The federal government funds the majority of basic research in the United States, while industry funds the majority of development.
Why is this indicator important?
The outcomes and beneﬁts of R&D investments depend not only on the amount of funding but also on the sources of support and the type of R&D those sources support.
Industry funds about 83% of development, while the federal government funds about 16%.
The federal government funds about 59% of basic research, while industry funds 17% (SEI 2008
Appendix Table 4-10).
Industry surpassed the federal government as the largest source of R&D funding overall in 1980.
Following an economic slowdown in the United States in 2001 and 2002, the business activities of many R&D-performing ﬁrms were curtailed.
The federal share of R&D funding ﬁrst fell below 50% in 1979 and dropped to a low of 25% in 2000. Reﬂecting increased research spending on health, defense and counterterrorism, the federal share of R&D funding is projected at 28% of the R&D funding total in 2006.