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2020 BERD data shows an increase of over $45 billion in domestic R&D spending

October 27, 2022
By: Conor Gowder

Despite COVID-induced setbacks continuing to keep some people out of offices and laboratories, new Business Enterprise Research and Development Survey (BERD) data reveals that domestic research and development (R&D) spending, although slowing, is still on an uptrend. From 2018 to 2019, business R&D spending increased by 11.8% (from approximately $441 billion to $492 billion), with new data showing a further increase of 9.1% from 2019 to 2020 ($492 billion to $538 billion).

The $538 billion in total R&D expenditures for 2020 can be broken down into two main categories: company funded R&D (approximately $466 billion) and R&D funded via other sources (approximately $71 billion). Company funded R&D saw an increase of 8.7% over the prior year, while funding from other sources leapt 11.7%.

The nearly 12% leap in non-company funded R&D can be explained in part through governmental responses to COVID-19, with a nearly 400% increase in “Pharmaceuticals and medicines” R&D activity paid for by the federal government ($269 million to over $1 billion), with its share of total R&D paid for by the federal government increasing from 1.2% to 3.7%.

In terms of overall numbers, despite a 9.1% growth in R&D spending, not all industries actually experienced increasing spending levels. Of the various manufacturing industries, “Electrical equipment, appliance, and components” and “Motor vehicles, bodies, trailers, and parts” saw decreases of around 5% each (approximately 8% and 7% respective decreases in R&D paid for by company).

On the other hand, “Aerospace products and parts” saw the greatest increase of any manufacturing industry at nearly 25% higher than 2019 levels (approximately 2% increase in R&D paid for by company), while “Computer and electronic products” followed closely with 15% above (approximately 17% increase in R&D paid for by company).

Manufacturing industries employed 45,000 less R&D workers in 2020 than the prior year while non-manufacturing R&D employment jumped by over 850,000, generating an overall net increase of 821,000 jobs.

By state, California saw the largest levels of company funded R&D by far ($175.5 billion), while Alaska saw the least ($43 million). Refer to the below map for more detailed information:

manufacturing, r&d, federal spending, investing, nsf