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Tabular data related to this report are also available in Appendix Tables 4-1 to 4-9 of Science and Engineering Indicators 2016 (https://www.nsf.gov/statistics/2016/nsb20161/#/data/appendix/chapter-4).


by Mark Boroush[1]

Research and development performed in the United States totaled $456.1 billion in 2013, according to new data from the National Center for Science and Engineering Statistics, National Science Foundation (NSF) (table 1). This is compared to $435.3 billion in 2012 (revised downward from an earlier estimate) and $427.8 billion in 2011. In 2008—just before the onset of the main economic effects of the national and international financial crisis and the Great Recession—U.S. R&D totaled $407.0 billion.

TABLE 1. U.S. R&D expenditures, by performing sector and source of funding: 2008–13

FFRDCs = federally funded research and development centers.

a Data for 2013 include some estimates and may later be revised.
b Includes expenditures of federal intramural R&D as well as costs associated with administering extramural R&D.
c Some components of the R&D performed by other nonprofit organizations are projected and may later be revised.

NOTES: Data are based on annual reports by performers, except for the nonprofit sector. Expenditure levels for academic, federal government, and nonfederal government performers are calendar-year approximations based on fiscal year data. Gross domestic product implicit price deflators for 2009 were used to convert current to constant dollars.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, National Patterns of R&D Resources (annual series).

Table 1 Source Data: Excel file

Sector 2008 2009 2010 2011 2012 2013a
Current $millions
All performing sectors 406,952 405,136 408,197 427,833 435,347 456,095
Business 290,680 282,393 278,977 294,092 302,251 322,528
Federal government 45,649 47,363 49,955 52,668 51,318 49,859
Federal intramuralb 29,839 30,560 31,970 34,950 34,017 33,026
FFRDCs 15,810 16,804 17,985 17,718 17,301 16,833
Nonfederal government 343 405 490 493 468 467
Universities and colleges 53,917 56,972 60,374 62,446 63,284 64,680
Other nonprofit organizationsc 16,363 18,002 18,401 18,134 18,026 18,561
All funding sources 406,952 405,136 408,197 427,833 435,347 456,095
Business 258,131 246,770 248,314 266,606 275,892 297,279
Federal government 119,113 127,180 127,559 128,039 124,956 121,808
Nonfederal government 4,257 4,287 4,287 4,355 4,105 4,113
Universities and colleges 11,640 11,917 12,105 12,951 14,136 15,240
Other nonprofit organizationsc 13,811 14,983 15,932 15,882 16,258 17,655
Constant 2009 $millions
All performing sectors 410,043 405,136 403,270 414,122 413,961 427,323
Business 292,888 282,393 275,610 284,667 287,403 302,182
Federal government 45,995 47,363 49,352 50,981 48,797 46,714
Federal intramuralb 30,066 30,560 31,584 33,830 32,346 30,943
FFRDCs 15,930 16,804 17,768 17,150 16,451 15,771
Nonfederal government 345 405 484 477 445 438
Universities and colleges 54,327 56,972 59,645 60,445 60,176 60,600
Other nonprofit organizationsc 16,487 18,002 18,179 17,552 17,141 17,390
All funding sources 410,043 405,136 403,270 414,122 413,961 427,323
Business 260,092 246,770 245,317 258,062 262,339 278,525
Federal government 120,017 127,180 126,019 123,936 118,817 114,124
Nonfederal government 4,289 4,287 4,235 4,216 3,904 3,853
Universities and colleges 11,728 11,917 11,959 12,536 13,442 14,278
Other nonprofit organizationsc 13,916 14,983 15,739 15,373 15,459 16,542

In 2013, U.S. total R&D increased by $20.7 billion over the 2012 level (figure 1). This is on top of gains of $7.5 billion in 2012 and $19.6 billion in 2011—in contrast to the negligible changes in 2009 and 2010. Much of the increase in these most recent years has arisen from a return of sizable yearly increases in business R&D performance. (All amounts and calculations are in current dollars, unless otherwise noted.)

FIGURE 1. Year-to-year changes in U.S. R&D expenditures, by performing sector: 2008–13
FIGURE 1. Year-to-year changes in U.S. R&D expenditures, by performing sector: 2008–13.

FFRDCs = federally funded research and development centers.

NOTES: Based on the expenditures data reported in table 1. Data for 2013 include some estimates and may later be revised.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, National Patterns of R&D Resources (annual series).

Figure 1 Source Data: Excel file

Inflation-adjusted growth in U.S. total R&D averaged only 0.8% annually over the 5-year period 2008–13, behind the 1.2% annual average for U.S. gross domestic product (GDP) (table 2)—although, compared to this 5-year average, the single-year metrics were markedly more favorable for 2010–11 (2.7% for R&D versus 1.6% for GDP) and 2012–13 (3.2% versus 2.2%). In trend comparisons for earlier years, the growth of U.S. R&D averaged 3.9% annually in 2003–08, ahead of the annual average of the GDP (2.2%). And from 1993 to 2003, U.S. R&D growth averaged 3.9% annually, whereas the average annual growth of the GDP was 3.4%. Although data indicate that total R&D has seen substantial growth annually in several recent years, well ahead of the pace of GDP, the longstanding trend of this type of growth has yet to return.

TABLE 2. Annual rates of growth in U.S. R&D expenditures, total and by performing sectors, 1993–2013
(Percent)

NA = not available.

FFRDCs = federally funded research and development centers.

a Includes expenditures of federal intramural R&D as well as costs associated with administering extramural R&D.
b Some components of the R&D performed by other nonprofit organizations are projected and may later be revised.

NOTES: Longer-term trend rates are calculated as compound annual growth rates. Data for 2013 include some estimates and may later be revised. As a further aid to interpretation, NSF's data series on U.S. R&D performance dates back to 1953. The average annual rate of growth of total R&D for the 1953–2013 period was 7.8%, compared to 6.5% for U.S. Gross domestic product over the same period. After adjustment for inflation, these average annual rates were, respectively, 4.3% and 3.1%. Gross domestic product implicit price deflators for 2009 were used to convert current to constant dollars.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, National Patterns of R&D Resources (annual series).

Table 2 Source Data: Excel file

Expenditures and gross domestic product Longer-term trends Most recent 5 years
1993–2003 2003–08 2008–13 2008–09 2009–10 2010–11 2011–12 2012–13
Current $
Total R&D, all performers 5.9 6.8 2.3 -0.4 0.8 4.8 1.8 4.8
Business 5.7 7.7 2.1 -2.9 -1.2 5.4 2.8 6.7
Federal government 4.3 4.2 1.8 3.8 5.5 5.4 -2.6 -2.8
Federal intramurala 4.2 3.6 2.1 2.4 4.6 9.3 -2.7 -2.9
FFRDCs 4.4 5.2 1.3 6.3 7.0 -1.5 -2.4 -2.7
Nonfederal government NA NA 6.4 NA 20.9 0.6 -5.1 -0.1
Universities and colleges 7.4 5.1 3.7 5.7 6.0 3.4 1.3 2.2
Other nonprofit organizationsb 9.6 4.5 2.6 10.0 2.2 -1.5 -0.6 3.0
Gross domestic product 5.3 5.0 2.6 -2.0 3.8 3.7 4.2 3.7
Constant 2009 $
Total R&D, all performers 3.9 3.9 0.8 -1.2 -0.5 2.7 0.0 3.2
Business 3.8 4.8 0.6 -3.6 -2.4 3.3 1.0 5.1
Federal government 2.4 1.4 0.3 3.0 4.2 3.3 -4.3 -4.3
Federal intramurala 2.3 0.9 0.6 1.6 3.4 7.1 -4.4 -4.3
FFRDCs 2.5 2.4 -0.2 5.5 5.7 -3.5 -4.1 -4.1
Nonfederal government NA NA 4.9 NA 19.4 -1.4 -6.8 -1.6
Universities and colleges 5.5 2.3 2.2 4.9 4.7 1.3 -0.4 0.7
Other nonprofit organizationsb 7.6 1.7 1.1 9.2 1.0 -3.4 -2.3 1.5
Gross domestic product 3.4 2.2 1.2 -2.8 2.5 1.6 2.3 2.2

R&D Performers and Funders

The U.S. R&D system consists of the R&D activities of multiple performers and the sources of funding for these activities. Performers and funders include private businesses, the federal government, nonfederal government agencies, universities and colleges, and other nonprofit organizations.[2] Organizations that perform R&D often receive significant levels of outside funding; furthermore, R&D funders may also be significant performers.

R&D Performers

The business sector continues to be the largest performer of U.S. R&D. In 2013, domestically performed business R&D accounted for $322.5 billion, or 71%, of the $456.1 billion national total (table 1, figure 2). The business sector's predominance in the composition of national R&D performance has long been the case, with its annual share ranging between 68% and 74% over the 20-year period 1993–2013.

FIGURE 2. Shares of U.S. total R&D expenditures, by performing sector and source of funds: 2013
FIGURE 2. Shares of U.S. total R&D expenditures, by performing sector and source of funds: 2013.

NOTES: U.S. R&D expenditures totaled $456.1 billion in 2013. The federal performing sector includes federal agencies and federally funded research and development centers.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, National Patterns of R&D Resources (annual series).

Figure 2 Source Data: Excel file

Business R&D performance increased $20.3 billion between 2012 and 2013, following gains of $8.2 billion in 2012 and $15.1 billion in 2011. These increases are in contrast to the essentially unchanged levels of R&D performance in both 2009 and 2010. These recent-year increases in business R&D performance are the main reason for the sizable increases in total U.S. R&D (figure 1).

Inflation-adjusted growth in business R&D averaged 0.6% annually over the 5-year period 2008–13, behind the 0.8% annual average for total R&D and the 1.2% annual average for GDP (table 2). However, growth in business R&D substantially surpassed the growth rates for both total R&D and GDP in 2011 and 2013.

The higher education sector is the second-largest performer of U.S. R&D. Universities and colleges performed $64.7 billion, or 14%, of U.S. R&D in 2013 (table 1, figure 2). Over the 20-year period 1993–2013, academia's share in U.S. R&D has ranged between 11% and 15% annually. As discussed below, universities and colleges have a special niche in the nation's R&D system: they performed more than half (51%) of the nation's basic research in 2013.

Academic R&D performance has increased by one to several billion dollars each year since 2008 (figure 1). After adjustment for inflation, growth in this sector's R&D performance has averaged 2.2% annually over 2008–13, ahead of that for U.S. total R&D (0.8%) and GDP (1.2%). However, when growth is examined in each year, the sector's growth has been noticeably stronger in the first half of this period (2008–09 and 2009–10) (table 2).

The federal government conducted $49.9 billion, or 11%, of U.S. R&D in 2013 (table 1, figure 2). This included $33.0 billion (7% of the U.S. total) for intramural R&D performed by federal agencies in their own research facilities and $16.8 billion (4%) of R&D performed by the 40 federally funded research and development centers (FFRDCs).

The federal total decreased $1.5 billion between 2012 and 2013, following a decrease of $1.4 between 2011 and 2012. These declines affected both federal intramural R&D and FFRDCs (table 1). From 2008 to 2011, the story was much the opposite: year-over-year increases of $1 billion to $2 billion in the federal total. This reversal in recent years reflects both the waning after 2010 of the incremental funding from the American Recovery and Reinvestment Act of 2009 (ARRA) and the more challenging budget environment for increases in federal R&D funding after 2011. In 1993, the federal performance share was about 15%, but it has gradually declined in the years since.

R&D performed in the United States by other nonprofit organizations (which excludes universities and nonprofit-administered FFRDCs) is estimated at $18.6 billion in 2013 (table 1). This was 4% of U.S. total R&D in 2013, a share that has been largely the same since the late 1990s (figure 2).

