Innovation gaps

Global R&D intensity is rising, but in an unevenly manner. Leaders such as Israel and Korea are spending between 5% and 7% of their GDP on research, far ahead of the OECD average near 3%. The US, Japan and parts of Northern Europe cluster just above that mid-range, while Southern Europe and others lag closer to 1-2%. These differences often reflect industry structure and policy. Economies with strong technology sectors, deep capital markets, and targeted incentives – think semiconductors, biotech and defense – consistently invest more. Smaller, export-oriented countries also use R&D as a competitive lever. Sustained R&D spending fuels productivity, supports higher-value industries, and ultimately lifts GDP growth over time.

Source: OECD, 2026.