Financial Resources for Academic R&D
- Academic R&D Within the National R&D Enterprise
- Major Funding Sources
- Expenditures by Field and Funding Source
- Federal Support of Academic R&D
- An Institutional Look at Academic R&D
- Academic R&D Equipment
- Academic R&D Infrastructure
Academic R&D is a significant part of the national R&D enterprise. To carry out world-class research and advance the scientific knowledge base, U.S. academic researchers require financial resources, stability of research support, and research facilities and instrumentation that facilitate high-quality work. Several funding indicators bear on the state of academic R&D, including:
- The level and stability of overall funding
- The sources of funding and changes in their relative shares
- The distribution of funding among the different R&D activities (basic research, applied research, and development)
- The distribution of funding among S&E broad and detailed fields
- The distribution of funding across institutions that perform academic R&D and the extent of their participation
- The role of the federal government as a supporter of academic R&D and the particular roles of the major federal agencies funding this sector
- The state of the physical infrastructure (research equipment and facilities)
Individually and in combination, these factors influence the evolution of the academic R&D enterprise and, therefore, are the focus of this section. The main findings are as follows:
- Growth in federal funding of academic R&D has slowed.
- Continued but differential increases in funding for all fields resulted in a relative shift in the distribution of funds, with increasing shares for the life sciences, engineering, and the computer sciences.
- The field of medical sciences experienced the largest increase in the past several decades, its share having risen by 10 percentage points since 1975.
- R&D activity expanded to a wider set of institutions, but the concentration of funds among the top research universities remained relatively constant over the past two decades.
- The share of all annual R&D expenditures spent on research equipment reached a historic low.
- Growth in academic S&E research space continued, particularly in the medical and biological sciences.
For a discussion of the nature of the data used in this section, see sidebar, "Data Sources for Financial Resources for Academic R&D."
Academic R&D Within the National R&D Enterprise
Academia plays an important role in the nation’s overall R&D effort, especially by contributing to the generation of new knowledge through basic research. Since 1998, academia has accounted for more than half of the basic research performed in the United States.
In 2006, U.S. academic institutions spent $48 billion, or $41 billion in constant 2000 dollars, on R&D. Academia’s role as an R&D performer increased during the past three decades, rising from about 10% of all R&D performed in the United States in the early 1970s to an estimated 14% in 2006
Character of Work
Academic R&D activities are concentrated at the research (basic and applied) end of the R&D spectrum and do not include much development activity. For the definitions used in National Science Foundation (NSF) surveys and a fuller discussion of these concepts, see chapter 4 sidebar, "Definitions of R&D." In 2006, an estimated 96% of academic R&D expenditures went for research (75% for basic and 22% for applied) and 4% for development
Between 1970 and 2006, the average annual R&D growth rate (in constant 2000 dollars) of the academic sector (4.3%) was higher than that of any other R&D-performing sector except the nonprofit one (4.6%). (See
Major Funding Sources
The academic sector relies on a variety of funding sources for support of its R&D activities, although the federal government has consistently contributed the majority of the funds
Federal support of academic R&D is discussed in detail later in this section. The following list summarizes the contributions of other sectors to academic R&D:
- Institutional funds. In 2006, institutional funds from universities and colleges constituted the second largest source of funding for academic R&D, accounting for 19% ($9.1 billion), slightly below a peak of 20% in 2001
(appendix table 5-2). Institutional funds encompass two categories: (1) institutionally financed organized research expenditures and (2) unreimbursed indirect costs and related sponsored research. They do not include departmental research and thus exclude funds (notably for faculty salaries) in cases in which research activities are not separately budgeted.
The share of support represented by institutional funds increased steadily between 1972 (12%) and 1991 (19%) but since then has remained fairly stable at roughly one-fifth of total funding. Institutional R&D funds may be derived from (1) general-purpose state or local government appropriations (particularly for public institutions) or federal appropriations; (2) general-purpose funds from industry, foundations, or other outside sources; (3) tuition and fees; (4) endowment income; and (5) unrestricted gifts. Other potential sources of institutional funds are income from patents or licenses and income from patient care revenues. (See section "Patent-Related Activities and Income" later in this chapter for a discussion of patent and licensing income.)
