Introduction TOP

Federal agencies report a 3-percent decrease in expected Federal funding for research and development (R&D) and R&D plant in fiscal year (FY) 1996, to $71 billion. A 30-percent drop in R&D plant obligations (to $2 billion) and a 4-percent decrease in development funding (to $41 billion) contribute to this decline. Research spending (including basic and applied research) is expected to increase 2 percent (to $28 billion). After adjusting for inflation, agencies expect obligations for R&D and R&D plant to decline 5 percent in FY 1996. The estimated obligations provided here are from reports by Federal agencies to the National Science Foundation (NSF) during the period February through November 1995. They are subject to change as Federal agencies update their budgets to reflect approved programs.

Defense Development FundingTOP

The recent National Academy Press report, Allocating Federal Funds for Science and Technology (Washington, DC, 1995) is indicative of the considerable interest in further differentiating between the various parts of the Federal R&D budget. Specifically, the report recommends separate tabulations for the R&D that supports "science and key enabling technologies" (including for military and nondefense applications) and for the R&D that primarily supports "testing and evaluation of large technical systems prior to production" (of mostly defense-related systems). To better understand these components of Federal R&D funding, NSF now collects from sixteen agencies within the Department of Defense (DOD) development dollars in two categories, advanced technology development and major systems development. This Federal Funds volume is the first to include such statistics on development funding.

DOD expects to provide $26 billion (87 percent of its total development obligations) toward major systems development, which represents a projected 2-percent drop in FY 1996 (Table 1). Air Force, Navy, Army's Military Functions component, and the Ballistic Missile Defense Organization (BMDO) collectively account for $24 billion (95 percent) of the major systems development preliminary obligations. Three of these four top funders expect decreases in major systems development in FY 1996: Army and Navy each expect reductions of 9 percent and BMDO obligations are slated to drop by 2 percent. Air Force will increase its funding for major systems development by about $460 million (4 percent).

Table 1.

DOD reports a 17-percent ($0.8 billion) decrease in its expected advanced technology development obligations (to $3.7 billion) in FY 1996. (Adding in basic and applied research support, DOD's total science and technology R&D budget would decrease 12 percent, from an estimated $8.9 billion in FY 1995 to an expected $7.9 billion in FY 1996.) Advanced technology comprises all of the estimated FY 1996 development funding at the Defense Logistics Agency (DLA) ($30 million) and the Defense Nuclear Agency (DNA) ($34 million) and nearly all ($1.7 billion or 98 percent) at the Advanced Research Projects Agency (ARPA whose name was recently changed back to Defense Advanced Research Projects Agency). Each of these three agencies report a modest increase in expected FY 1996 funding for advanced technology development from FY 1995 totals-DNA up by $4 million, DLA up by $3 million, and ARPA up by $2 million. Six of the 13 Defense agencies project no plans for advanced technology funding, while the others (excluding ARPA) expect obligations ranging from $30 million at DLA to $280 million at Washington Headquarters Services (WHS). (For this survey cycle, the Army Corps of Engineers was unable to breakout its $23 million in development funding.)

ARPA accounts for 46 percent of DOD's estimated FY 1996 total advanced technology development obligations, compared with its substantially smaller 8-percent share of the DOD combined R&D and R&D plant total. The Air Force reports the largest expected increase in advanced technology funding, up 9 percent (or $39 million to $0.5 billion). Army accounts for nearly half of the projected decrease in advanced technology dollars, dropping from $1 billion to $0.6 billion (down 47 percent). The second largest decrease is projected for WHS, which expects a decline of $180 million (down 39 percent) from its FY 1995 funding level.

Agency Total Funding Shares TOP

Seven Federal agencies, of the 32 that report to the Federal Funds Survey, account for 92 percent ($66 billion) of total projected Federal funding for R&D and R&D plant in FY 1996 (Table 2). DOD will still comprise the largest share (48 percent) even though its funding is expected to decrease 5 percent from FY 1995 levels. Army (with its 19-percent decrease), Navy (down 9 percent), and combined Defense agencies (down 5 percent) contribute most to DOD's drop in overall R&D funding. Within the Defense agencies, the Joint Staff (down 57 percent), Special Operations Command (down 43 percent), and Washington Headquarters Services (down 18 percent) report the largest percentage decreases in overall proposed R&D funding.

Table 2.

