Research and development intensity
Also called: R&D intensity, GERD to GDP ratio · Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Beyond NCERT
Meaning
Research and development intensity shows how much a country spends on research compared with the size of its economy. The formula is:
R&D intensity = (Gross expenditure on R&D, GERD ÷ GDP) × 100
GERD is total R&D spending by government, business and universities. A higher ratio signals a stronger innovation effort. The same idea can be applied to a single firm, using its sales in place of GDP.
Example
India's R&D intensity is about 0.65% of GDP. China's is about 2.4%, the US's about 3.5% and South Korea's about 5%. Private firms fund only about 36–40% of India's R&D, which is low. New measures such as the ANRF Act 2023 aim to raise R&D spending.
Don't confuse with
- Global Innovation Index: the GII is a combined ranking built from many inputs and outputs. R&D intensity is a single spending ratio.
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