National R&D Growth Trends
Trends in Federal R&D Support by National Objective, Federal Agency, and Performer Sector
The Federal R&D Tax Credit
Historical Trends in Non-Federal Support
Since 1994, R&D in the United States has risen sharply, from $169.2 billion to an estimated $264.6 billion in 2000. In real terms (adjusting for inflation), this rise has been from $176.2 billion to $247.5 billion in constant 1996 dollars, reflecting an annual real growth rate of 5.8 percent. The increase of $71.3 billion 1996 dollars between 1994 and 2000 is the greatest single real increase for any six-year period in the history of the R&D data series, which began in 1953. (See figure 4-1 .) The consistent pattern of R&D growth is noteworthy, implying a broad-based, increased interest in the promotion of R&D activities. See sidebar, "Definitions of Research and Development."
By comparison, gross domestic product (GDP), the main measure of the nations total economic activity, grew in real terms by 4 percent per year between 1994 and 2000. Thus, R&D has generally been outpacing the growth of the overall economy since 1994. As a result, R&D as a proportion of GDP has risen from 2.40 percent in 1994 to 2.66 percent in 2000.
Organizations that conduct R&D often receive outside funding; conversely, organizations that fund R&D often do not perform all R&D themselves. Therefore, in any discussion of the nations R&D, a distinction must be made between where the money came from originally (R&D expenditures characterized by source of funds) and where the R&D is actually being performed (R&D expenditures categorized by performer).
Private industry, which provided 68.4 percent ($181.0 billion) of total R&D funding in 2000, pays for most of the nations R&D. Private industry itself used nearly all of these funds (98.1 percent) in performing its own R&D; most of the funds (70.9 percent) were used to develop products and services rather than to conduct research. In 2000, the Federal Government provided the second largest share of R&D funding, 26.3 percent ($69.6 billion), and the other sectors of the economy (i.e., state governments, universities and colleges, and nonprofit institutions) contributed the remaining 5.3 percent ($14.0 billion). (See figures 4-1 , 4-2 , and 4-3 ; and text table 4-1 .)
Briefly, in terms of R&D performanceand discussed in greater detail belowindustry in 2000 accounted for an even larger share of the total (74.6 percent), followed by universities and colleges (11.4 percent) and the Federal Government (7.2 percent). Federally Funded Research and Development Centers (FFRDCs), which are administered by various industrial, academic, and nonprofit institutions, accounted for an additional 3.5 percent, and other nonprofit organizations accounted for 3.3 percent. (See text table 4-1 .)
National R&D Growth Trends
Between 1953 and 1969, R&D expenditures grew substantially at a real annual rate of 8.2 percent. However, starting in 1969 and for nearly a decade thereafter, R&D growth failed to keep up with either inflation or general increases in economic output. In fact, between 1969 and 1975, real R&D expenditures declined by 0.9 percent per year, as both business and government tended to deemphasize research programs (See figure 4-1 .) Federal funding, in particular, fell considerably during this perioddown 2.9 percent in real terms, which was felt in both defense- and nondefense-related programs.
The situation turned around in the mid-1970s. Following an economic recovery from the 1974 oil embargo and the 1975 recession, R&D expenditures increased in real terms by approximately 74.8 percent from 1975 to 1985 (5.7 percent per year) compared with a 40.0 percent rise in real GDP over the same period. During the first half of this period (197580), there was considerable growth in Federal R&D funding for nondefense activities. Although defense-related R&D expenditures rose as well, much of the Federal R&D gain was attributable to energy-related R&D (particularly nuclear energy development) and to greater support for health-related R&D. Non-Federal R&D increases were concentrated in industry and resulted largely from greater emphasis on energy conservation and improved use of fossil fuels. Consequently, energy concerns fostered increases in R&D funding by both Federal and non-Federal sources. Support for energy R&D rose more than 150 percent in real terms between 1974 and 1979 and accounted for approximately one-half of the national increase in real R&D spending.
Overall, the 197580 R&D recovery witnessed an average growth rate of 4.5 percent per year. That annual rate remained between 4 and 5 percent through 1982, although the early 1980s saw a heavy shift toward defense-related activities. As a result of these increases in defense R&D, growth in real R&D expenditures accelerated to an average annual rate of 8.5 percent over 198285. Such rapid growth had not been seen since the Sputnik era of the early 1960s.
