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FLC Home > T2 Legislation & Policy > DC on Reports > U.S. Research & Development Investment

U.S. Research & Development Investment

National Science Foundation: Science and Engineering Indicators, 2008

Science and Engineering Indicators 2008 describes major developments in international and U.S. science and engineering characteristics. This document and its companion documents provide the best "one stop shop" for statistical and comparative information on the basic character and health of the U.S. S&T enterprise. The overarching conclusions in 2008 -- the S&T world continues to undergo rapid changes following trends that emerged in the late 1990s, "resulting in a shift in the epicenter of world S&T activities, led by China's emergence, toward several rapidly growing Asian economies." These shifts have produced variable impacts in the developed world, as China's emergence has been accompanied by the stagnation/decline of Japan and the E.U. in a number of S&T-related indicators. The U.S. continues to "hold its own, thanks, in part, to its large, mature, and diversified S&T system. But, it too, faces robust challenges affecting its education, workforce, R&D, and S&T systems that arise from the far-reaching and rapid world-wide changes."

A few selected U.S. highlights follow.

• The U.S. continues to invest the greatest absolute amount in R&D ($340 billion in current dollars), besting the other G-7 nations combined.
• The U.S. federal government continues to be the largest source of funding for basic research, funding nearly 60 percent while industry funds 17 percent (industry funds 83 percent of development with the federal government funding about 6 percent). The federal share of R&D funding overall is 28 percent.
• The number of degrees awarded in S&E by U.S. colleges and universities continues to grow (S&E research doctorate awards peaked in 2006 at 30,000, driven in large part by a growing number of doctorates awarded to non-U.S. citizens).
• The U.S. continues to be the leading source of 'triadic patent families (with 20,000 filings) (Note: a triadic patent family are those inventions where protection is sought in the world's three largest markets; the U.S. E.U. and Japan).
• In 2004, about 59 percent of public secondary schools in the U.S. reported vacancies in math teaching positions, with one-third indicating difficulty in filling them.
• The number of S&E B.S. degrees awarded to women and minorities has largely increased over the last two decades, but not in the physical sciences, math or engineering.
• The U.S. is second only to Japan among the G-7 in R&D intensity (R&D spending as a percentage of GDP). The U.S. spends about 2.6 percent (Japan is over 3.0 percent).

See also two companion publications; Digest of Key Science and Engineering Indicators and Research and Development: Essential Foundations for U.S. Competitiveness in a Global Economy.

State Science & Technology Institute/NSF: Federal Support for Academic R&D

Federal Support for Academic R&D by State, 1993-2006 uses NSF data to show "federally financed academic R&D totals for all 50 states and the District of Columbia for the years 1993-2006. Percentage-wise, Maine led all states with a 547.4 percent increase over the 14-year period. Montana and Hawaii also had increases of greater than 400 percent. The U.S. as a whole went from $11.8 billion in FY 1993 to $30 billion in FY 2006, a 155.6 percent increase … For the third year in a row, the top 11 states receiving federal support for R&D conducted by their academic institutions remained unchanged…. They include California, New York, Maryland, Texas, Pennsylvania, Massachusetts, Illinois, North Carolina, Ohio, Michigan and Florida, respectively."

Federal R&D Funding by Budget Function: FY 2006 - 2008 (NSF 07-332) contains "information on Federal funding of the research and development and R&D plant components of the U.S. Federal Agency programs, as proposed by the Administration for FY 2008 … Detailed data are included on preliminary estimates of federal funding of R&D for FY 2007. This report also included detailed data (by sub function) on actual budget authorizations of R&D by federal agencies for FY 2006 and aggregate data (by broad function) on actual R&D budget authorizations in FY 2005 and earlier years."

National Science Foundation: Federal Funds for Research and Development

Federal Fund for Research and Development: 2004-2006 (NSF 07-323) provides a breakdown of federal R&D obligations by R&D and R&D plant for federal agency, type of performer, character of work, field of science and engineering, and geography -- estimates for 2005 and 2006 obligations are included for most statistical tables, with the exception of geographic distribution of funds. See also Federal R&D Spending by State, Per Capita: 2000-2004, developed by SSTI and based on this report, which presents "federal R&D obligations by state on a per capita basis for the five-year period, 2000-2004. California tops the list in real dollars at just over $19 billion but falls to 10th overall on a per-capita basis."

May 2007

National Science Foundation: State Science and Engineering Profiles, 2003-2005

State Science and Engineering Profiles, 2003-2005 (NSF 07-322) includes statistics such as S&E doctorate awards; federal, industry and academic R&D spending, SBIR awards among other characteristics.

National Science Foundation: Total R&D Expenditures (2006 Projected)

Info Brief NSF 07-317 projects that "[C]urrent-dollar R&D conducted in the United States increased 6.0%, or $19.3 billion, in 2006 to a level of $342.9 billion … [compared to 2005, where] current-dollar R&D had increased 7.8%, or $23.5 billion, to $323.5 billion … R&D performed by federal agencies and in federally funded research and development centers (FFRDCs) declined in 2006. R&D performed by universities and colleges and by nonprofit institutions both increased … The largest sources of funding for R&D are the business sector and federal government. Together these two sectors funded 93.2% of the R&D performed in the United States in 2006. Real R&D funding from the business sector increased 4.9% in 2006, whereas real R&D funding from the federal government did not change significantly. The federal government's share of the nation's R&D funding peaked in 1964 at 66.8%. In 2006 it funded 28.2% of U.S. R&D. However, the federal government remains the primary source of funding for R&D performed at U.S. colleges and universities, funding 63.6% of academic R&D in 2006."

