What is the actual return on R&D investment?

It is often common to look at the expenditure on R&D to compare how different countries are doing in terms of innovation. But, what about the outputs from this activity? Which countries are more efficient in terms of R&D investment? Which countries have better return of investment (ROI) in R&D?

To provide a comparative overview on the ROI, specific data on 3 key R&D outcomes has been gathered for the top-10 most innovative economies according to the Global Innovation Index or GII (Cornell University, INSEAD, & WIPO, 2017), and compared to Spain. In particular, the following outputs has been selected:

  • Number of scientific and technical journal articles published (NSF, 2013).
  • Number of patents measured as PCT applications filled by country of origin, considering de sum of resident and nonresident applications (WIPO, 2016).
  • Income received from use of intellectual property (IP), a new indicator which provides insights on the balance of payments according to the International Monetary Fund (IMF, 2015)

The data above has been related to the gross domestic expenditure in R&D for each country, which was reviewed on my previous post Research expenditure by top innovators. As a result (see the figure below), specific ROI measures have been calculated as: number of scientific and journal publications per 1000 USD invested, number of patent applications per 1000 USD invested, and income generated from IP exploitation per 1000 USD in invested.

Return on R&D investment in 2017 for the most innovative economies in the world in comparison to Spain. Prepared by Francisco Velasco ( Source: Selected data from NSF (2013), WIPO (2015) and IFM (2015).

Besides any arguable lack of scientific groundings from this approach (as it relates indicators that are not directly correlated and uses data from different sources and years), the model provides a very useful comparative overview across countries ina visual and intuitive manner. As per the figure above, the return of R&D investment in terms of scientific production places USA (265 articles per $1000 invested) as the most efficient country, followed by UK (139 articles per $1000 invested) and Spain (125,6 articles per $1000 invested). However, the ROI in terms of patent production placed also USA in the first position (378,6 patents per $1000 invested), followed by Ireland (49,5 patents per $1000 invested) and UK (32,6 patents per $1000 invested). Finally, the outputs in terms of direct income from IP exploitation, which is a very interesting indicator being recently collected, highlighted again USA as the country with greatest ROI ($78,5 per $1000 invested), followed by UK ($23,3 per $1000 invested) and Netherlands ($41,2 per $1000 invested).



Cornell University, INSEAD, & WIPO. (2017). The Global Innovation Index 2017. (S. Dutta, B. Lanvin, & S. Wunsch-Vincent, Eds.) (10th ed.). Retrieved from

IMF. (2015). International Monetary Fund. Retrieved from

NSF. (2013). National Science Foundation. Retrieved from

WIPO. (2016). World Intellectual Property Organization.


IP theft or loss issues continue to rise as global fraud increases

82% of companies have suffered a fraud incident in 2016, a seven percentage point increase in comparison to 2015 according to the recently published Global Fraud and Risk Report (Kroll, 2016). The economic impact of losses resulting from this fraud has been estimated in 1-3% of total revenues for most (59%) of the companies surveyed.

The following figure summarises some key findings from the mentioned report:

Graphic representing the fraud incidents and security incidents resulting in theft or loss of IP, prepared by Francisco Velasco (

Regarding the Intellectual Property (IP) business, the figure shows that 16% of enterprises has experienced Intellectual Property (IP) theft, piracy or counterfeiting fraud in 2016, which means an alarming rise in comparison to a 4% in 2015. Furthermore, 38% of companies suffered a security incident resulting in theft or loss of IP in 2016, being the manufacturing sector the most affected with 56% of the reviewed companies being subject to such incidents in the same year.

These data suggest that there is a growing challenge for enterprises on managing and protecting their intellectual property and confidential information, in order to gain (or not loose) competitive advantage. This challenge that is particularly pronounced due to the effects of global competition (the companies that lead the market are more familiar with intangible management), increased supply chains (longer supply chains make more difficult to trace the flow and use of confidential and protected information), growing hire of external consultants (external experts are more often required and and, and this represents a potential leak of information) is a common, use of open ICT systems (vulnerability toand increased job mobility.

To address this great global challenge, it is highly recommended that companies take urgent measures on conducting IP and trade secrets audits by qualified experts, to identify all intangible assets and determine which ones shall be protected and how. Such processes shall be followed by the implementation of a risk mitigation plan that enables: reconfiguring clauses in contracts with employees, customers and suppliers, defining an information access structures and protocols, prioritising and qualifying intangible assets, making an economic valuation of critical IP, implementing cyber security measures to protect computer and online systems from theft or damage, and other contingency actions to be determined depending on the type and situation of the company.



Kroll. (2016). Global Fraud & Risk Report: Building Resilience in a Volatile World. New York, USA. Retrieved from