On average, R&D spending increased 7.0 percent per year in real terms in the first half of the 1980s, then again changed abruptly. In the nine years from 1985 to 1994, average annual R&D growth after inflation slowed to 1.4 percent, vis-à-vis a 2.8 percent annual real growth in GDP. Reductions in both Federal and non-Federal funding of R&D, as a proportion of GDP, had contributed to this slowing. However, it is primarily the decline in real Federal R&D funding that contributed to the slow growth of R&D in the early 1990s.
This downward trend was reversed again in 1994, caused by substantial increases in industrial R&D, most notably in the computer and other information technology sectors. As already indicated, R&D in the United States grew in real terms by 5.8 percent per year between 1994 and 2000, despite little real growth (0.5 percent per year) in Federal R&D support. During the same period, industrial support for R&D grew at a real annual rate of 8.6 percent. Much of this increase might be explained by the favorable economic conditions that generally existed during this period.
Trends in Federal R&D Support by National Objective, Federal Agency, and Performer Sector
Federal Support as a Share of the Nations R&D Efforts
In recent years, the Federal Government has contributed
smaller shares of the nations R&D funding. The Federal
Government had once been the main provider of the nations
R&D funds, accounting for 53.9 percent in 1953 and as much
as 66.8 percent in 1964. Its share of R&D funding first fell
below 50 percent in 1979 and remained between 44 and 47
percent from 1980 to 1988. Since then, its share has fallen
steadily to 26.3 percent in 2000, the lowest ever recorded in
the history of the NSFs R&D data series. This decline in
the Federal Government share, however, should not be misinterpreted
as a decline in the actual amount funded. Federal
support in 2000 ($69.6 billion), for example, actually
reflects a 0.8 percent increase in real terms over its 1999
level. Because industrial funding increased much faster (see above), Federal support as a proportion of the total has continued
Federal R&D funding, in absolute terms, expanded between
1980 and 2000, from $30.0 to $69.6 billion, which,
after inflation, amounted to a small, real growth rate of 1.1
percent per year. This rate, however, was not uniform across
the period. From 1980 to 1985, Federal R&D funding grew
on average by 6.3 percent in real terms annually. Nearly all of
the rise in Federal R&D funding during the early 1980s was
due to large increases in defense spending.
Federal support slowed considerably beginning in 1986,
reflecting the budgetary constraints imposed on all government
programs, including those mandated by the Balanced
Budget and Emergency Deficit Control Act of 1985 (also
known as the Gramm-Rudman-Hollings Act) and subsequent
legislation (notably the Budget Enforcement Act of 1990,
which legislated that new spending increases be offset with
specific spending cuts). Between 1988 and 1994, Federal
R&D support per year declined in real terms from $75.0 billion
to $63.3 billion in constant 1996 dollars, but by 2000
had increased slightly to $65.1 billion. From 1996 to 2000,
however, the direction of Federal R&D had shifted; for example,
Federal support to academia, as a percentage of total
Federal support, had risen from 22.2 to 25.1 percent.
Federal Support by National Objective
Defense- and Space-Related R&D. Defense-related
R&D, as a proportion of the nations total R&D, has shifted
substantially. From 1953 to 1959, it rose from 48.0 to 54.3
percent; it then declined to a relative low of 24.3 percent in
1980. From 1980 to 1987, it climbed to 31.8 percent. It has
fallen substantially since then, reaching a low of 13.6 percent
in 2000. (See figure 4-4 .)
Space-related R&D funding, as a percentage of total R&D
funding, reached a peak of 20.9 percent in 1965, during the
height of the nations efforts to exceed the Soviet Union in
space travel. It then declined to a low of 3.0 percent in 1986.
By 1995, it climbed back up to 4.5 percent, before, once again,
slipping to 3.3 percent in 2000. Federal support for civilian-related
(that is, nondefense-nonspace) R&D programs, as a
percentage of total U.S. R&D, has been declining steadily
since 1994, when it was 11.6 percent. It was 9.4 percent in
2000, the lowest since 1962 (when it had been 9.1 percent).
In 1980, the Federal budget authority for defense-related
R&D was roughly equal to that for nondefense R&D. (See
insert in figure 4-5 .) As a result of modifications to U.S. security
measures in an evolving international arena, a defense-related
R&D expansion occurred in the early and mid-1980s.
