Federal Obligations for Applied Research Keep Pace with Those for Basic Research

by Ronald L. Meeks   Basic research and applied research each comprises 21 percent of the projected FY 1998 Federal R&D total, compared with their 18-percent shares in FY 1992.

Federal obligations for research and development (R&D) and R&D plant will decrease an estimated 1 percent (2-percent decrease in inflation-adjusted 1992 dollars) from the previous year's level to $72 billion for fiscal year (FY) 1998, according to a survey of Federal agencies conducted in 1997 (table 1). However, agencies project a 2.5-percent increase in the research portion of the R&D total (a 1-percent increase in constant 1992 dollars). Research would account for 42 percent of the FY 1998 R&D money, with basic and applied research support totaling more than $15 billion each, according to preliminary estimates. In constant 1992 dollars, basic research will remain nearly flat, and applied research will increase about 1 percent from FYs 1997-98. As in the past, the Federal Government obligates the largest portion of R&D and R&D plant dollars for development, which accounts for approximately 55 percent of the FY 1998 preliminary total. However, the development share of the total has decreased throughout the 1990's, from 64 percent in FY 1990. Agencies project development funds to drop 2 percent (down 4 percent in constant 1992 dollars) from their FY 1997 level, to $40 billion in FY 1998. R&D plant is slated to decrease 13 percent (down 15 percent in constant 1992 dollars) to under $2 billion. The statistics are being released in advance of the National Science Foundation's (NSF's) Detailed Statistical Tables Report, Federal Funds for Research and Development: Fiscal Years 1996, 1997, and 1998, Volume 46. Agencies' Funding for Basic and Applied Research The share of Federal obligations for basic research has been increasing slowly since FY 1992. In FY 1992, basic research comprised 18 percent of total R&D. That percentage increased slightly each year and reaches 21 percent in FY 1998, according to preliminary estimates. Change in the applied research share has been similar to that for basic research throughout this period. In FY 1992, applied research accounted for 17.5 percent of the R&D total, and its FY 1998 share is also 21 percent. Overall, Federal agencies report a 4-percent average annual rate of growth (1 percent in constant 1992 dollars) for basic research from FYs 1990-98. Federal agencies report about a 5-percent average annual rate of growth (2 percent in constant 1992 dollars) for applied research during this same time period. When adjusted for inflation, however, basic and applied research funding each has held steady at about $13 billion since FY 1993. The six lead agencies in basic research funding will account for 97 percent of the Federal basic research total in FY 1998 (chart 1). These agencies are the Department of Health and Human Services (HHS) (almost entirely at the National Institutes of Health), NSF, Department of Energy (DOE), National Aeronautics and Space Administration (NASA), Department of Defense (DOD), and Department of Agriculture (USDA). Of these six agencies, NASA and USDA report an expected decrease in basic research funding for FY 1998, dropping 5 percent (down $102 million) and 1 percent (down $7 million), respectively. Each of the other four agencies expects strong to modest increases in basic research funding: DOD (9 percent), DOE (5 percent), NSF (4 percent), and HHS (1 percent). Seven agencies will account for 88 percent of the Federal applied research obligations in FY 1998. These agencies are HHS, DOE, NASA, DOD, USDA, DOC, and the Department of the Interior (DOI). DOD and USDA each reports an expected 3-percent decrease in applied research funding for FY 1998 (down $77 million and $24 million, respectively). DOC indicates that its applied research funding is nearly the same as its FY 1997 level. The other four agencies expect strong to modest increases in applied research funding: NASA (11 percent), DOE (6 percent), HHS (5 percent), and DOI (2 percent). Research Funding by Science and Engineering Fields Most basic research obligations support work performed in the life sciences ($7 billion), physical sciences ($3 billion), engineering ($2 billion), and environmental sciences ($1.5 billion), according to preliminary 1998 estimates. HHS provides the bulk (82 percent) of life sciences funding, while DOE is the largest Federal funder of basic research in the physical and environmental sciences, accounting for 33 percent of their combined total. NASA follows closely, funding 32 percent of basic research in these sciences. Agencies also provide more applied research support in the life sciences ($6 billion, mostly from HHS) than in any other field. However, agencies fund applied research in engineering second most (at $4 billion), largely provided by DOD (35 percent) and NASA (34 percent). Survey Notes The 31 Federal agencies that report R&D obligations to the Federal Funds survey submitted actual obligations for FY 1996 and preliminary data for FYs 1997-98. Data were collected from May through September of 1997. Agencies can later revise the preliminary data on the basis of actual changes in the funding levels of R&D programs. Therefore, FYs 1997-98 obligations are subject to revision in the next survey cycle. Further, agencies may change prior-year data to reflect program reclassifications. In recent years, agency-reported revisions have been extensive, reflecting the uncertainty and flux in the funding of the Nation's R&D enterprise. For example, during the period May through August 1996, Federal agencies projected total R&D and R&D plant obligations of $71 billion for FY 1996. As detailed in table 1 of this Data Brief, agencies now report actual FY 1996 obligations of $69 billion, more than a 2-percent downward revision from earlier expectations. This Data Brief was prepared by: Ronald L. Meeks National Science Foundation Division of Science Resources Studies 4201 Wilson Boulevard Suite 965 Arlington, VA 22230 703-306-1772 Ext. 6937