Federal agencies provided $105.4 billion for R&D
and R&D-plant-related activities in FY 2004 (table 1). Over the decade ending FY 2004, federal obligations for R&D and R&D plant grew at an average annual rate of 4.3% (2.3% in inflation-adjusted 2000 dollars), but average growth rates for the first and second halves of the period differed substantially both for total R&D and R&D plant and for each component. Growth rates are calculated for the period FY 2000 to FY 2004 because changes in National Institutes of Health (NIH) and National Aeronautics and Space Administration (NASA) classifications of R&D component activities resulted in large differences in obligations reported between FY 1999 and FY 2000 (see, for example, R&D plant for 1999 and 2000 in table 1). Total R&D and R&D plant averaged an annual growth rate of 2.2% between FY 1994 and FY 1999 and 8.0% between FY 2000 and FY 2004 (0.5% and 5.7%, respectively, in constant 2000 dollars).
Table 1 Source Data: Excel file
Agencies' Funding for Research
Research accounted for 50.6% ($53.4 billion) of total federal R&D and R&D plant money in FY 2004 (table 1). Federal agencies provided 42.5% ($22.7 billion) of their total research dollars to universities and colleges, 22.6% ($12.1 billion) to intramural performers (i.e., in-house or other federal agencies), and 12.7% ($6.8 billion) to industry (figure 1). The remainder was divided among federally funded research and development centers, nonprofit organizations, state governments, and foreign performers. Federal obligations for research grew at an average annual rate of 6.9% (4.9% in inflation-adjusted 2000 dollars) between FY 1994 and FY 2004. Within this period, obligations grew at an average annual rate of 4.1% between FY 1994 and FY 1999 and 8.5% between FY 2000 and FY 2004 (2.4% and 6.2%, respectively, adjusted for inflation).
Figure 1 Source Data: Excel file
Research in the life sciences accounted for 52.0% ($27.7 billion) of total federal research dollars in FY 2004 (figure 2). Engineering was a distant second, accounting for 16.6% ($8.9 billion).
Figure 2 Source Data: Excel file
Basic research accounted for 24.8% ($26.1 billion) of total R&D and R&D plant funding in FY 2004. The Department of Health and Human Services (HHS) provided 56.5% ($14.8 billion) of basic research support, mainly from NIH (figure 3). NSF provided the next largest proportion (13.4%, or $3.5 billion), followed by the Department of Energy (DOE) at 10.2% ($2.7 billion). Federal obligations for basic research increased 6.8% annually between FY 1994 and FY 2004 (4.8% in inflation-adjusted 2000 dollars). Between FY 1994 and FY 1999, federal obligations for basic research grew at an average annual rate of 5.2%, and between FY 2000 and FY 2004 at an average annual rate of 7.5% (3.5% and 5.2%, respectively, adjusted for inflation).
Figure 3 Source Data: Excel file
Applied research accounted for 25.8% ($27.2 billion) of total R&D and R&D plant funding in FY 2004. The three top funding agencies were HHS (48.6%, or $13.2 billion), Department of Defense (DOD) (15.7%, or $4.3 billion), and DOE (10.4%, or $2.8 billion) (figure 4). Federal obligations for applied research increased 7.0% annually between FY 1994 and FY 2004 (5.0% in inflation-adjusted 2000 dollars). Within this period, average annual growth was 3.0% between FY 1994 and FY 1999 and 9.6% between FY 2000 and FY 2004 (1.3% and 7.2%, respectively, in inflation-adjusted 2000 dollars).
Figure 4 Source Data: Excel file
Agencies' Funding for Development
Development accounted for 45.6% ($48.0 billion) of total R&D and R&D plant obligations in FY 2004 (table 1). DOD accounted for most of the total federal development funding (86.2%, or $41.4 billion), due mostly to DOD's major systems development projects (table 2). Subtracting those dollars, DOD's share of development was 45.9%; NASA was the second largest supporter, with 21.9% ($2.7 billion); and DOE was the third largest, accounting for 16.8% ($2.1 billion) of total development, excluding major systems. Like research obligations, federal obligations for development also increased between FY 1994 and FY 2004 but at a lower rate, 1.9% (no change in inflation-adjusted 2000 dollars). Obligations for development grew at an average annual rate of 1.0% (down 0.7% in inflation-adjusted 2000 dollars) between FY 1994 and FY 1999 and at 8.7% (6.4% adjusted for inflation) between FY 2000 and FY 2004.
