U.S. public R&D may generate as much productivity abroad as at home
A new estimate across 69 economies finds the largest spillovers from nondefense research, especially in non-OECD countries.
Researchers tracked shocks to U.S. research appropriations and productivity in 69 foreign economies from 1980 through 2019. Their estimate: a spending shock equal to 1% of the federal R&D capital stock raises foreign total-factor productivity by about 1% after 12 years. The response comes mostly from nondefense research and is concentrated in non-OECD economies.
What that means
The authors’ back-of-the-envelope calculation says global returns to U.S. public nondefense R&D are about twice the domestic returns—so the United States captures roughly half of the total productivity benefit. They point to open scientific knowledge, trade in capital goods and technological leapfrogging as likely channels. This is a working paper, not a peer-reviewed result, and the 50–50 split is an estimate built on the paper’s causal model rather than a direct accounting of gains.