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Two NSF Surveys on R&D Document Varied Relationships between Businesses and Academia

NSF 13-333 | September 2013 | PDF format. PDF  
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Errata (Nov 08, 2013) [close -]
The number of companies sampled in 2010 for the Business R&D and Innovation Survey was incorrectly stated. The number has been corrected from 42,314 to 42,965.


by Ronda Britt and Brandon Shackelford[1]

Universities reported that 4.9%, or $3.2 billion, of their $65 billion total in research and development expenditures in FY 2011 was funded by businesses, according to the National Science Foundation's (NSF's) Higher Education Research and Development (HERD) Survey. This percentage has remained very stable since the late 1970s (between 5% and 7% of total R&D expenditures).[2]

Overall, the share of academic R&D funded by businesses did not differ much between private institutions (5.2%) and public institutions (4.7%). Relatively large shares of the R&D funding provided by businesses went toward two fields: the medical sciences (39%) and engineering (26%) (figure 1). The remainder of business-funded academic R&D was divided between biological sciences, agricultural sciences, environmental sciences, and other fields. Compared with academic R&D funded by businesses, the academic sector's overall R&D expenditures were less concentrated in the fields of medical sciences and engineering (31% and 15%, respectively, of the $65 billion total).


FIGURE 1. Higher education R&D expenditures funded by businesses, by R&D field: FY 2011.

  Figure 1 Source Data: Excel file

This InfoBrief looks at findings from two NSF surveys—the FY 2011 HERD Survey of universities and the 2010 Business R&D and Innovation Survey (BRDIS) of companies—to examine businesses' R&D collaborations with academic institutions, as well as relationships between businesses and academia.

Academic R&D Funding from Businesses

The 2011 HERD Survey found that overall, 67% of the universities surveyed reported some level of R&D funding from business, with 38% of those reporting business-funded expenditures in excess of $1 million. The top 15 academic institutions that received business funding accounted for 37% of the $3.2 billion total (table 1). Duke University reported over $200 million in business-funded expenditures (86% within the field of medical sciences), and Massachusetts Institute of Technology (MIT) and Ohio State University (OSU) reported over $100 million each. MIT's business funding was spent primarily in engineering, computer science, and multidisciplinary fields. OSU's funding was concentrated in mechanical engineering and medical sciences. On average, business-funded R&D accounted for 8.9% of the total R&D for the top 15 academic institutions that received business funding

TABLE 1. The 15 higher education institutions reporting the largest R&D expenditures funded by business: FY 2011
(Dollars in thousands)
Rank Institution Total R&D
expenditures
Business-funded
R&D expenditures
% of
total
All institutions 65,073,411 3,162,464 4.9
Top 15 institutions 13,256,958 1,174,380 8.9
1 Duke U. 1,022,207 215,366 21.1
2 MA Institute of Technology 723,610 110,006 15.2
3 OH State U. 832,126 103,564 12.4
4 U. CA, Berkeley 707,945 86,769 12.3
5 SUNY, U. Albany, C. of Nanoscale Science
and Engineering
248,778 80,797 32.5
6 U. TX, Austin 632,171 68,479 10.8
7 U. CA, San Diego 1,009,378 67,139 6.7
8 PA State U., U Park and Hershey Medical Ctr. 794,846 64,650 8.1
9 U. TX, M. D. Anderson Cancer Ctr. 663,279 59,582 9.0
10 Johns Hopkins U. 2,145,308 59,048 2.8
11 Stanford U. 907,971 5,8014 6.4
12 TX A&M U., College Station 705,720 54,880 7.8
13 U. CA, San Francisco 995,226 53,607 5.4
14 U. CA, Los Angeles 982,357 48,961 5.0
15 U. PA 886,036 43,518 4.9

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, Higher EducationResearch and Development Survey, FY 2011.

Table 1 Source Data: Excel file

Many of the institutions reporting the highest proportion of their R&D expenditures funded by businesses were relatively smaller R&D performers. For example, Wichita State University and the University of Tulsa reported the largest proportions of business funding for their R&D expenditures (47% and 38%, respectively), but their total R&D expenditures were $50 million and $23 million, respectively (table 2). Wichita State University houses the National Institute for Aviation Research, which works closely with the aviation manufacturing industry on research projects. The University of Tulsa operates 13 different research consortia and joint industry projects within engineering fields. All but three of the institutions reporting the largest proportions of business funding had total R&D expenditures of less than $70 million, most ranking well below the top 150 in total R&D expenditures.