For example, defense activities of the Department of Defense
(DOD) and the Department of Energy (DOE) accounted for
approximately one-half of the total Federal R&D budget authority in 1980. By 1986, such defense-related activities
peaked at 69 percent of the Federal R&D budget authority.
(See figure 4-5 .) This defense-related R&D expansion was
followed by a period of defense-related R&D reductions in
the late 1980s and the 1990s. Nondefense R&D, on the other
hand, has been increasing steadily since 1983. For fiscal year
(FY) 2001, the preliminary budget authority for defense R&D
and for nondefense R&D are about equal ($41.4 and $41.3
billion, respectively) and are 42.2 and 43.3 percent higher in
real terms than their respective 1980 levels.
Of all the money authorized to be spent by the Federal
Government on defense activities in 2001, according to the
Federal budget authority, R&D (most of which is development)
accounts for 14 percent. In contrast, R&D accounts for
about 3 percent of the Federal nondefense budget authority,
although many nondefense functions have much higher proportions.
(See text table 4-2 .) The budget allocation for defense
programs declined by an average real annual rate of 1.7
percent from FY 1986 to FY 2001.
Civilian-Related R&D. Since 1986, the Federal budget
authority for civilian-related R&D grew faster than that for
defense-related R&D. In particular, the budget allocation
for health- and space-related R&D increased substantially
between FY 1986 and FY 2001, with average real annual
growth rates of 5.8 and 5.0 percent, respectively. (As indicated
in figure 4-5 , most of this growth in the budget authority
for space-related R&D occurred between FY 1986
and FY 1991.)
With regard to nondefense objectives (or "budget functions"),
R&D accounts for 71.6 percent of funds for general
science of which 80.7 percent is devoted to basic research. (See
text table 4-2 .) R&D accounts for only 7.4 percent of funds for
natural resources and the environment, nearly all of which (91.7
percent) is devoted to applied R&D. Among funds for health,
R&D represents 11.1 percent, most of which (55.1 percent) is
devoted to basic research and nearly all of which is directed
toward National Institutes of Health (NIH) programs.
At first glance, the R&D budget authority for energy appears
to have declined rapidly in recent years, notably, from
$2.3 billion in FY 1997 to only $0.9 billion in FY 1998 in
constant 1996 dollars (as shown in figure 4-5 ). However, this
effect was not an actual decline in economic resources devoted
to energy R&D but merely the result of reclassification.
Beginning in FY 1998, several DOE programs were
reclassified from "energy" to "general science," so that the
drop in energy R&D was equally offset by a rise in general
science from $2.9 to $4.2 billion in constant 1996 dollars.
(See also sidebar, "The Federal Science and Technology Budget and Related Concepts.")
Understanding the Growth in Federal Health-Related
R&D. As illustrated in figure 4-5 , the budget allocation for
health-related R&D increased dramatically between FY 1982
and FY 2001, with an average real annual growth rate of 5.8
percent. As a result, health-related R&D rose from representing
roughly one-quarter (27.5 percent) of the Federal, nondefense
R&D budget allocation in FY 1982 to nearly one-half
(45.6 percent) by FY 2001. Many individuals in the science
community have expressed the concern that health-related
R&D has received the lions share of increases in Federal support
for R&D, whereas the other broad areas (e.g., space, general
science, energy, and the environment) have experienced
much lower growth, or even declines, in Federal support.
Although there is no consensus as to why health-related
research has continued to receive increased Federal support,
the current framework under which the Federal Government
provides support for health and medical research can be traced
back to important position statements made in the aftermath
of World War II. These positions were expressed in two important
reports: a 1947 report by J. Steelman entitled "Science
and Public Policy" and a 1945 report by V. Bush entitled
"ScienceThe Endless Frontier: A Report to the President
on a Program for Postwar Scientific Research." These reports
promoted support for other fields of science, but their specific
focus on the topic of health research has supported the
argument for growth in its Federal support since. In the early
1970s, medical research was promoted by the nations war on
cancer, and in the 1980s it was promoted by the nations (and
the worlds) concern over the acquired immune deficiency
syndrome (AIDS) epidemic (Jankowski 2001a). Growth in
health-related R&D in the 1990s has supported research on
cancer and AIDS as well, but a great deal of the new funding
has been directed toward other disease areas. Part of the reason
for the observed growth of health-related R&D stems from
opportunities afforded by biotechnology research advances,
but perhaps part of the growth comes also from the influence
of disease-specific lobbying groups.