- State and local government funds. State and local governments provided 6% ($3.0 billion) of academic R&D funding in 2006. Even though their absolute funding total continues to rise annually, the nonfederal government share has been slowly declining since its peak of 10.2% in 1972 to 1974. This share only reflects funds that state and local governments directly target to academic R&D activities. It does not include general-purpose state or local government appropriations that academic institutions designate and use to fund separately budgeted research or cover unreimbursed indirect costs. Consequently, the actual contribution of state and local governments to academic R&D is not fully captured here, particularly for public institutions. (See chapter 8, "State Indicators," for some indicators of academic R&D by state.)
- Industry funds. After a 3-year decline between 2001 and 2004, industry funding of academic R&D increased for the second year in a row, to $2.4 billion in 2006. After reaching a high of 7% in 1999, industry’s share has remained at 5% since 2003. Industrial support accounts for the smallest share of academic R&D funding, and support of academia has never been a major component of industry-funded R&D. (See
appendix table 4-5for time- series data on industry-reported R&D funding.)
- Other sources of funds. In 2006, other sources of support accounted for 7% ($3.2 billion) of academic R&D funding, a level that has stayed about the same since 1972. This category of funds includes grants and contracts for R&D from nonprofit organizations and voluntary health agencies and gifts from private individuals that are restricted by the donor to the conduct of research, as well as all other sources restricted to research purposes not included in the other categories.
Expenditures by Field and Funding Source
Examining and documenting academic R&D investment patterns across disciplines allows assessment of the funding balance in the academic R&D portfolio. For a discussion of non-S&E R&D expenditures see sidebar, "Non-S&E R&D." In 2006, the life sciences continued to receive the largest share of investment in academic R&D, accounting for roughly 60% of all expenditures and also of federal and nonfederal expenditures
The distribution of academic R&D expenditures across the various broad S&E fields has remained relatively constant since 1975
More significant shifts in the relative shares of academic R&D expenditures occurred within the life sciences subfields. The medical sciences’ share increased by 10 percentage points between 1975 and 2006, from 24% to 33%, and the share for agricultural sciences declined by 5 percentage points from 11% to 6%
The proportion of academic R&D expenditures funded by the federal government also varies significantly by field
The federally financed proportion of R&D spending declined in all of the broad S&E fields between 1975 and 1990
Among the specific agency sources discussed in the next section, the Department of Health and Human Services (HHS), including NIH, provided the largest share of federal funding in FY 2006 ($17 billion), primarily in support of the medical and biological sciences
Federal Support of Academic R&D
The federal government continues to provide the majority of the funding for academic R&D. Its overall contribution is the combined result of discrete funding decisions for several key R&D-supporting agencies with differing missions. Most of the funding provided by the federal government to academia reflects decisions arrived at through a competitive peer review process. Some of the funds are from long-established programs, such as those of the U.S. Department of Agriculture (USDA), that support academic research through formula funding rather than peer review, and other funds are the result of appropriations that Congress directs federal agencies to award to projects that involve specific institutions. Infrastructure support is often provided through user facilities in federal laboratories, such as those supported by the Department of Energy (DOE). Examining and documenting the funding patterns of the key funding agencies is important to understanding both their roles and that of the federal government overall. For a discussion of a major federal program with the objective of improving the geographical distribution of federal obligations for academic R&D, see sidebar, "EPSCoR: The Experimental Program to Stimulate Competitive Research."
Top Agency Supporters
Six agencies are responsible for most of the federal obligations for academic R&D, providing an estimated 95% of the $25 billion obligated in FY 2007
Total federal obligations for academic R&D in constant 2000 dollars, as well as those for DOE, NASA, NIH, and NSF, peaked in 2004 at $22.3 billion. Between 1990 and 2004, NIH’s funding of academic R&D increased most rapidly, with an estimated average annual growth rate of 6.4% per year in constant 2000 dollars, increasing its share of federal funding from 52% to 63%. NASA and NSF experienced the next highest annual rates of growth during this period: 4.5% and 4.2%, respectively. Between 2004 and 2007, total obligations in constant dollars declined by an estimated 2% per year, and the decline occurred in all six major funding agencies.
