|Division of Science Resources Studies|
|DATA BRIEF||Directorate for
R&D as a Percent of GDP is Highest in Six Years
In 1998, Federal support for R&D is expected to grow slightly in real terms, but continue to shrink as a proportion of the Nation's funding total.
Almost no change is expected in total Federal R&D performance in 1997-98, but Federal basic research is expected to rise by 4 percent.
By current projections, total annual research and development (R&D) expenditures in the United States will be $220.6 billion in 1998-a 7.3-percent increase over the $205.6 billion estimated for 1997. In turn, the 1997 estimate represents a 4.9-percent increase over 1996, and the 1996 level was a 7.1-percent increase over 1995. In inflation-adjusted terms, R&D annual increases are 5.3 percent for 1998, 2.8 percent for 1997, and 4.7 percent for 1996.
The entire economy of the United States, as measured by gross domestic product (GDP), adjusted for inflation, increased an estimated 2.7 percent in 1998, 3.8 percent in 1997, and 2.8 percent in 1996. Consequently, R&D as a share of GDP will reach 2.61 percent in 1998, up from 2.54 percent in 1997, and 2.57 percent in 1996. This 1998 share is the highest since 1992's 2.64 percent, and reflects a continuation of a general upturn that began in 1994 after a three-year decline from 1991-94 (figure 1). Despite this recent increase, the R&D share is still below levels reached in the early 1990s. The historic high since 1957 for the Nation's R&D/GDP ratio was reached in 1964 at 2.87 percent; the low was 2.12 percent in 1978.
Of the projected $220.6 billion spent on R&D in 1998, $34.4 billion (or 15.6 percent) is expected to be for basic research, $49.8 billion (22.6 percent) for applied research, and $136.4 billion (61.8 percent) for development. In comparison with 1997, R&D performance in 1998 reflects a 2.4-percent "real" (adjusted for inflation) increase in basic research, a 6.2-percent real increase in applied research, and a 5.8-percent real increase in development.
Federal R&D support in 1998 is expected to be $66.6 billion, a 0.8-percent increase in real terms over 1997. The Federal share of support for the Nation's R&D first fell below 50 percent in 1978, and it remained between 45 and 50 percent until 1988. It then fell steadily, dropping from 42.6 percent in 1988 to a current all-time low of 30.2 percent projected for 1998.
Other R&D funds will be provided by universities and colleges, state and local governments, and other nonprofit institutions. These funds, in combination, are expected to reach $10.3 billion in 1998, reflecting a 3.4-percent real increase over their 1997 level.
R&D Performance Patterns
The Federal Government is expected to perform $16.9 billion of R&D in 1998, a real increase of 0.2 percent from 1997. Federal agencies are estimated to account for 7.7 percent of national R&D performance in 1998, reflecting, again, a continual decline in the Federal performance share, which began in the mid-1970s. Universities and colleges, excluding academically administered FFRDCs, are expected to account for 11.6 percent ($25.7 billion) of national R&D performance in 1998; this is a moderate real increase (3.1 percent) over 1997.
Basic Research Patterns
Industry and industry-administered FFRDCs, combined, are expected to account for 25.0 percent ($8.6 billion) of the Nation's basic research performance in 1998. Universities and colleges are expected to account for 51.1 percent ($17.6 billion), and their FFRDCs for another 7.8 percent ($2.7 billion). The remaining basic research performance will be carried out by the Federal Government, comprising 8.3 percent ($2.9 billion) of the total, and by other nonprofit organizations and their affiliated FFRDCs-7.8 percent ($2.7 billion). While Federal Government performance of all R&D is expected to rise only 0.2 percent in real terms (as described above), Federal performance of basic research is expected to rise 4.2 percent.
U.S. R&D Expenditure Trends
International R&D Spending
R&D expenditure levels from Federal sources, presented here based on performer-reported surveys, differ from Federal R&D funding totals reported by the Federal agencies that provide those funds. During the past several years, these differences have widened. The difference in the Federal R&D totals appears to be concentrated in the funding of industry R&D by the Department of Defense. See National Patterns of R&D Resources: 1996 (NSF 96-333) and the forthcoming National Patterns of R&D Resources: 1998 for detailed discussion and documentation of these differences.
This Data Brief was prepared by: