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NSF PR 99-43 - June 14, 1999

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U.S. Industry Driving the Growth in Research & Development Spending

Research and development (R&D) spending in the United States reached an estimated $220.6 billion in 1998, says a new National Science Foundation (NSF) report.

However, the report says, industry, not government, is responsible for most of the inflation-adjusted 5.3 percent increase over the estimated $205.6 billion spent on R&D in 1997.

Industry has provided the largest share of financial support for R&D in the U.S. since 1980, said Steven Payson, author of the NSF Division of Science Resources Studies (Special Report), National Patterns of R&D Resources: 1998.

Preliminary 1998 estimates show industry R&D spending increased in real terms 7.7 percent over 1997 to $143.7 billion, or 65.1 percent of the total. Federal support increased 0.8 percent to $66.6 billion, for a record low of 30.2 percent of the total.

"Nearly all ($140.8 billion) of the industry R&D funds will be devoted to R&D performed by industry itself, with the remainder directed toward academic R&D ($1.8 billion) and R&D performed by other nonprofit organizations ($1.0 billion)," Payson said.

Industry, including industry-administered federally funded research and development centers (FFRDCs), is expected to perform 75.1 percent of the nation’s total R&D in 1998. Of this, 85 percent will come from industry’s own funds; federal funding will account for the remaining 15 percent (down from an all-time high of 32 percent in 1987).

Most R&D spending (61.8 percent, or $136.4 billion) is for development. Applied research accounts for 22.6 percent, or $49.8 billion; basic research for 15.6 percent, or $34.4 billion.

Other highlights of the special report:

• The 1998 expected U.S. ratio of R&D to Gross Domestic Product of 2.61 percent is the highest since 1992.
  
  
• Total R&D is substantially concentrated in a small number of states. In 1995, the most recent year for which figures are available, the six states with the highest levels of R&D expenditures were, in descending order, California, Michigan, New York, Massachusetts, New Jersey and Texas. They accounted for about half the national R&D total.
  
  
• The highest ratios of R&D to Gross State Product in 1995, in descending order, were in New Mexico, the District of Columbia, Michigan, Massachusetts, Maryland, Delaware, California, Connecticut, Rhode Island, and Washington.
  
  
• Defense-related R&D spending fell to 16.4 percent of the national (federal plus non-federal) total in 1998, down from a high of 31.8 percent in 1987.

Editors: For the report see: http://www.nsf.gov/sbe/srs/nsf99335/start.htm

 
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