Agency Support by Field
Federal agencies emphasize different S&E fields in their funding of academic research. Several agencies concentrate their funding in one field (e.g., HHS and USDA in the life sciences and DOE in the physical sciences), whereas NSF, NASA, and DOD have more diversified funding patterns
In FY 2005, NSF was the lead federal funding agency for academic research in the physical sciences (36% of total funding); mathematics (50%); the computer sciences (71%); and the earth, atmospheric, and ocean sciences (39%)
An Institutional Look at Academic R&D
The previous sections examined R&D for the entire academic sector. This section looks at some of the differences across institution types.
Funding for Public and Private Universities and Colleges
Although public and private universities rely on the same major sources to fund their R&D projects, the relative importance of those sources differs substantially for these two types of institutions
Both public and private institutions received approximately 5% of their R&D support from industry in 2006. The share of total R&D expenditures funded by all other sources was also fairly comparable between public and private institutions, at 6% and 7%, respectively.
Distribution of R&D Funds Across Academic Institutions
Of the 650 institutions that reported R&D expenditures of at least $150,000 in 2006, the top 20 in terms of total R&D expenditures accounted for 30% of total academic R&D spending. The top 100 institutions accounted for 80% of all academic R&D expenditures in 2006.
The concentration of academic R&D funds among the top 100 institutions has stayed relatively constant over the past two decades
It should be noted that the composition of the universities in each of these groups is not the same over time; mobility occurs between groups as universities increase or decrease their R&D activities. Three of the top 10 institutions in 1986 were not in the top 10 in 2006, and 5 of the top 20 institutions in 1986 were not in the top 20 in 2006. The next section points to an increasing number of academic institutions receiving federal support for their R&D activities between 1972 and 2005.
Spreading Institutional Base of Federally Funded Academic R&D
The number of academic institutions receiving federal support for their R&D activities increased fairly steadily between 1971 and 1994, when it reached a peak of 902 institutions. Between 1995 and 2005, the number of institutions receiving federal support fluctuated between 789 and 891
Academic R&D Equipment
Research equipment is an integral component of the academic R&D enterprise. This section examines expenditures on research equipment, the federal role in funding these expenditures, and the relation of equipment expenditures to overall R&D expenditures.
In 2006, about $1.8 billion in current funds was spent for academic research equipment. About 83% of these expenditures were concentrated in three fields: the life sciences (41%), engineering (24%), and the physical sciences (18%)
Federal funds for research equipment are generally received either as part of research grants or as separate equipment grants, depending on the funding policies of the particular federal agencies involved. The share of federal funding for research equipment varies significantly by field. In 2006, sociology received federal funding for 29% of its research equipment expenditures. In contrast, federal funding accounted for 82% of equipment expenditures in the field of astronomy
R&D Equipment Intensity
R&D equipment intensity is the percentage of total annual R&D expenditures from current funds devoted to research equipment. This proportion has been declining steadily since reaching a peak of 7% in 1985. By 2006, it had declined to 4%
Academic R&D Infrastructure
The physical infrastructure of academic institutions is critical to supporting R&D activities. Traditional indicators of the status of the research infrastructure are the amount of research space currently available and the amount of investment in future facilities.
In addition to the traditional "bricks and mortar" research infrastructure, "cyberinfrastructure" is playing an increasingly important role in the conduct of S&E research. Technological advances are significantly changing S&E research methods. In some cases, advanced technology is already changing the role of traditional bricks and mortar facilities. According to the NSF Advisory Panel on Cyberinfrastructure, these advances are not simply changing the conduct of science but are revolutionizing it (NSF 2003). The panel defined cyberinfrastructure as the "infrastructure based upon distributed computer, information and communication technology" (NSF 2003, p 1.2). The report discusses the current and potential future importance of cyberinfrastructure, stating that "digital computation, data, information and networks are now being used to replace and extend traditional efforts in science and engineering research" (NSF 2003, p 1.1).