Table 2 Source Data: Excel file
Agencies' Funding for R&D Plant
The R&D plant share of federal R&D and R&D plant obligations over the period FY 1994 to FY 2004 ranged between 2.5% (FY 1996 and FY 1998) and 5.8% (FY 2000). Since FY 2000 the R&D plant share has slowly decreased, dropping to 3.8% ($4.0 billion) in FY 2004 (table 1). Federal agencies reported a 6.1% average annual growth rate in R&D plant (4.1% in inflation-adjusted 2000 dollars) between FY 1994 and FY 2004. Obligations decreased at an average annual rate of 1.6% between FY 1994 and FY 1999 and 2.9% between FY 2000 and FY 2004 (down 3.2% and 5.0%, respectively, in inflation-adjusted 2000 dollars).
Five agencies provided 89.6% of total federal R&D plant funding in FY 2004: NASA (36.8%, or $1.5 billion), DOE (25.2%, or $1.0 billion), HHS (10.8%, or $0.4 billion), NSF (9.9%, or $0.4 billion), and DOD (6.9%, or $0.3 billion).
Data Collection Notes
Definitions of research, development, and R&D plant as used in this InfoBrief are provided in the technical notes section of the detailed statistical tables reports for this survey. For the prior-year report, see http://www.nsf.gov/statistics/nsf06313/.
The 30 federal agencies that report R&D obligations to the NSF Survey of Federal Funds for Research and Development submitted actual obligations for FY 2004 and preliminary data for FY 2005 and FY 2006. Data were requested from agencies beginning in February 2005. Agencies later revise the preliminary data on the basis of actual changes in the funding levels of R&D programs. Further, agencies may provide changes in prior-year data to reflect program reclassifications or other data corrections.
In FY 2004 NASA implemented a full cost budget approach, which includes all of the direct and indirect costs for procurement, personnel, travel, and other infrastructure-related expenses relative to a particular program and project. NASA's data for FY 2004 and later years may not be directly comparable to its data for FY 2003 and earlier years.
Transition to the new system has delayed NASA's reporting of R&D data to NSF. Revisions in their methods of reporting R&D dollars have also delayed NIH and DOD responses to the survey. NIH has revised its financial database, and new records no longer contain information regarding field of science and engineering. The research required to ascertain this information has slowed NIH's response to the survey. Beginning in FY 2004, DOD started requiring its reporting agencies to adhere to a new set of DOD standards when providing data to the survey. This new reporting method has slowed DOD’s response time.
The full set of detailed tables from this survey will be available in the report Federal Funds for Research and Development: Fiscal Years 2004, 2005, and 2006 at http://www.nsf.gov/statistics/fedfunds/. Individual detailed tables from the 2004–06 survey may be available in advance of the full report. For further information, contact
This InfoBrief was prepared by
John E. Jankowski
Research and Development Statistics Program
Division of Science Resources Statistics
National Science Foundation
4201 Wilson Boulevard, Suite 965
Arlington, VA 22230
 This InfoBrief is revised. Initially, the Department of Defense (DOD) reported $40.130 billion in major systems development obligations for FY 2004. DOD has since revised that FY 2004 total to $35.783 billion. The current InfoBrief incorporates these revisions into the federal R&D obligation totals.
FY 2004 data presented here are from the National Science Foundation (NSF) Survey of Federal Funds for Research and Development FY 2004–06, which collected actual data for FY 2004 and preliminary data for FY 2005 and FY 2006.
 Beginning with FY 2000, NIH classified all of its development activities as research. Also in FY 2000, NASA reclassified Space Station as a physical asset, reclassified Space Station Research as equipment, and transferred funding for the program from R&D to R&D plant.