R&D by Federal Agency
According to preliminary data provided by Federal agencies,
DOD will obligate the most funds among Federal agencies
for R&D support in FY 2001, $36.4 billion (44.6 percent)
of all Federal R&D obligations. (See text table 4-3 .) The bulk
of these funds ($32 billion) will be for development as compared
with basic or applied research. The agency obligating
the second largest amount in R&D support is the Department
of Health and Human Services (HHS) with $19.2 billion, most
of which ($10.4 billion) will be for basic research, followed
by the National Aeronautics and Space Administration
(NASA) with $9.6 billion (most of which will be for development),
DOE with $6.8 billion (nearly equally divided among
basic research, applied research, and development), and NSF
with $3.2 billion (almost all of which will be for basic research).
Together, these five agencies account for 92.2 percent
of all estimated Federal support for R&D in 2001: 93.1
percent of Federal support for basic research, 78.7 percent of
Federal support for applied research, and 97.7 percent of Federal
support for development.
The majority of HHSs R&D support (57 percent) is directed
toward academia. By preliminary estimates, HHS
accounted for 61.9 percent of all Federal R&D obligations
to universities and colleges, excluding university-administered
FFRDCs in FY 2001. (See text table 4-4 .) A total
of 23.6 percent is spent internally, mostly in NIH laboratories.
HHS also accounts for 71.6 percent of all Federal
R&D obligations for nonprofit organizations in FY 2001.
Approximately 6 percent of HHS R&D obligations are
slated for industrial firms.
NSF and DOD are the other leading supporters of R&D
conducted in academic facilities. (See text table 4-4 .) Universities
and colleges account for 82.8 percent of NSFs R&D
budget. The bulk of the remaining NSF budget is divided
between university-administered FFRDCs (6.1 percent), other
nonprofit organizations (5.8 percent), and industry (3.6 percent).
In FY 2001, DOD provides only 4.2 percent of its R&D
support to universities and colleges, in contrast to 69.5 percent
to industry and 23.6 percent to Federal intramural activities.
By comparison, DOE provides 10.4 percent of its support
to universities, 16.8 percent to industry, 12.8 percent to Federal intramural activities, and 35.3 percent to FFRDCs administered
by universities and colleges.
Of all Federal obligations of R&D funds to FFRDCs in
FY 2001, DOE accounted for 61.3 percent, NASA for another
19.8 percent, and DOD for 11.5 percent. More than
one-half (59.1 percent) of DOEs R&D support is directed
Unlike the other Federal agencies just mentioned, the U.S.
Department of Agriculture (USDA), Department of Commerce
(DOC), and Department of the Interior (DOI) spend most of
their R&D obligations internally. Most of the R&D supported
by these agencies is mission-oriented and conducted in their
own laboratories, which are run, respectively, by the Agricultural
Research Service, the National Institute for Standards and
Technology (NIST), and the U.S. Geological Survey.
In contrast to total R&D obligations, which are devoted
primarily to extramural R&D activities, only three agencies
had intramural R&D expenditures that exceeded $1 billion in
2001 (which includes the costs associated with planning and
administering extramural R&D programs): DOD, HHS (which
includes NIH), and NASA. Together, these three agencies account
for 76.2 percent of Federal intramural R&D.
Federal Support to Academia
The Federal Government has long provided the largest share
of R&D funds used by universities and colleges. In the early
1980s, Federal funds accounted for roughly two-thirds of the
academic total. By 1991, however, that share had dropped to
58.6 percent, and it has since remained between 58 and 60 percent.
Although this share of funding has not changed much in
recent years, the actual amount of funding, in real terms, has
grown on average by 5.1 percent per year between 1985 and
1994 and by 3.2 percent between 1994 and 2000. For more
information on academic R&D, see chapter 5.
Federal Funding to Industry
The greatest fluctuation in Federal support has been in
Federal funds to industry (excluding industry-administered
FFRDCs), which rose from a low of $7.4 billion in constant
1996 dollars in 1953 (when the NSF time series began) to a
relative maximum of $32.6 billion in 1966. (See figure 4-7 .)
