Executive Summary

Key takeaways:

  • Knowledge- and technology-intensive (KTI) industries produced $11.1 trillion globally in value added in 2022, a 5.6% increase from 2021 in current U.S. dollars compared with a 15.8% post-pandemic rebound from 2020 to 2021 in current U.S. dollars.
  • KTI industries account for about a 10th of U.S. gross domestic product (GDP). Most KTI industry output is in the manufacturing sector, and the U.S. economy is relatively more services oriented.
  • The United States, China, the European Union (EU-27), Japan, and South Korea accounted for about 80% of global KTI value added in 2022. In that year, China and the United States were the top two producers of KTI output ($3.0 trillion and $2.9 trillion, respectively), each representing over a quarter of global KTI value added, followed by the EU-27, with a 17.0% share ($1.9 trillion).
  • The United States had the largest 2022 global shares of value added in two KTI manufacturing industries—air and spacecraft (57%) and medical and dental instruments (37%)—and was on par with China in pharmaceuticals and in weapons and ammunition manufacturing. China had the largest shares in the other six KTI manufacturing industries: computer, electronic, and optical products (including semiconductors); electrical equipment; railroad, military vehicles, and other transport equipment not elsewhere classified (nec); machinery and equipment nec; motor vehicles, trailers, and semi-trailers; and chemicals and chemical products (excluding pharmaceuticals).
  • In 2022, the top six semiconductor-producing locations accounted for 89% of global semiconductor value added, and five of the top six were in East Asia. China alone accounted for almost a third (31.6%), followed by Taiwan (19.2%), the United States (18.1%), South Korea (11.8%), Singapore (4.5%), and Japan (3.9%).
  • Globally, KTI manufacturing industries exported $11.4 trillion in 2022 in current U.S. dollars, up 6.6% from 2021, following a decline of 5.1% in 2020 and a post-pandemic increase of 20.2% in 2021. China has been the leading KTI manufacturing exporter country since 2008.
  • In 2021, the United States exported $193 billion in KTI-related services, with $91 billion in imports, for a trade surplus of $102 billion in these services.
  • Global supply chains mean that exports from a given country often include value from domestic production and from imported inputs. For the United States, the share of domestic content in its gross exports across all industries is much larger than the share of foreign content, fluctuating between 84% and 90% since 2007.

Supply chains for production of goods and services and for technology development that were built over the last decades have been impacted by recent macroeconomic, geopolitical, and pandemic-related headwinds. KTI industries—or research and development (R&D)-intensive industries, defined in more detail below—are an important source for R&D and other intangibles and are a contributor to economic competitiveness and public policy goals across countries. Multinational enterprises (MNEs) and other firms in these industries participate in trade, investment, and other global value chain activities supporting national economic growth and innovation outcomes.

This report focuses on trends in output and international trade by KTI industries, including new analysis of global semiconductor production and the composition of U.S. KTI-related services. Output is measured as value added, defined as the value of goods and services minus the cost of intermediate inputs. Together, KTI output and trade patterns provide context for R&D and innovation trends across economic sectors covered in other Science and Engineering Indicators 2024 reports.