Knowledge- and technology-intensive (KTI) industries are the predominant force behind our nation’s research and development (R&D) enterprise. These industries produce innovative products and technologies that support economic growth and are essential to address diverse societal challenges, including health, the environment, and national defense. From an economic standpoint, they constitute a modest but critical component of the national gross domestic product (GDP) and employ a sizable fraction of the U.S. science, technology, engineering, and mathematics (STEM) workforce.

This report defines KTI industries as those with the highest R&D intensities based on a taxonomy of economic activities developed by the Organisation for Economic Co-operation and Development (OECD).^{​For more information on the OECD’s methodology in identifying R&D intensive industries, see Technical Appendix and Galindo-Rueda and Verger (2016). In addition to R&D intensity, KTI industries may be defined using other measures, including high concentrations of workers in STEM occupations (e.g., Wolf and Terrell 2016) or high rates of patenting and innovation activities. However, we are not aware of internationally comparable data for defining KTI industries using these other measures.} This definition captures industries with the largest investments in R&D relative to their production. They consist of nine manufacturing industries—chemicals and chemical products; pharmaceuticals; computer, electronic, and optical products; electrical equipment; other machinery and equipment; motor vehicles, trailers, and semi-trailers; air and spacecraft and related machinery; railroad, military vehicles and other transport equipment; medical and dental instruments—and three services industries—information technology (IT) and other information services; software publishing; and scientific research and development.^{​Specifically, KTI industries are defined as those belonging to the high and medium-high R&D intensity groups (see Technical Appendix and Galindo-Rueda and Verger 2016). A detailed description of each of these industries is provided in the Glossary. The OECD taxonomy also includes the weapons and ammunition industry. This report, however, does not present data on weapons and ammunition, a relatively small industry whose value added accounts for less than 1% of global KTI value added. (See historical data for this industry in the Indicators 2020 edition of this report.)}

This report presents analyses on three areas related to KTI industries: production, trade, and enabling technologies. The first section analyzes domestic KTI production and comparative country data on global KTI production. It also presents new analysis on the composition of U.S. KTI employment by STEM workforce categories and the geographic distribution of U.S. KTI production. The second section analyzes global trends in KTI exports, primarily focusing on the foreign value-added content of exports as an indicator of a KTI industry’s reliance on foreign intermediate inputs. The third section analyzes data on artificial intelligence (AI) and biotechnology, two important technology areas that many KTI industries are either developing or using and that were critical in the response to the COVID-19 pandemic.

Other aspects relevant to KTI industries are covered in other Science and Engineering Indicators 2022 reports, including composition and employment trends of the STEM workforce (“The STEM Labor Force of Today: Scientists, Engineers, and Skilled Technical Workers”), business R&D performance and funding (forthcoming “Research and Development: U.S. Trends and International Comparisons”), and industry patenting and innovation activities (“Invention, Knowledge Transfer, and Innovation”). Together, these complementary reports provide a broad picture of the state of knowledge and technology creation, transfer, and adoption in the United States within a global context.