It then declined to a relative minimum of $19.7 billion (constant
1996 dollars) in 1975; rose sharply to $37.1 billion by
1987; and fell sharply again to $21.1 billion by 1994. From
1994 to 2000, Federal support to industry has been relatively
unchanged, ranging from $18.4 to $21.1 billion in constant
1996 dollars. Most recently, between 1999 and 2000, there
was a 4.6 percent decline, in real terms, in Federal funds for
industrial R&D activities. Overall, the Federal share of
industrys performance has been steadily declining since its
peak of 56.7 percent reached in 1959. Much of that decline
can be attributed to declines in Federal funding to industry
for defense-related R&D activities.
Federal R&D financing for specific industrial sectors (including
the industry FFRDCs that belong to those sectors) has varied
markedly across time and across different industries. The Federal
Government provided $22.5 billion for industry R&D in
1999, the most recent year for which detailed data by industrial
category are available. Aerospace companies (or the industrial
sector "aircraft and missiles") received 40.5 percent of Federal
R&D funds provided to all industries. Consequently, 63.2 percent
of the aerospace industrys R&D dollars came from Federal
sources; the remaining 36.8 percent came from those companies
own funds. In comparison, the drugs and medicines sector
in 1999 financed 100 percent of its R&D from company funds;
machinery, 93.4 percent; computer and electronic products, 83.3
percent; transportation equipment other than aircraft and missiles,
95.3 percent; information services, 96.8 percent; and professional,
scientific, and technical services, 75.7 percent. See sidebar, "National Science Board Study on Federal Research Resources: A Process for Setting Priorities."
The Federal R&D Tax Credit
In addition to direct R&D funding and government-performed
research, the Federal Government provides a
research and experimentation (R&E) tax credit aimed at stimulating
research investment. In particular, the credit reduces
the costs of using internal funds to fund private R&D activities.
This tax credit on incremental research expenditures has
been in place in the United States since 1981, having been
renewed 10 times because of its temporary status. Most recently,
the R&E tax credit was reinstated in the Tax Relief
Extension Act of 1999 through June 2004. As of this writing,
the FY 2002 budget of the Bush administration proposes
to make the R&E credit permanent (U.S. OMB 2001a).
The standard policy justification for a tax stimulus is that
results from research, especially long-term research, often are
hard to capture privately, as others might benefit directly or
indirectly from it. Therefore, businesses might engage in levels
of research below those that would benefit a broader constituency,
such as a whole industry or the nation. In fact, many
developed economies have in place some form of tax credit
for research activity.
Structure of the Credit and Tax Data
A regular credit is provided for 20 percent of qualified
research above a base amount based on the ratio of research
expenses to gross receipts for 198488. Younger companies
follow different formulas. An alternative R&E credit is available
for corporate fiscal years that began after June 30, 1996.
Both the regular and the alternative R&E credits include provisions for basic research payments paid to qualified universities
or scientific research organizations above a certain base
period amount. Qualified research covers "research undertaken
to discover information, technological in nature, and useful in
the development of a new or improved business component"
(U.S. IRS 2000). Because the focus is on domestic research
performance, R&D conducted in the United States by foreign
firms also is covered, whereas R&D conducted abroad by foreign
affiliates of U.S. parent companies is not eligible.
The types of firms that claim the credit and their level of
participation are affected by the provisions of the credit, including
the definition of covered R&D and the spending base,
offsetting credits or caps, and its temporary status. In addition,
empirical studies of the effects of the tax credit also
have to separate purely accounting effects, such as possible
reclassification of activities or timing effects, from real
changes in research spending. Thus, to assess precisely
whether a particular tax incentive is inducing the kinds of
research activities targeted by the credit is difficult at best.
Nevertheless, Hall and Van Reenen (2000), based on a review
of U.S. studies from the early 1980s to late 1990s, conclude
that a dollar in tax credit likely stimulates a dollar of
additional R&D. As an empirical generalization, however, this
conclusion might not apply fully to certain segments of R&D
performers, such as small companies or startup firms.
Total R&E credit claims and number of returns applying
for the credit are available from Statistics of Income, Internal
Revenue Service (IRS). In 1998 (the latest year for which these
data are available), more than 9,800 returns claimed $5.208
billion in R&E credits, up 18.4 percent from 1997 dollar claims
(U.S. IRS 2001). The unusual doubling of the credit over
199697 followed a 12-month gap in the credit. (See text table
4-5 ). However, not all R&E claims are allowed because there
is a limitation on the reduction of a companys total tax liability. Most claimants applied for the regular 20 percent credit. In
1998, total basic research credits were $398 million, or 7.6 percent
of the total R&E credit, claimed by 551 returns.
