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Industrial Funding of Academic R&D Rebounds in FY 2005
NSF 07-311 | January 2007 | PDF format PDF  

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, according to data from the National Science Foundation (NSF) Survey of Research and Development Expenditures at Universities and Colleges. 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 (figure 1). Industry's share in FY 2005 of 5.0% is comparable to the share it held in FY 1983.

FIGURE 1. Industry financed R&D expenditures at universities and colleges: FY 1972-2005.

  Figure 1 Source Data: Excel file

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) (table 1). 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.

TABLE 1. Science and engineering R&D expenditures at universities and colleges: FY 2000-05.

  Table 1 Source Data: Excel file

Other Sources of R&D Funding

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). R&D expenditures financed by state and local government funding grew by 2.2% in FY 2005, to $2.9 billion.[1] R&D expenditures funded by nongovernmental sources experienced the largest percentage increases in FY 2005. In addition to the increase in industrial funding, institutional funding increased 6.5% in FY 2005 to $8.3 billion, and funding from all other sources combined (nonprofit organizations and other nongovernmental entities) increased 8.4% to $3.1 billion.

Funding by Field and Federal Agency

Including all sources of funding, the medical sciences ($14.9 billion) and biological sciences ($8.8 billion) once again accounted for the largest field shares of academia's R&D performance total (table 2). Together, these two fields accounted for about one-half of R&D at universities and colleges. The fields showing the largest percentage increases for FY 2005 were life sciences not elsewhere classified (15.3%) and bioengineering/biomedical engineering (13.4%). Academic spending on bioengineering/biomedical engineering R&D has risen substantially in the last several years, almost doubling between FY 2001 ($213 million) and FY 2005 ($420 million).

TABLE 2. R&D expenditures at universities and colleges, by science and engineering field: FY 2004-05.

  Table 2 Source Data: Excel file

The Department of Health and Human Services provided the largest share of federal funding in FY 2005 ($15.9 billion), primarily in support of the medical and biological sciences (table 3). NSF provided the second largest amount of federal funding ($3.5 billion), with most (84%) of the funding going toward R&D in engineering and in the biological, computer, environmental, and physical sciences.

TABLE 3. Federally financed R&D expenditures at universities and colleges, by source of funds anad science and engineering field: FY 2005.

  Table 3 Source Data: Excel file

Top Academic Research Performers

Of the 640 institutions surveyed, the top 20 in terms of total R&D expenditures accounted for 30% of total academic R&D spending (table 4). The top 100 research performers accounted for 80% of all R&D dollars in FY 2005. Two universities were displaced from the top 20 in FY 2005: the University of Colorado slipped from 20th in FY 2004 to 22nd in FY 2005, and the University of Illinois at Urbana-Champaign dropped from 18th in FY 2004 to 24th in FY 2005. Replacing them were Columbia University in the City of New York, which moved from 23rd in FY 2004 to 18th in FY 2005, and the University of Florida, which climbed from 27th to 20th. Duke University had the most significant change of rank within the top 20, an increase of over $100 million in academic R&D spending moved them from 14th in FY 2004 to 10th in FY 2005.

TABLE 4. Twenty institutions reporting the largest FY 2005 academic R&D expenditures in science and engineering fields: FY 2004-05.

  Table 4 Source Data: Excel file

Passed-through Funds

To measure the extent of collaboration among institutions, the survey collects the portion of academic R&D expenditures passed through to other institutions for joint work on an R&D project, as well as the amount received as a subrecipient on such a project. Academic R&D expenditures that were passed through to higher education subrecipients increased from $1.3 billion in FY 2004 to $1.5 billion in FY 2005. R&D expenditures that were passed through to non-higher education subrecipients remained steady from FY 2004 to FY 2005 at $1.0 billion. Almost 90% ($1.4 billion) of the funds passed through to higher education subrecipients and 83% ($0.9 billion) of the funds passed through to non-higher education subrecipients were from federal sources.

Universities also reported an increase in R&D expenditures received as a subrecipient from other higher education pass-through entities, from $1.4 billion in FY 2004 to $1.5 billion in FY 2005.[2] R&D expenditures received as a subrecipient from non-higher education entities also increased from $1.3 billion in FY 2004 to $1.5 billion in FY 2005. More than 90% ($1.4 billion) of the funds received from higher education pass-through entities and 86% ($1.3 billion) of the funds received from non-higher education entities originated from federal sources.

