itif.orgInnovationWars:HowChinaIsGainingontheUnitedStatesinCorporateR&DTRELYSALONGANDROBERTD.ATKINSONJULY2023ChinawantstodisplacetheUnitedStatesastheworld’sleadinginnovationeconomy.BusinessR&Dinadvanced,traded-sectorindustriesisakeyindicatorofitsprogress—anditiscatchinguprapidly.CongressandU.S.stategovernmentsshouldrespondbyboostingR&Dtaxincentives.KEYTAKEAWAYSU.S.headquarteredfirms’R&Dspendinginadvancedindustriesrosefrom80percentabovetheglobalaveragein2013tonearly100percentmorein2021.Chineseadvancedindustrieswentfrom80percentbelowtheglobalaverageto30percentbelow.Leavingoutsoftware,theyshouldcatchuptotheUnitedStatesby2034.In2013,U.S.advanced-tech...