National Science Foundation: Federal Funding for Academic S&E

Federal Science and Engineering Support to Universities, Colleges and Non-Profits, 2004 provides statistical data on the "level, distribution and characteristics of federal academic support" to institutions of higher education. The federal government distributed $23.8 billion in R&D obligations to universities and colleges in fiscal year 2004, a 4.4 percent increase from the FY 2003 total of $22.8 billion. SSTI has prepared a table using the NSF data that "shows the state rankings for total federal academic R&D obligations and percent change over the five-year period of 2000-2004. Nationally, federal R&D obligations grew by 37.7 percent over the period but some states saw much larger changes. Among these states, Hawaii showed the largest increase in federal R&D obligations at 108.3 percent, followed by Nebraska (85.2 percent), North Dakota (81.5 percent), Tennessee (73.9 percent) and Kentucky (60.9 percent). In total dollar amount, California led the nation with $3.46 billion in federal R&D obligations in 2004. Along with California, five other states received more than $1 billion in federal R&D obligations: New York, Pennsylvania, Maryland, Texas and Massachusetts."

February 2007

National Science Foundation: Industry Funding for Academic R&D

Industrial Funding of Academic R&D Rebounds in FY 2005 highlights that "Industrial funding for research and development in academic science and engineering (S&E) fields rebounded from a 3-year decline and grew by 7.7%, reaching an all-time high of $2.3 billion in FY 2005 … This increase was enough to stabilize the corresponding decline in industry's share of total academic R&D funding, which had dropped from a high of 7.4% in FY 1999 to 4.9% in FY 2004 … Overall, universities and colleges reported R&D expenditures of $45.8 billion in FY 2005, 5.8% more than in the previous year ($43.2 billion). This total represents an increase of 52.1% over the $30.1 billion reported in FY 2000. When adjusted for inflation, academic R&D rose 3.0% in FY 2005 … Federal funding of academic R&D reached $29.2 billion in FY 2005 and maintained its 64% share of total academic R&D support. Federally financed R&D grew by a relatively modest 5.6% in FY 2005, ending the trend of annual double-digit growth in recent years (13.7% in FY 2002, 13.2% in FY 2003, and 11.6% in FY 2004."

National Science Foundation/Bureau of Economic Analysis: Counting R&D Investment in U.S. Economic Statistics

R&D Satellite Account - Preliminary Estimates highlights that the percentage of the growth of U.S. gross domestic product (GDP) accounted for by investment in R&D has increased from 4.5 percent between 1959 and 2002 to 6.5 % in recent years. These statistics are a result of a recent effort to chart how intangible assets, such as research and development, which are not normally used in GDP calculations, affect economic growth. According to the NSF press release, "[S]ome 40 percent of the nation's productivity and growth is unaccounted for in the gross domestic product (GDP) … mainly because reliable data in some economic sectors simply don't exist." As a result, the growth and value of R&D in the U.S economy is greatly underestimated. With NSF assistance, R&D expenditure data were collected and then used to create separate estimates to calculate these economic measurements. This recent research is part of an ongoing econometric analysis, and R&D values may not be officially incorporated into GDP calculations until 2013.

September 2006

National Science Foundation: National Patterns of R&D

National Patterns of R&D Resources: 2004 Data Update (NSF 06-327) describes and "analyzes current patterns of research and development (R&D) in the United States, in relation to the historical record and the reported R&D levels of other industrialized countries." Some statistics calculated from the tables indicate the following patterns of R&D sourcing and performing (for 2004, all percentages rounded):

March - June 2006

National Science Foundation: Federal S&E Funding to Academia, and R&D Funding by Function

Federal S&E Support to Universities, Colleges, and NPOs: FY 2003 (NSF 06-309): provides statistical tables covering "all categories of direct federal S&E support for S&E activities for institutions of higher education …". This follows an earlier "NSF Info Brief" from August 2005 on the same subject that noted "… federal agencies obligated a new high of $26.7 billion to higher education institutions for academic S&E activities in FY 2003, an increase of $2.2 billion (9 percent in current dollars) over FY 2002 levels. This increase follows a 9 percent current-dollar increase (nearly 7 percent in constant dollars) in total federal academic S&E support between FY 2001 and FY 2002."

Federal R&D Funding by Budget Function: FYs 2004-06 (NSF-06-317): provides tables reflecting federal funding (budget authority, with noted exceptions) of the R&D and R&D plant components of agency programs as proposed by the administration for FY 2006.

February 2006

National Science Foundation: Report on S&E Indicators

Science and Engineering Indicators 2006 highlights "major U.S. and international science and technology (S&T) developments." This is one of the best 'one stop shops' for understanding the general 'state of the US R&D Enterprise', particularly in comparison to other economies. As stated, "The globalization of R&D, S&T, and S&E labor markets continues. Countries seek competitive advantage by building indigenous S&T infrastructure, attracting foreign investments, and importing foreign talent. The location of S&E employment is becoming more internationally diverse and those who are employed in S&E have become more internationally mobile." An S&EI companion piece, America's Pressing Challenge - Building a Stronger Foundation, highlights specific STEM educational challenges the US faces in maintaining it technological leadership (tying in directly with the discussion and legislation on US technological competitiveness). Their findings and conclusions are consistent with the continued dialogue in DC and around the country on the comparatively poor showing of U.S. students in STEM subjects. (See April/May 2006 DC on T2)