TABLE 2. Higher education institutions reporting over 15% of total R&D expenditures funded by business, ranked by percent funded: FY 2011
(Dollars in thousands)
Rank Institution Total R&D expenditures Business-funded R&D expenditures % of
total
1 Wichita State U. 50,194 23,766 47.3
2 U. Tulsa 23,320 8,808 37.8
3 SUNY, U. Albany C. of Nanoscale Science and Engineering 248,778 80,797 32.5
4 Columbia U., Teachers C. 18,406 5,925 32.2
5 Ball State U. 18,765 4,402 23.5
6 Mercer U. 29,039 6,662 22.9
7 CO School of Mines 48,704 10,290 21.1
8 Duke U. 1,022,207 215,366 21.1
9 Polytechnic Institute of NY U. 13,222 2,618 19.8
10 U. LA Lafayette 69,978 13,538 19.3
11 Clarkson U. 17,951 3,321 18.5
12 Creighton U. 31,443 5,638 17.9
13 MA Institute of Technology 723,610 110,006 15.2

NOTE: Includes only institutions spending over $10 million in FY 2011.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, Higher Education Research and Development Survey, FY 2011.

Table 2 Source Data: Excel file

Business Purchases of Academic R&D Services and Collaborative R&D Projects

Payments to U.S. colleges and universities for collaborative R&D projects or purchased R&D services make up a very small share of overall domestic business R&D spending, according to NSF's BRDIS. Companies estimated to have performed at least $7 million of R&D in the United States in any of the 4 years preceding 2010 (hereafter referred to as large-R&D companies) were asked to detail the types of organizations to which they made collaborative R&D payments or from which they purchased R&D services. Of the $25.3 billion of such expenditures estimated for large-R&D companies, only $829 million were reported as going to U.S. universities and colleges. Consistent with the field-of-science data from HERD presented in figure 1, 60% of these payments were reported by companies classified in the pharmaceutical manufacturing industry. By way of comparison, in 2010, companies spent $251 billion of their own funds on R&D in the United States—most of which supported the companies' own R&D performance.

Relationships Between Large-R&D Companies and Academia

Although payments to colleges and universities represent less than 1% of company R&D spending, 29% of large-R&D companies reported making these payments or they reported initiating new R&D collaborations with academia in 2010.[3] Despite accounting for the majority of payments to academia, the pharmaceutical manufacturing industry represented only 21% of the large-R&D companies reporting R&D payments to academia or new collaborations with academia. Other well-represented industries reporting these activities included computer and electronic products manufacturers, transportation equipment manufacturers, and food manufacturers.

The large-R&D companies reporting such university involvement discussed above differ from other large-R&D companies in a number of ways (figure 2). These companies are on average much larger in terms of employment, sales, and R&D expenditures. On average, these companies are also more likely than other companies to report introducing manufacturing process innovations and report more revenue from first-to-the-market innovations. These companies also perform more research overall and as a share of their total domestic R&D performance.


FIGURE 2. Ratios of average values of survey items for companies with university involvement to those without such involvement: 2010.

  Figure 2 Source Data: Excel file

Incidence of Companies Reporting Other Activities with Academia

Apart from the data discussed earlier, all companies surveyed by BRDIS were asked several yes or no questions about their activities with academia that were not necessarily tied to their own R&D. These questions asked whether companies had done the following:

  • Hired academic consultants
  • Hosted student interns in science or engineering programs
  • Hosted postdoctoral fellows in science or engineering
  • Had company employees serve as visiting scientists or engineers at a university
  • Made monetary gifts to universities that were restricted to supporting R&D

In 2010, hosting student interns in science and engineering was the most common activity reported, estimated at 14% of companies with R&D activity (defined as having either R&D expense or R&D costs paid for by others) (table 3). The next most common activity with academia involved hiring academic consultants (6% of companies with R&D activity). The remaining activities were much less common, with 2% of these companies estimated to have made monetary gifts restricted to supporting R&D. Only 1% of companies with R&D activity are estimated to have hosted postdoctoral fellows in S&E fields, and 1% had company employees serve as visiting scientists or engineers at universities in 2010.[4]

TABLE 3. R&D-active companies in the United States that reported activities with academia: 2010
Activity with academia Yes No No
response
Hosted student interns in science or engineering programs 7,709 45,604 3,256
Hired academic consultants 3,397 49,931 3,241
Made monetary gifts to universities restricted to supporting R&D 1,213 51,896 3,461
Had company employees serve as visiting scientists at a university 782 52,458 3,329
Hosted postdoctoral fellows in science or engineering 626 52,643 3,300
Any of the above activities 9,632 43,805 3,132

NOTE: Counts are weighted totals for companies that reported to the survey and had positive R&D expense or R&D paid for by others.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics and U.S. Census Bureau, Business R&D and Innovation Survey, 2010.

Table 3 Source Data: Excel file

Of nearly 57,000 companies estimated to have R&D activity in 2010, 18% were estimated to have at least one of the activities listed above. The prevalence of companies reporting activities with academia varied considerably by industry (figure 3). Industries that reported higher rates of activities with academia than the overall average included biotechnology (North American Industry Classification System [NAICS] code 541711), utilities (NAICS 22), and semiconductor and other electronic components (NAICS 3344).[5] The industry that accounts for the largest share of U.S. R&D spending (pharmaceuticals and medicines; NAICS 3254) also had above-average rates of activity with academia. Industries least likely to report activities with academia included textile, apparel, and leather manufacturers (NAICS 313–16) and finance and insurance (NAICS 52).


