Industry Driving Growth in U.S. R&D Spending

Research and development (R&D) spending in the United States reached an estimated $220.6 billion in 1998, reflecting an inflation-adjusted increase of 5.3 percent over 1997, reports the National Science Foundation (NSF) in the recently released National Patterns of R&D Resources: 1998.

Industry, not government, is responsible for most of the growth, according to the report. Industry has provided the largest share of financial support for U.S. R&D since 1980, found Steven Payson, report author and Senior Science Resources Analyst with NSF's Division of Science Resources Studies.

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.

Payson estimates that nearly all ($140.8 billion) of the industry R&D funds was 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).

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

The report includes discussion of trends in national R&D support and measures the results by several indicators including ratios of R&D to gross domestic product and of R&D scientists and engineers to labor force. The report also includes a discussion of patterns in R&D performance by state, sector, and character of work. The largest section of the report consists of 35 detailed statistical tables.

New features for this year's National Patterns include more detailed information and more extensive data, including historical data on R&D expenditures by State for 1987, 1989, 1991, 1993 and 1995 (Table B-7).

The table accompanying this article presents the change from 1987 to 1995 in per capita R&D expenditures by state. States are also ranked by the growth or decline in R&D spending. Six states saw a drop in spending. Four additional states experienced single digit growth C less than the rate of inflation for the period. Nationally R&D spending grew by 22.65 percent between 1987 and 1995.

The national average per capita R&D spending in 1995 was $657.78, a figure surpassed by only 11 states. Per capita R&D expenditures in 11 states did not reach 33 percent of the national average.

The full report, National Patterns of R&D Resources: 1998, can be viewed and downloaded from the NSF website: http://www.nsf.gov/sbe/srs/nsf99335/start.htm

Change in Per Capita Total R&D Expenditures by State 1985 - 1995

State

1987

Per Capita1

1995

Per

Capita

% Change

Rank by Change

AK

167.68

271.61

38.27

13

AL

585.26

393.59

-48.70

48

AR

83.53

132.86

37.13

15

AZ

332.92

461.36

27.84

20

CA

918.77

1148.09

19.97

35

CO

522.72

696.36

24.93

28

CT

761.01

1321.55

42.42

11

DC

NA

5662.23

NA

NA

DE

NA

1598.21

NA

NA

FL

261.42

368.31

29.02

19

GA

230.40

293.87

21.60

33

HI

148.21

143.06

-3.60

45

IA

195.21

488.31

60.02

4

ID

536.44

785.50

31.71

17

IL

468.60

630.90

25.73

25

IN

401.48

546.50

26.54

22

KS

524.56

296.63

-76.84

49

KY

96.07

153.99

37.61

14

LA

73.19

97.72

25.11

27

MA

1309.65

1645.70

20.42

34

MD

1012.62

1366.65

25.91

23

ME

64.47

280.13

76.99

1

MI

861.97

1363.80

36.80

16

MN

597.25

670.46

10.92

38

MO

429.43

468.09

8.26

40

MS

91.34

116.97

21.92

32

MT

67.55

137.15

50.75

7

NC

345.48

444.17

22.22

31

ND

176.19

152.18

-15.78

47

NE

102.27

205.41

50.21

8

NH

155.68

521.47

70.15

2

NJ

876.70

1145.43

23.53

30

NM

1618.08

1957.20

17.33

37

NV

164.16

291.18

43.62

10

NY

458.09

603.73

24.12

29

OH

458.58

477.17

3.90

41

OK

166.46

161.64

-2.98

44

OR

176.19

346.57

49.16

9

PA

476.97

574.67

17.00

38

RI

559.09

906.27

38.31

12

SC

189.54

269.31

29.62

18

SD

30.62

74.42

58.86

5

TN

198.81

267.95

25.80

24

TX

328.17

448.51

26.83

21

UT

614.53

574.48

-6.97

46

VA

431.28

445.13

3.11

42

VT

523.05

529.12

1.15

43

WA

776.90

964.59

19.46

36

WI

322.10

433.34

25.67

26

WV

101.01

260.78

61.26

3

WY

75.06

181.38

58.62

6

TOTAL2

508.77

657.78

22.65

 

1. Source for population estimates was the U.S. Census Bureau. Figures for R&D Expenditures from the National Science Foundation, National Patterns of R&D Resources: 1998.

2. Delaware and the District Columbia have been omitted from the 1987 and 1995 U.S. Total Per Capita R&D Spending calculations since 1987 statistics were not available.