The landscape for technology and knowledge has become increasingly global. While research and development (R&D) investments are still heavily concentrated in OECD countries, non-OECD economies account for a growing share of the world’s R&D. In 2007, non-OECD countries for which data are available (see box) accounted for almost 16% of the business sector R&D expenditure (expressed in current USD purchasing power parity [PPP]) of OECD and non-OECD economies combined.

Business research and development (R&D) is financed by funds provided from within a country and from abroad. Foreign sources include other businesses, public institutions (government agencies or universities) or international organisations. According to the Frascati Manual, foreign-funded R&D includes, for example, R&D performed by foreign affiliates when funded by the parent company (located abroad), but it excludes R&D that is funded domestically.

Multinational firms play an important role in investments in research and development (R&D) across the world. While they fund a large share of cross-border investments and are as such important vehicles for the international transfer of technology, they are themselves important investors in R&D.

The internationalisation of knowledge and technology is also reflected in the increasing number of triadic patent families. In 2007, about 52 000 were filed worldwide compared to something less than 42 000 ten years earlier.

The technological activities of (multinational) firms have become increasingly internationalised. In the search for new technological competences, better adaptation to markets and lower research and development costs, companies are moving research activities overseas more intensively. The information contained in patents makes it possible to trace the internationalisation of technological activities and the circulation of knowledge among countries. In addition, collaboration with foreign partners increasingly plays an important role as firms gain access to a broader pool of resources and knowledge at lower cost and are able to share risks with partners.

The co-authorship of research publications provides a direct measure of collaboration in science. Indicators of co-authorship help to understand how knowledge is created among researchers and how collaboration in science is changing. Co-authorship may involve researchers in the same institution, in the same country, or in two or more countries.

The internationalisation of technology is also reflected in the technology balance of payments, since payments and receipts reflect to some extent crossborder trade in research and development (R&D) outcomes. The technology balance of payments measures disembodied international technology transfers: licence fees, patents, purchases and royalties paid, know-how, research and technical assistance. Unlike R&D expenditures, these are payments for production-ready technologies.

A country’s technological development can reflect the choice between domestic production of technology/inventions [via a high national research and development (R&D) effort] or absorption of foreign technology (via the acquisition of foreign technologies and the payment of licensing fees and royalties).

Knowledge-intensive goods have been among the most dynamic components of international trade over the last decade. A country’s ability to compete in hightechnology markets is therefore important to its overall competitiveness in the world economy.