R&D Funders

The business sector is the predominant source of funding for R&D performed in the United States. In 2013, business sector funding accounted for $297.3 billion, or 65% of the $456.1 billion of total U.S. R&D performance (table 1, figure 2). Nearly all of the business sector's funding for R&D (98%) is directed toward business R&D performance (table 3). The small remainder goes to R&D performers in higher education, other nonprofit organizations, and FFRDCs.

TABLE 3. U.S. R&D expenditures, by performing sector, source of funds, and type of work: 2013 (corrected November 2015)

* = small to negligible amount, included as part of the funding provided by other sectors. na = not applicable. NA = not available.

FFRDCs = federally funded R&D centers.

NOTES: Data for 2013 include some estimates and may later be revised. Some components of R&D performance and funding by other nonprofit organizations are projected and may later be revised.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, National Patterns of R&D Resources (annual series).

Table 3 Source Data: Excel file

Source of funds ($millions)
Other
nonprofit
organizations
Percent
distribution
by performer
Performing sector and
type of work
Total Business Federal
government
Nonfederal
government
Universities
and colleges
R&D 456,095 297,279 121,808 4,113 15,240 17,655 100.0
Business 322,528 292,153 29,362 194 * 819 70.7
Federal government 49,859 180 49,448 50 * 181 10.9
Federal intramural 33,026 0 33,026 0 0 0 7.2
FFRDCs 16,833 180 16,422 50 * 181 3.7
Nonfederal government 467 * 193 274 * * 0.1
Universities and colleges 64,680 3,502 36,867 3,594 15,240 5,477 14.2
Other nonprofit organizations 18,561 1,444 5,939 * * 11,178 4.1
Percent distribution by funding source 100.0 65.2 26.7 0.9 3.3 3.9 na
Basic research 80,460 21,213 37,826 2,317 9,384 9,720 100.0
Business 19,508 18,203 1,196 21 * 88 24.2
Federal government 9,531 52 9,413 14 * 52 11.8
Federal intramural 5,355 0 5,355 0 0 0 6.7
FFRDCs 4,176 52 4,058 14 * 52 5.2
Nonfederal government NA * NA NA * * NA
Universities and colleges 41,275 2,156 24,148 2,213 9,384 3,373 51.3
Other nonprofit organizations 10,029 802 3,021 * * 6,207 12.5
Percent distribution by funding source 100.0 26.4 47.0 2.9 11.7 12.1 na
Applied research 90,629 46,290 33,357 1,340 4,801 4,841 100.0
Business 51,013 44,738 6,028 47 * 200 56.3
Federal government 15,103 82 14,915 23 * 83 16.7
Federal intramural 8,337 * 8,337 * 0 * 9.2
FFRDCs 6,766 82 6,578 23 * 83 7.5
Nonfederal government NA * NA NA * * NA
Universities and colleges 18,608 1,103 9,845 1,132 4,801 1,726 20.5
Other nonprofit organizations 5,671 366 2,472 * * 2,833 6.3
Percent distribution by funding source 100.0 51.1 36.8 1.5 5.3 5.3 na
Development 285,007 229,776 50,625 456 1,054 3,096 100.0
Business 252,007 229,212 22,137 126 * 532 88.4
Federal government 25,225 46 25,120 13 * 46 8.9
Federal intramural 19,334 * 19,334 * 0 * 6.8
FFRDCs 5,890 46 5,786 13 * 46 2.1
Nonfederal government NA * NA NA * * NA
Universities and colleges 4,797 242 2,874 249 1,054 379 1.7
Other nonprofit organizations 2,861 276 446 * * 2,139 1.0
Percent distribution by funding source 100.0 80.6 17.8 0.2 0.4 1.1 na

