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News Release 18-093

Businesses spent $375 billion on R&D performance in US in 2016

R&D spending increased 5.3 percent from 2015

A scientist holds an electronic circuit with a set of tweezers.

Businesses spent a total of $375 billion on research and development performance in the US in 2016.


October 12, 2018

Businesses spent a total of $375 billion on research and development (R&D) performance in the United States in 2016, an increase of 5.3 percent from 2015. Funding from companies' own sources was $318 billion in 2016, an increase of 7 percent from 2015. Funding from other sources was $57 billion in 2016 and $59 billion in 2015.

Of the $375 billion companies spent on R&D in 2016, $25 billion (7 percent) was spent on basic research, $61 billion (16 percent) on applied research, and $289 billion (77 percent) on development, a similar distribution to spending in 2015.

The federal government was the chief source of external funding for R&D across all industries, accounting for $24 billion of the $57 billion of external funding. Next among external funders were foreign companies ($18 billion) and other U.S. companies ($14 billion).

Most of the federal funding came from the Department of Defense ($16 billion). Of all federal funding, 92 percent went toward aerospace products and parts ($13 billion), professional, scientific and technical services ($5 billion), and computer and electronic products ($4 billion).

Businesses that performed or funded R&D employed 19.3 million people in the United States in 2016. Approximately 1.5 million (8 percent) were R&D employees.

Companies with 250 to 24,999 domestic employees performed 53 percent of the nation's total business R&D. These companies employed 46 percent of those who worked for R&D-performing or R&D-funding companies and employed 54 percent of R&D employees in the United States.

The largest companies (those with 25,000 or more domestic employees) performed 36 percent of the nation's total business R&D. They employed 46 percent of those who worked for R&D-performing or R&D-funding companies and employed 26 percent of R&D employees in the United States.

Micro-, small- and medium-sized companies (those with 5 to 249 domestic employees) performed 11 percent of the nation's total business R&D in 2016. These companies employed 9 percent of employees who worked for R&D-performing or R&D-funding companies and 20 percent of the 1.5 million employees engaged in business R&D in the United States.

U.S. companies that performed or funded R&D reported domestic net sales of $9 trillion in 2016.

Business R&D is concentrated in a relatively small number of states. In 2016, businesses in California accounted for 33 percent of companies' R&D spending. States with the next highest amounts of R&D spending were Washington and Massachusetts, each with 6 percent of R&D spending, and Michigan and Texas, each with 5 percent.

The National Center for Science and Engineering Statistics (NCSES) within the National Science Foundation (NSF) and the U.S. Census Bureau developed and cosponsored the Business R&D and Innovation Survey (BRDIS).

The 2016 BRDIS cycle will be the survey's final cycle in its current form. NCSES and the U.S. Census Bureau are undertaking a separate, more comprehensive collection of data on business innovation activities to be included in the Annual Business Survey they cosponsor. For 2017 and beyond, BRDIS will become the new Business Research and Development Survey (BRDS).

For further breakdowns of 2016 data and data tables, please see the report.

-NSF-

Media Contacts
Stanley Dambroski, NSF, (703) 292-7728, email: sdambros@nsf.gov

Program Contacts
Raymond M. Wolfe, NSF, (703) 292-7789, email: rwolfe@nsf.gov

The National Science Foundation (NSF) is an independent federal agency that supports fundamental research and education across all fields of science and engineering. In fiscal year (FY) 2018, its budget is $7.8 billion. NSF funds reach all 50 states through grants to nearly 2,000 colleges, universities and other institutions. Each year, NSF receives more than 50,000 competitive proposals for funding and makes about 12,000 new funding awards.

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