R&DSizable increase in U.S. R&D spending

U.S. research and development (R&D) performance rose to $477.7 billion in 2014 — an increase of $21.1 billion over the previous year — and is estimated to hit $499.3 billion in 2015, according to a new report from the National Center for Science and Engineering Statistics (NCSES).

The NCSES report looks at two different aspects of the U.S. system: the performance of R&D by businesses, government agencies, higher education institutions, and other organizations, and the funding sources used by these sectors to perform that R&D.

R&D performance
The NSF says that adjusted for inflation, growth in U.S. total R&D performance averaged 1.2 percent annually between 2008 and 2014, matching the average pace of U.S. gross domestic product (GDP). The NCSES data show increases of $20.4 billion in 2013, $21.1 billion in 2014, and an estimated $21.6 billion in 2015.

U.S. R&D performance breaks down into three categories: basic research ($84 billion of the 2014 total), applied research ($93.6 billion) and experimental development ($300.1 billion). Federal funding accounted for 45 percent of basic research, 36 percent of applied research and 16 percent of development. Business funding accounted for 27 percent of basic research, 52 percent of applied research and 82 percent of development.

The business sector is by far the largest performer of U.S. R&D, accounting for $340.7 billion, or 71 percent of the total in 2014. The sector has long been the predominant performer, with an annual share ranging between 68 percent and 74 percent over the past twenty years.

The higher education sector is the second-largest performer of R&D, with universities and colleges performing $64.7 billion, or 14 percent of the total in 2014. From 2012 to 2014, higher education annual increases dropped below $1 billion.

The federal government conducted $52.3 billion, or 11 percent, of U.S. R&D in 2014, of which $34.4 billion was performed by agencies in their own facilities, with the remainder performed at federally funded research and development centers (FFRDCs).

R&D funding
The business sector was the largest funder of R&D, accounting for $318.6 billion of the 2014 total of $477.7 billion. Nearly all of the business sector’s funding — 98 percent — was directed at R&D performance by businesses.

The federal government was the second largest funder, at $119.8 billion. The federal government directed $34.4 billion of its funding to R&D at agencies, $17.5 to FFRDCs, $26.6 billion to businesses and $34.1 billion to academic institutions.