Nearly three-fourths of R&E credit claims come from
manufacturing corporations in any given year. An analysis by
Whang (1998) using 1995 tax data identified pharmaceuticals,
motor vehicles, aircraft, electronics, and computers as
the industries with the largest claims. The author also reported
that firms with at least $250 million in assets accounted for
three-fourths of the dollar value of all credit claims for the
same tax year. Another study, based on a 1998 survey sponsored
by the Small Business Administration (SBA), found that
only 71 of 194 (37 percent) small firms that responded to a
question on the R&E tax credits reported claiming the credit
(Cordes, Hertzfeld, and Vonortas 1999). Furthermore, only
28 of the survey firms claiming the tax credit reported that
the credit stimulated additional R&D by an amount equal to
or more than the amount of the credit. Of the small firms not
claiming the credit, approximately one-half failed to exceed
the statutory base for the credit, and about one-fourth considered
the tax credit procedures too complicated to allow their
Federal Budget Impact
In the language of the Federal budget, R&E credits fall in
the category of tax expendituresgovernment revenue losses
due to preferential provisions. According to the Treasury Department,
the largest tax expenditures are those associated with
the individual income tax. Tax expenditures from corporate
income taxes relate mostly to cost recovery for certain investments,
including research activities. The outlay-equivalent
measure is one of three accounting methods used to estimate
these tax expenditures. This method translates R&E credits
in terms comparable to Federal R&D outlays. This allows a
comparison of the cost of the tax expenditure with that of a
direct Federal outlay (U.S. OMB 2001a).
According to this measure, tax credit claims in 1998 were
equivalent to outlays of $3.270 billion, or 4.6 percent of direct
Federal R&D outlays in FY 1998 (See figure 4-8 .) Although
R&E claims data for tax year 2000 are not available, the
credit generated an estimated outlay equivalent of $2.510 billion,
or 3.4 percent of Federal R&D outlays in FY 2000. In constant
1996 dollars, the average outlay equivalent over 19812000
is $2.1 billion.
Historical Trends in Non-Federal Support
R&D financing from non-Federal sources grew by 5.9 percent
per year after inflation between 1953 and 1980. Between
1980 and 1985, concurrent with gains in Federal R&D spending,
it grew by an even faster rate of 7.6 percent per year in real terms. It then slowed to 4.4 percent between 1985 and
1990 and to 3.3 percent between 1990 and 1995 but rose to
8.2 percent over the 19952000 period.
As already discussed, most non-Federal R&D support is
provided by industry. Of the 2000 non-Federal support total
($195 billion), 92.8 percent ($181 billion) was company
funded. Industrys share of national R&D funding first surpassed
that of the Federal Government in 1980, and it has
remained higher ever since. From 1980 to 1985, industrial
support for R&D, in real dollars, grew at an average annual
rate of 7.7 percent. This growth was maintained through both
the mild 1980 recession and the more severe 1982 recession.
(See figure 4-1 .) Key factors behind increases in industrial
R&D included a growing concern with international competition,
especially in high-technology industries; the increasing
technological sophistication of products, processes, and
services; and general growth in defense-related industries,
such as electronics, aircraft, and missiles.
Between 1985 and 1994, growth in R&D funding from
industry was slower, averaging only 3.1 percent per year in
real terms.This slower growth in industrial R&D funding was
only slightly greater than the real growth of the economy over
the same period (in terms of real GDP), which was 2.8 percent.
In contrast, from 1994 to 2000, non-Federal R&D support
grew in real terms by 8.6 percent per year compared with
4.0 percent for the economy overall.
R&D funding from other non-Federal sectors, namely, academic
and other nonprofit institutions and state and local governments, has been more consistent over time. It grew in real
terms at average annual rates of 6.4 percent between 1980
and 1985, 8.5 percent between 1985 and 1990, 3.8 percent
between 1990 and 1995, and 5.5 percent between 1995 and
2000. The level of $14.0 billion in funding in 2000 was 4.9
percent higher in real terms than its 1999 level of $13.0 billion.
Most of these funds had been used for research performed
within the academic sector.