FIGURE 3. R&D-active companies in the United States that reported activities with academia in 2010, by select industry.

  Figure 3 Source Data: Excel file

Data Sources and Limitations

The HERD fiscal year referred to throughout this report is the academic fiscal year; for most institutions FY 2011 represents the period 1 July 2010 through 30 June 2011. The HERD Survey data presented in this InfoBrief were obtained from 912 universities and colleges that grant bachelor's or higher degrees and expended at least $150,000 in R&D during the survey period. The business-funded expenditures reported represent grants and contracts from the companies themselves; the total does not include funding received from a company's nonprofit foundation.

The sample for BRDIS was selected to represent all for-profit companies with five or more domestic employees that are publicly or privately held. Although the focus of the survey is on companies that perform or fund R&D (i.e., R&D active), it also collects information from companies with no R&D activity. For 2010 a total of 42,965 companies were sampled for BRDIS, representing over 2 million companies in the population. Because the statistics from the survey are based on a sample, they are subject to both sampling and nonsampling errors.

For this InfoBrief, BRDIS statistics for business activities with academia based on yes or no questions represent only the weighted amounts for companies responding to the item. Estimates were not adjusted for item or unit nonresponse.

BRDIS estimates of payments from companies to academia for collaborative R&D and R&D services differ from HERD estimates of academic R&D expenditures funded by the business sector. Some possible reasons for these differences include the following:

  • Gifts to universities are not accounted for as an R&D expense by companies, but rather as charitable giving. Companies may opt to account for payments to universities as a gift if the research agreement does not give full rights to any resulting intellectual property to the company.
  • BRDIS estimates are derived from U.S. R&D expenditures only and does not include payments to academia from foreign research units.
  • Interviews with BRDIS respondents indicate that details on purchased R&D services are among the more difficult items on BRDIS for companies to report. These payments may not meet the threshold of materiality to merit tracking separately from an accounting perspective.
  • Funding from foreign operations of foreign corporations is not included in BRDIS estimates.

The full set of detailed tables from HERD are available in the report Higher Education Research and Development: Fiscal Year 2011 at http://www.nsf.gov/statistics/herd/. Detailed tables for the 2010 BRDIS are forthcoming and will be available at http://www.nsf.gov/statistics/industry/. Individual tables from the 2010 survey may be available in advance of publication of the full report. For more information about HERD, please contact Ronda Britt. For questions related to BRDIS, please contact Raymond Wolfe.

Notes

[1] Ronda Britt, Research and Development Statistics Program, National Center for Science and Engineering Statistics, National Science Foundation, 4201 Wilson Boulevard, Suite 965, Arlington, VA 22230 (rbritt@nsf.gov; 703-292-7765). Brandon Shackelford is the owner of Twin Ravens Consulting, Austin, TX. For further information about BRDIS, contact Raymond M. Wolfe, Research and Development Statistics Program, National Center for Science and Engineering Statistics, National Science Foundation, 4201 Wilson Boulevard, Suite 965, Arlington, VA 22230 (rwolfe@nsf.gov; 703-292-7789).

[2] See table 1 in National Science Foundation, National Center for Science and Engineering Statistics. 2013. Higher Education Research and Development: Fiscal Year 2011. Detailed Statistical Tables NSF 13-325. Arlington, VA. Available at http://www.nsf.gov/statistics/nsf13325/.

[3] Of the 2,572 companies that received Form BRDI-1, unit responses were received from 1,924. Of these responses, 367 reported payments to universities, colleges, and academic researchers in Question 2-23 or reported entering into a new R&D agreement with universities, colleges, and academic researchers in Question 4-7; 893 reported no such activity; and 665 did not answer either question (item nonresponse). Cases with item nonresponse are not included when calculating ratios.

[4] The incidence figures reported are the percentages of companies (weighted totals) responding yes to the various questions on activities with academia. Also, these figures reflect the sample-weighted responses of the sample companies that responded to the survey and do not include data for those who were fully nonresponsive to the survey. Those responding to the survey and whose R&D status could be determined represent approximately 1.5 million companies, weighted; the nonrespondents represent about 327,300 companies, weighted.

[5] In the 2010 BRDIS statistics, the biotechnology R&D industry included many pre-commercial start-up companies as well as contract research organizations. Companies classified in the utilities industry tend to be large in terms of sales with low R&D spending relative to their size. The utilities industry allocates a larger share of its total R&D expenditures to payments to R&D contractors and collaborators than any other industry tabulated by BRDIS.


National Science Foundation, National Center for Science and Engineering Statistics
Two NSF Surveys on R&D Document Varied Relationships between Businesses and Academia
Arlington, VA (NSF 13-333) [September 2013]


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