How the relationship between cyberinfrastructure and traditional bricks and mortar infrastructure will develop is unknown. For example, access to high-quality research facilities may become available to researchers located at institutions where traditional research space has not been available. Some institutions have begun conducting research not in their own laboratories or research facilities but through networking and/or high-performance computing, communicating with research facilities thousands of miles away or accessing very large databases generated by advanced data collection technologies.
Bricks and Mortar
Research Space. Research-performing colleges and universities continued to expand their stock of research space in FY 2005, but at a significantly slower rate than the previous 2-year period
In FY 2005, research space increased in all S&E fields except the earth, atmospheric, and ocean sciences, which experienced a 3% decline. Additionally, for the first time in more than a decade, the amount of research animal space declined.
Two of the three fields of science that experienced the largest percentage of increase in research space in FY 2003 again had the largest percentage of increase in FY 2005: the computer sciences and medical sciences. From a relatively modest base, the computer sciences had the largest increase (32%), which resulted in 4.1 million NASF. In the decade between 1996 and 2005, space for the computer sciences grew by 105%.
During the same period, research space in psychology, the social sciences, mathematics, and the medical sciences also increased by more than 50%. However, except for the medical sciences, all of these fields also have the smallest amount of total space relative to the other fields. Between 1996 and 2005, the physical sciences and earth, atmospheric, and ocean sciences experienced the least amount of growth in research space.
Since survey inception, the greatest increases in research space have occurred in the biological sciences and medical sciences. The proportion of total space dedicated to these two fields has remained fairly stable from year to year, ranging between 38% and 42%. However, in 2005, the medical sciences surpassed the biological sciences in research space for the first time (39.7 million NASF versus 38.5 million NASF, respectively).
Construction of Research Space. Total new S&E research space being constructed in FY 2004–05 was also dominated by the biological and medical sciences. Sixty-four percent of newly built research space and 67% of construction funds were in the biological and medical sciences
Institutions anticipated a decline in the amount of newly constructed research space in the earth, atmospheric, and ocean sciences in FY 2006–07. This follows an absolute decline in space in this field during the previous 2-year period. The field of earth, atmospheric, and ocean sciences is the only one that experienced a decline in NASF since FY 2003–05 and the only field that anticipated a decline in new construction in FY 2006–07.
Total dollars invested in new construction of research space declined in FY 2005 for the first time in a decade, by 17% to $6.1 billion
As a share of total expenditures for new construction, only the biological and medical sciences experienced an increase between FY 1987–88 and FY 2004–05, from 23% to 33% for the biological sciences and from 25% to 34% for the medical sciences. Psychology and mathematics remained about the same while all other fields experienced a decline. Institutions estimated that by FY 2006–07, the share of new construction for the biological sciences would decline to 29% and the share for the medical sciences to 28%. The share of total expenditures for research space in the earth, atmospheric, and ocean sciences ($69 million) was estimated to decline to less than 1%. The largest percentage point increase in share of funds for new construction in FY 2006–07 was estimated for the physical sciences (from 7% to 10%).
Source of Funds. Institutions use one or more sources to fund their capital projects, including the federal government, state or local governments, and the institutions’ own funds
Between FY 2002–03 and FY 2004–05, the federal share increased for the first time since FY 1994–95, rising from 5% to 7%. During the same period, the share of construction funds from state and local governments decreased by 9 percentage points to 23% in FY 2004–05. This was the largest percentage point decline in the state and local share since FY 1986–87, except for the 2-year period from FY 1994 to FY 1996, when the decrease was also 9 percentage points. Institutions generally accommodated this decrease in state and local funds by increasing the institutional share of funds and decreasing their total expenditures. During FY 2004–05, the institutional share rose to the highest percentage of total funds for construction (69%) since FY 1986–87. During this period, the institutional share of funds expended on repair/renovation also increased to its highest percentage since FY 1986–87.