Funding from the Department of Health and Human Services (HHS) comprises the second largest share (17 percent) of the expected Federal R&D and R&D plant total (chart 1). HHS projects a 1-percent increase in FY 1996. Most of the HHS amount is for support of the life sciences by its National Institutes of Health. The other top funding agencies are projected to be the National Aeronautics and Space Administration (NASA) (12 percent of the FY 1996 Federal R&D and R&D plant total), the Department of Energy (DOE) (11 percent), NSF (4 percent), the Department of Agriculture (USDA) (2 percent), and the Department of Commerce (DOC) (nearly 2 percent). NASA, DOC, and USDA each report a decline of R&D and R&D plant funding in FY 1996, whereas funding from DOE and NSF is slated to increase.

Chart 1.

R&D Growth in the 1990s TOP

Of the seven major R&D funding agencies, DOC reports the largest estimated average annual R&D and R&D plant funding growth rate for the period from FY 1990 to FY 1996-21 percent (18 percent in constant 1987 dollars). DOC's growth reflects the rapid increases in funding at its National Institute of Standards and Technology (NIST). NIST reports that its obligations increased overall from $131 million ($117 million in constant 1987 dollars) in FY 1990 to an estimated $786 million ($604 million in constant 1987 dollars) in FY 1996. The latter figure would have been considerably higher had not NIST also reported a projected 21-percent decrease in R&D funding for FY 1996. NSF follows DOC with a 7-percent average annual growth rate (4 percent in constant 1987 dollars) during the same period. HHS expects to average 6-percent growth per year (3 percent in constant 1987 dollars) in R&D and R&D plant funding from FY 1990 to FY 1996. DOD's obligations will drop on average over 1 percent annually. In constant 1987 dollars, its funding will decrease at an estimated annualized rate of 4 percent over this six-year period.

Funding by Character of Work TOP

Basic research and applied research each comprise about 20 percent ($14 billion) of the total estimated Federal funding for R&D and R&D plant in FY 1996. Funding for basic research is projected to increase about $0.5 billion (3.5 percent) in FY 1996, and funding for applied research is not expected to change from the previous year. Between FY 1990 and FY 1996, research funding will grow at an estimated average rate of 5 percent, which in constant 1987 dollars would be a 2-percent rate of increase. Federal agencies report applied research increasing at an expected 6-percent growth rate (3 percent in constant 1987 dollars) between FY 1990 and FY 1996, and basic research growing at about 4 percent per year (1 percent in constant 1987 dollars).

Agency reports on expected funding indicate that development and R&D plant will decrease 4 percent and 30 percent, respectively, in FY 1996. Even though development funding is expected to have dropped at an annualized rate of 1 percent (3 percent in constant dollars) from FY 1990 to FY 1996, development still accounts for 57 percent of the expected Federal R&D and R&D plant funding total. Five of the seven major R&D funding agencies project decreases in their R&D plant in FY 1996. The percentage decreases range from 66 percent at DOC (due to projected drops in R&D plant funding at NIST) to 22 percent at NSF. DOE expects R&D plant funding to increase 13 percent, whereas DOD reports less than 1 percent rise in such funds.

Funding by Fields of Science and Engineering TOP

Seven of the eight fields of science and engineering identified in the survey show an expected increase in combined basic and applied research funding between FY 1990-96 (Chart 2). In constant 1987 dollars, only funds for the environmental sciences and engineering are expected to drop-by 3 percent and 2 percent, respectively-during this period. Agencies project average annual growth in research support ranging from 0.3 percent (down 2 percent in constant 1987 dollars) for engineering, to 11 percent (8 percent in constant 1987 dollars) for mathematics and computer sciences.

Chart 2.

Life sciences continue to receive the greatest share of research funding in FY 1996, accounting for an estimated 41 percent of total Federal research dollars. The biological (excluding environmental) and medical sciences will continue to get the majority (85 percent in FY 1996) of the Federal research funding for the life sciences. The physical sciences will again have the second largest share, accounting for 22 percent of the expected total research obligations. Life and physical sciences plus engineering (the third largest category) account for nearly 80 percent of total Federal research funding expected in FY 1996.

For multidisciplinary or interdisciplinary projects and those projects that cannot be classified within one of the other broad fields of science, an "other sciences, not elsewhere classified" category is used. Since the other sciences category continues to grow (from $270 million in constant 1987 dollars in FY 1990 to $860 million in constant 1987 dollars in FY 1996), it appears to be increasingly difficult for agencies to classify new and emerging science fields into the present taxonomy. Consequently, NSF intends in the future to reevaluate the current fields of science and engineering categories to address how research projects might be better classified in future Federal Funds surveys.