectively, resulting in a drop to second place.
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