Networking resources are a key component of cyberinfrastructure. Networks allow researchers to communicate and transfer data both within a specific institution’s boundaries and with others around the world. At many institutions, the same networks are used for multiple academic functions such as instruction, research, and administration.
All academic institutions today have connections to the commodity Internet (Internet1), the network commonly known as the Internet. Although Internet connections are used for many purposes (e-mail, buying books from the campus bookstore, transfer of databases), conducting research can require greater network capabilities than other activities.
One common indicator of network capability is bandwidth, or speed. A network’s bandwidth can affect the amount and type of research activity accomplished through the network. The greater the amount of bandwidth, the more capable the network is in handling both large amounts of data and communication traffic and more demanding or sophisticated communications. Although a slow network connection might well be able to transmit scientific articles, accessing scientific instruments and databases located thousands of miles away demands (among other requirements) higher bandwidth.
Internet Bandwidth. In FY 2005, 43% of academic institutions reported the total of their commodity internet (Internet1) and Abilene (often called Internet2) bandwidth to be greater than 155 megabits
High-Performance Network Connections. In addition to their Internet1 connections, institutions may also be connected to one or more high-performance networks. By FY 2005, the majority of institutions had connected to Abilene, a high-performance network dedicated to research led by a consortium of universities, governments, and private industry; only 5% of doctorate-granting institutions did not have an Abilene connection. By FY 2006, 76% of all institutions anticipated having a connection, a 17% increase since FY 2003. Furthermore, 32% of those anticipating Abilene connections in FY 2006 also anticipated Abilene bandwidth of 1 gigabit or faster.
Institutions may also be connected to the National Lambda Rail, a national fiber optic infrastructure supporting multiple networks for the research community. In just 1 year, the number of institutions connected to the National Lambda Rail is expected to increase by 200%, from 10% with connections in FY 2005 to 31% in FY 2006. Finally, about 13% of institutions anticipated being connected to at least one federal government high-performance network, such as NASA’s Research and Engineering Network (NREN) or DOE’s Energy Sciences Network (ESnet), by FY 2006.
The majority of institutions (63%) obtained at least some of their bandwidth, whether Internet1 or high performance, through a consortium in FY 2005, and additional institutions anticipated doing so in FY 2006 (68%). All but one of the institutions reporting Internet1 connections of 1 gigabit or faster received their bandwidth through a consortium. Although institutions reported a variety of consortia, many are state and/or regional research and education networks. For example, the list of consortia includes the Metropolitan Research and Education Network (MREN), the Corporation for Education Network Initiatives in California (CENIC), Merit Network, and the New York State Education and Research Network (NYSERNet).
Internal Institutional Networks. Concurrent with increasing connection speeds to external networks such as Internet1, institutions are also increasing their internal network speeds
 Federally funded research and development centers (FFRDCs) associated with universities are tallied separately and are examined in greater detail in chapter 4. FFRDCs and other national laboratories (including federal intramural laboratories) also play an important role in academic research and education, providing research opportunities for both students and faculty at academic institutions.
 For this discussion, an academic institution is generally defined as an institution that has a doctoral program in science or engineering, is a historically black college or university that expends any amount of separately budgeted R&D in S&E, or is some other institution that spends at least $150,000 for separately budgeted R&D in S&E.
 Despite this delineation, the term "R&D" (rather than just "research") is primarily used throughout this discussion because data collected on academic R&D do not always differentiate between research and development. Moreover, it is often difficult to make clear distinctions between basic research, applied research, and development.
 The academic R&D reported here includes separately budgeted R&D and related recovered indirect costs, as well as institutional estimates of unreimbursed indirect costs associated with externally funded R&D projects, including mandatory and voluntary cost sharing.
 Federal grants and contracts and awards from other sources that are passed through state and local governments to academic institutions are credited to the original provider of the funds.
 This follows a standard of reporting that assigns funds to the entity that determines how they are to be used rather than to the one that necessarily disburses the funds.
 It also likely includes some amount of research funding from the above-named sources that universities are unable to accurately code for reporting to the Academic R&D Survey of Research and Development Expenditures at Universities and Colleges.