Funds from the federal government accounted for $121.8 billion, or 27%, of U.S. total R&D in 2013 (table 1, figure 2). This funding was mainly directed to R&D performance by the federal government, business, and higher education (table 3). Federal funding accounted for all of the $33.0 billion of federal intramural R&D performance in 2013 and most of the $16.8 billion of R&D performed by FFRDCs. (Nonfederal support for FFRDC R&D has been around $0.4 billion or so in recent years, or 2% of total support.) Federal funding to the business sector accounted for $29.4 billion of business R&D performance in 2013, or 9% of the sector's R&D total that year (table 3). Federal funds to academia supported $36.9 billion (57%) of the $64.7 billion spent on academic R&D in 2013. For the R&D performed by other nonprofit organizations, $5.9 billion (about 32%) of this sector's $18.6 billion of performance was supported by federal funds.

The balance of R&D funding from other sources is small: $37.0 billion in 2013, or about 8% of all U.S. R&D performance. Of this amount, $15.2 billion (3%) was academia's own institutional funds, all of which remain in the academic sector; $4.1 billion (1%) was from state and local governments, primarily supporting academic research; and $17.7 billion (4%) was from other nonprofit organizations, the majority of which funds this sector's own R&D. In addition, some funds from the nonprofit sector support academic R&D.

R&D by Type of Work

Basic research activities accounted for $80.5 billion, or 18%, of the total of U.S. R&D expenditures in 2013 (table 3). Applied research was $90.6 billion, or 20% of the total. Most of the R&D total went toward development: $285.0 billion, or 63%.

Universities and colleges accounted for just over half (51%) of the $80.5 billion of basic research in 2013. The business sector performed more than half (56%) of the $90.6 billion of applied research and an even larger share (88%) of the $285.1 billion of development.

Federal funding accounted for 47% of the $80.5 billion of basic research in 2013. But federal funds were less prominent on a proportional basis for applied research (37% of $90.6 billion) and development (18% of $285 billion). The business sector provided the greatest share of funding for applied research (55%). It was also by far the largest source of funding for development (81%).

Trend in National R&D Intensity

The ratio of total national R&D expenditures to GDP is often reported as a measure of the intensity of a nation's overall R&D effort and is widely used as an international benchmark for comparing countries' R&D systems. The ratio of U.S. R&D expenditures to GDP totaled 2.72% in 2013, compared to 2.69% in 2012 and 2.76% in 2011 (figure 3).[3]

FIGURE 3. Ratio of U.S. R&D to gross domestic product, roles of federal, business, and other nonfederal funding for R&D: 1953–2013
FIGURE 3. Ratio of U.S. R&D to gross domestic product, roles of federal, business, and other nonfederal funding for R&D: 1953–2013.

NOTES: Data for 2013 include some estimates and may later be revised. The federally funded data represent the federal government as a funder of R&D by all performers; similarly, the business funded data reflect the business sector as the funder of R&D by all performers. The other nonfederal category includes R&D funded by all other sources—mainly, universities and colleges, nonfederal government, and other nonprofit organizations. Data on the gross domestic product reflect the Bureau of Economic Analysis's comprehensive revisions of the National Income and Product Accounts of July 2013.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, National Patterns of R&D Resources (annual series).

Figure 3 Source Data: Excel file

The U.S. R&D-to-GDP ratio stood at 2.81% in 2009—the ratio's highest level since the start of the time series in 1953.[4] Over the 10-year period from 2003 to 2013, the ratio has fluctuated year to year, between a low of 2.48% in 2004 and a high of 2.81% in 2009. The trend since the later 1990s has been a rising R&D-to-GDP ratio (figure 3). Whether the lower ratios that have resulted since 2009 represent a short-term reversal or something more permanent remains to be seen.

Most of the rise of the R&D-to-GDP ratio over the past several decades has come from the increase of nonfederal spending on R&D, particularly by the business sector (figure 3). This arises from the growing role of business R&D in the national R&D system, which, in turn, reflects the unabated increase of R&D-dependent goods and services in the national and global economies.