Non-S&E R&D Expenditures

For the third consecutive year, the survey reported information at the institution level on non-S&E R&D expenditures in addition to expenditures on S&E R&D. In FY 2003, 81.7% of the survey respondents provided data on R&D expenditures by non-S&E field, reporting a total of $1.4 billion in non-S&E R&D expenditures. In FY 2004 a slightly higher percentage of institutions provided data (85.3%), and the reported amount of non-S&E R&D expenditures increased to $1.6 billion. In FY 2005 the percentage of institutions providing non-S&E expenditures increased to 94.1%, and the reported amount of non-S&E R&D expenditures also increased, to $1.8 billion (table 5). This amount is in addition to the $45.8 billion expended on S&E R&D. The largest amounts reported for individual non-S&E fields were in education ($761 million), business and management ($220 million), and humanities ($194 million). More than half of the federally financed non-S&E R&D expenditures (55.8%, or $426 million) were in the field of education.

TABLE 5. R&D expenditures in non-science and engineering fields at universities and colleges: FY 2005.

  Table 5 Source Data: Excel file

Data Notes

The academic R&D expenditures data presented in this InfoBrief were obtained from 640 universities and colleges that grant degrees in the sciences or engineering and expend at least $150 thousand in S&E R&D in the survey period. The survey collects the separately budgeted R&D expenditures within S&E fields reported by universities and colleges. This includes all funds expended for S&E activities specifically organized to produce research outcomes and commissioned by an agency either external to the institution or separately budgeted by an organizational unit within the institution. Unless noted differently, expenditures analyzed in this report refer to S&E R&D activities only. Non-S&E expenditures are reported separately in the survey and are not included in the overall expenditure totals.

Universities have been asked to identify specific agency sources of federal funding since FY 2003. The response rate for this item has increased greatly within the past 2 years as more institutions have begun to track R&D expenditures at this level of detail, and in FY 2005 virtually all (99.6% or $29.0 billion) of the $29.1 billion federal total was identified by agency source. However, the data for this item still represent slightly lower-bound estimates of agencies' actual support totals for FY 2005, because 23 of the 597 institutions that reported overall federal totals did not report agency sources, and NSF did not attempt to allocate the undistributed amounts to individual agencies.

Data reported on non-S&E R&D expenditures are also lower-bound estimates for the national totals because 35 of the 597 institutions who reported overall S&E totals did not report their non-S&E R&D expenditures, and NSF did not attempt to estimate for item nonresponse. Also, only institutions that conducted at least $150,000 of S&E R&D were surveyed. The activities of institutions that do not perform S&E R&D (but may conduct substantial amounts of non-S&E R&D) are not reflected here.

Profiles for institutions of higher education with S&E departments that grant master's degrees or higher are available at http://www.nsf.gov/statistics/profiles/. The profiles contain data from this survey as well as from two other NSF academic S&E surveys: the Survey of Federal Science and Engineering Support to Universities, Colleges, and Nonprofit Institutions and the Survey of Graduate Students and Postdoctorates in Science and Engineering. Data from the three surveys are available at http://www.nsf.gov/statistics/ and through the WebCASPAR database system, a Web tool for retrieval and analysis of statistical data on academic S&E resources (http://ncsesdata.nsf.gov/webcaspar/).

The full set of detailed tables from this survey will be available in the report Academic Research and Development Expenditures: Fiscal Year 2005 at http://www.nsf.gov/statistics/rdexpenditures/. Individual detailed tables from the 2005 survey may be available in advance of publication of the full report. For further information, contact

Ronda Britt
Research and Development Statistics Program
Division of Science Resources Statistics
National Science Foundation
4201 Wilson Boulevard, Suite 965
Arlington, VA 22230
703-292-7765
rbritt@nsf.gov

 

Footnotes

[1]  Figures reported for state and local government support of academic R&D exclude general-purpose funds that schools receive from these sources and devote to R&D activities. These funds are included in figures reported as institutional funds.

[2]  Amounts reported as passed through to higher education subrecipients often do not equal amounts reported as received by those subrecipients, due to differences in the item response rates for these two survey questions each year. Although the rounded amounts appear equal in FY 2005, the actual amounts reported as passed through to higher education subrecipients and received by higher education subrecipients are $1.54 billion and $1.49 billion, respectively.


National Science Foundation, Division of Science Resources Statistics
Industrial Funding of Academic R&D Rebounds in FY 2005
Arlington, VA (NSF 07-311) [January 2007]


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