 The medical sciences include fields such as pharmacy, neuroscience, oncology, and pediatrics. The biological sciences include fields such as microbiology, genetics, epidemiology, and pathology. These distinctions may be blurred at times because boundaries between fields often are not well defined.
 In this section of the chapter and section, "Doctoral Scientists and Engineers in Academia," the broad S&E fields refer to the computer sciences, environmental sciences (sometimes referred to as "earth, atmospheric, and ocean sciences"), life sciences, mathematical sciences, physical sciences, psychology, social sciences, other sciences (those not elsewhere classified), and engineering. The more disaggregated S&E fields are referred to as "subfields." The third section, "Outputs of S&E Research: Articles and Patents," groups the broad fields and subfields slightly differently (see sidebar, "Bibliometric Data and Terminology" and appendix table 5-32).
 The discussion of federal support for academic R&D in the previous section is based on reporting by performer, i.e., academic institutions. This section is based on reporting by funder—the government agencies that provide R&D support to academic institutions. Performing and funding series may differ for many reasons. For a more detailed discussion of the differences between these two sources, see chapter 4 sidebar, "Tracking R&D: Gap Between Performer- and Source-Reported Expenditures."
 The recent creation of the Department of Homeland Security (DHS) should have major implications for the future distribution of federal R&D funds, including federal academic R&D support, among the major R&D funding agencies. DHS's Directorate of Science and Technology is tasked with researching and organizing the scientific, engineering, and technological resources of the United States and leveraging these existing resources into technological tools to help protect the homeland. Universities, the private sector, and the federal laboratories are expected to be important DHS partners in this endeavor.
 Another hypothesis is that some of the difference may be due to many public universities not having the incentive to negotiate full recovery of indirect costs of research because the funds are frequently captured by state governments.
 Although the number of institutions receiving federal R&D support between 1973 and 1994 increased overall, a rather large decline occurred in the early 1980s, most likely due to the fall in federal R&D funding for the social sciences during that period.
 Part of the decline in R&D equipment intensity may be due to a threshold effect, i.e., institutions not reporting purchases of equipment under a certain dollar threshold. There is some evidence that the minimum dollar value at which purchases of research equipment are reported in the Survey of Research and Development Expenditures at Universities and Colleges has been increasing over the years, leading to some equipment that would have been reported in earlier years not being reported in more recent years.
 Research-performing academic institutions are defined as colleges and universities that grant degrees in science or engineering and expend at least $1 million in R&D funds. Each institution's R&D expenditure is determined through the NSF Survey of Research and Development Expenditures at Universities and Colleges.
 Research space here is defined as the space used for sponsored R&D activities at academic institutions that is separately budgeted and accounted for. Research space is measured in NASF, the sum of all areas on all floors of a building assigned to, or available to be assigned to, an occupant for a specific use, such as research or instruction. NASF is measured from the inside faces of walls. Multipurpose space that is at least partially used for research is prorated to reflect the proportion of time and use devoted to research.
 Some of this space will likely replace existing space and therefore will not be a net addition to existing stock.
 Institutional funds may include operating funds, endowments, tax-exempt bonds and other debt financing, indirect costs recovered from federal grants/contracts, and private donations.
 Some additional indirect federal funding may come through overhead on grants and/or contracts from the federal government. To the extent these funds are ultimately used for renovation or construction of facilities, they are reported as institutional funding because it is the institution that decides how they are spent.
 Discussion of cyberinfrastructure is limited to networking because the Survey of Science and Engineering Research Facilities addresses only computing and networking capacity for research and instructional activities rather than all facets of cyberinfrastructure.
 The "bricks and mortar" section of the Survey of Science and Engineering Research Facilities asks institutions to report on their research space only. The reported figures therefore do not include space used for other purposes such as instruction or administration. In the cyberinfrastructure section of the survey, however, respondents were asked to identify all of their cyberinfrastructure resources, regardless of whether these resources were used for research.
 There have been discussions of a possible merger of Abilene and National Lambda Rail.