Research and development (R&D) expenditures in the United States are projected to reach $284 billion in 2003, up slightly from an estimated $276 billion in 2002.
Industry performed a projected $194 billion of R&D in 2003, or 68 percent of the national total. Industry was also the largest source of R&D funding, paying for 63 percent of all R&D. Nearly all (98 percent) of these funds flowed to industry; the remainder financed R&D at universities, colleges, and nonprofit organizations.
In the industrial sector in 2001, computer and electronic products manufacturing performed 24 percent ($47 billion) of all industrial R&D. The next largest industrial sector, transportation equipment, performed $26 billion in R&D in 2001. Nonmanufacturing industries associated with software and computer-related services performed between $24 billion and $25 billion of R&D in 2001.
Universities and colleges performed a projected $40 billion of R&D in 2003, or 14 percent of the national total. However, universities and colleges performed the majority (55 percent) of all basic research.
In 2001 California had the highest level of R&D expenditures among all states, $51 billion. However, the ratio of R&D to gross state product was highest in New Mexico at 7.1 percent compared with 3.8 percent in California.
Federal R&D Performance and Support
Federal R&D support expanded from $66 billion to a projected $85 billion between 2000 and 2003 as reported by performers of R&D. This growth increased the Federal R&D support share of total U.S. R&D from 25 to 30 percent. In contrast, Federal agencies and federally funded research and development centers performed only 13 percent of U.S. R&D in 2003.
In fiscal year (FY) 2003 the Department of Defense is estimated to have obligated the most funds among Federal agencies for R&D support$45 billion, or 46 percent of all Federal R&D obligations. The Department of Health and Human Services obligated the second largest amount in R&D support ($28 billion), followed by the National Aeronautics and Space Administration ($9 billion), the Department of Energy ($8 billion), and the National Science Foundation ($3 billion).
The budget allocation for counterterrorism-related R&D increased dramatically between FY 2001 and FY 2003 from $0.6 to $2.7 billion. Most of this budget now falls under the aegis of the National Institutes of Health and the newly formed Department of Homeland Security.
International Comparisons of National R&D Trends
The United States accounts for approximately 44 percent of total R&D expenditures in all Organisation for Economic Co-operation and Development (OECD) countries combined. R&D investments in the United States are 2.7 times greater than R&D investments made by Japan, the second largest performer. In 2000 the United States spent more on R&D activities than all other "group of seven" (G-7) countries (Canada, France, Germany, Italy, Japan, and the United Kingdom) combined.
A noteworthy trend among G-7 and other OECD countries has been the relative decline in government R&D funding over the past 2 decades. In 2000 less than 30 percent of all OECD R&D funds were derived from government sources, down considerably from the 44 percent share reported in 1981. In aggregate terms, this change reflects a decline in industrial reliance on government funds for R&D performance.
As a result of a worldwide slowing in R&D spending during the early 1990s, the latest ratio of R&D spending to gross domestic product (R&D/GDP) for most G-7 countries is no higher now than it was a decade ago. The United States, devoting 2.7 percent of its GDP to R&D in 2001, ranked fifth among OECD countries during the 19962001 period. Sweden led OECD countries at 3.8 percent of its GDP devoted to R&D, followed by Finland (3.4 percent), Japan (3.0 percent), and Iceland (2.9 percent).
As an indication of an overall pattern of increased university-firm interactions, the proportion of academic R&D funding from industry sources (for G-7 countries combined) climbed from 2.6 percent of the academic R&D total in 1981 to 5.2 percent in 1990 and to 6.0 percent in 1999.
National Science Foundation, Division of Science Resources Statistics National Patterns of Research Development Resources: 2003
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