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Early Data Show Decline in 1995 R&D Spending

January 1996

While the final tallies are not yet in, researchers predict that U.S. research and development (R&D) expenditures declined in 1995.

The total is expected to reach $171 billion, according to a report from the Division of Science Resources Studies. "After adjusting for expected inflation, this 1995 figure represents a 2 percent decrease in spending," writes John Jankowski, Jr., Program Director, who used surveys conducted by NSF and others in making his predictions.

The expected decline is due to decreased industrial and Federal support, he writes.

In 1995, industry accounted for $102 billion, or 59% of total R&D expenditures, while the Federal government spent $61 billion, or 36% of the total. After taking inflation into account, funding from these two groups declined by 1% and 3% respectively.

The remaining 5%, or $9 billion, was spent by State governments, universities and colleges, and other nonprofit organizations. "Academia is the only sector in which inflation-adjusted R&D performance is expected to increase in 1995, although by a mere .4 percent," writes Jankowski.

The 1995 decline in R&D spending is the continuation of a trend that began in the early part of this decade. After a period of fast growth in the early 1980s, R&D expenditures slowed. By 1992, the tide had turned, and both the Federal government and industry were spending less on R&D in real terms.

International R&D spending is also in decline, Jankowski writes. Due to governmental budgetary constraints, R&D spending has dropped in both Germany and Japan, the two largest investors in R&D after the United States.

For a copy of this data brief, call SRS at (703) 292-8774, or send an e-mail to srsweb@nsf.gov.

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