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Commerce Advance Estimate Shows Growth Rate of U.S. Corporate R&D; Investment Doubling from 1999 to 2000

Information & Electronics Manufacture and Services Sector Drives Growth

Washington, DC - Public corporations headquartered in the United States almost doubled the growth rate of their investment in R&D; in 2000 according to new data from the Advance Estimate of Annual U.S. Corporate R&D; report released today by the Commerce Department's Office of Technology Policy.

According to the report, R&D; investment in 2000 rose sharply by 9.3 percent in inflation-adjusted terms, increasing from $145.6 billion in 1999 to an estimated $162.7 billion in 2000. The increase reverses a five-year trend of slowing annual percentage increases in corporate R&D; investment, and approaches the high of a 10.2 percent annual increase set in 1995.

"R&D; investment underlies much of industry's essential, creative process and can serve as an important indicator of future technology change and potential economic growth," said Assistant Secretary for Technology Policy Bruce Mehlman. "Our advance estimate will help public and private decision-makers as they plan their growth strategies."

Among the report's highlights:

• U.S. corporate R&D; is increasingly concentrated in two major sectors, information and electronics manufacture and services (I&E;) and medical substances and devices. In only six years, these sectors together moved from claiming 55 percent of all U.S. corporate R&D; in 1994 to 67 percent in 2000.

• Conversely, three major sectors lost significant share of total corporate R&D.; Together aerospace, chemical manufacture, and basic industries and materials declined from a 21 percent share of R&D; in 1994 to only 13 percent in 2000.

• The I&E; sector is the principal driver behind the 9.3 percent increase in corporate R&D; by virtue of the size of its R&D; investment in 2000 (47.2 percent of total U.S. corporate R&D; investment) and the strength of its increase (16.3 percent in inflation-adjusted dollars). Combined, the non-I&E; industries increased R&D; by only 3.7 percent in 2000.

  The advance estimate, which is published under the U.S. Corporate R&D; data series, covers nine major sectors:

  Aerospace
  Basic Industries & Materials
  Chemical Manufacture
  Information & Electronics Manufacture and Services
  Machinery Manufacture
  Medical Substances & Devices
  Surface Transport Equipment Manufacture
  Unclassifiable and Conglomerates
  Various Services

  For the first time, the report is based on the new North American Industry Classification System (NAICS) rather than the decades-old Standard Industrial Classification (SIC), and more accurately updates data for the years 1994-2000.

  The full text of the U.S. Corporate R&D; Advance Estimate report is available from Office of Technology Policy website, www.ta.doc.gov/reports . The Office of Technology Policy expects to issue the final report on U.S. Corporate R&D; in the spring of 2002.