By contrast, the ratio of federal R&D spending to GDP declined from the mid-1980s to the late 1990s, notably from cuts in defense-related R&D. There had been a gradual uptick in the ratio through 2009, the result of increased federal spending on biomedical and national security R&D and the one-time incremental funding for R&D provided by ARRA.

Data Sources and Availability

The statistics on U.S. R&D presented here are derived chiefly from integrating the data on R&D expenditures and funding collected from major national surveys that are conducted by NSF's National Center for Science and Engineering Statistics to gather information on the organizations that perform most of U.S. R&D. In some cases, the primary survey data are adjusted to enable consistent integration of the statistics from these separately conducted surveys. Preliminary or otherwise estimated values may be used where final data from one or more of the surveys are not yet available and can reasonably be prepared.

The main R&D surveys utilized include NSF's Business R&D and Innovation Survey (for 2008 through 2013; for 2007 and earlier years, data from the preceding Survey of Industrial R&D are used), the Higher Education R&D Survey (for 2010 through 2013; for 2009 and earlier years, the preceding Survey of R&D Expenditures at Universities and Colleges), the Survey of Federal Funds for R&D (FYs 2013–15 and earlier years), and the FFRDC Research and Development Survey (FY 2013 and earlier years). Figures for R&D performed by other nonprofit organizations with funding from with the nonprofit sector and from business sources are estimated, based on parameters from the Survey of R&D Funding and Performance by Nonprofit Organizations, 1996–97.

The data on federally funded R&D discussed in this report were derived from surveys of organizations that perform R&D, such as companies, universities, and FFRDCs. These amounts can differ substantially from the R&D that federal agencies have reported funding. For example, federal agencies reported obligating $138 billion for R&D funding to all R&D performers in 2012 (including $59 billion to the business sector), compared with an estimated $125 billion in federal funding reported by all performers of R&D that year ($31 billion by businesses). Although NSF has not found a definitive explanation for this divergence, the National Academies' Committee on National Statistics (CNSTAT) has noted that comparing federal outlays (as opposed to obligations) for R&D to performer expenditures results in a smaller difference.[5] For FY 2012, federal agencies reported R&D outlays of $129 billion to all R&D performers.

For further information on the National Patterns data and methodology, contact the author.

Notes

[1] Mark Boroush, Research and Development Statistics Program, National Center for Science and Engineering Statistics, National Science Foundation, 4201 Wilson Boulevard, Suite 965, Arlington, VA 22230 (mboroush@nsf.gov; 703-292-8726).

[2] NSF identifies the main categories of R&D performers as follows: businesses, federal agencies, federally funded research and development centers (administered by businesses, universities and colleges, or nonprofit organizations), nonfederal government agencies, universities and colleges, and other nonprofit organizations. For R&D funding, the main categories are businesses, the federal government, nonfederal government, universities and colleges, and other nonprofit organizations.

[3] The Department of Commerce's Bureau of Economic Analysis (BEA) introduced a comprehensive set of revisions to the National Income and Product Accounts in July 2013—including explicitly recognizing R&D as investment in the measure of U.S. gross domestic product. These changes resulted in modest revisions to the U.S. GDP time series back to 1929. The U.S. R&D/GDP ratio reported in this InfoBrief reflect BEA's revised GDP data series, both in the present and the past, and differ somewhat from data reported previously in the National Patterns series. For a fuller explanation of this development and its implications see NSF's recent InfoBrief on this topic: http://www.nsf.gov/statistics/2015/nsf15315/).

[4] The data used to construct the U.S. R&D-to-GDP ratio were the latest available at the time of this report. Due to sample variability in the data for the business R&D component, the calculated ratios for 2008, 2009, and 2011 are not significantly different from one another at a 90% confidence level.

[5] National Research Council. 2005. Measuring Research and Development Expenditures in the U.S. Economy. Panel on Research and Development Statistics at the National Science Foundation; Brown LD, Plewes TJ, Gerstein MA, editors. Committee on National Statistics, Division of Behavioral and Social Sciences and Education. Washington, DC: National Academies Press.