The United States is far and away the world leader in R&D spending. In 2019, the U.S. spent $612.7 billion on R&D, more than any other country. We spent 19 percent more than China, four times more than Japan, five times more than Germany, and six times more than South Korea.
That’s great for U.S. universities and research institutions. But, when the time comes to turn new discoveries into marketable products, our manufacturing sector rarely gets to enjoy the fruits of all that R&D spending. One reason why is that there are few financing options to help build manufacturing capacity. Small- and midsized companies struggle to borrow the millions of dollars necessary to finance a new factory, especially if those loans take 10 or 20 years to pay out. Venture capital firms are more preoccupied with funding the next Facebook than the next Ford, and the big national banks aren’t too keen on funding projects with long time horizons. As a result, many U.S. manufacturers look overseas to make “the next big thing.”