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July 10, 1998

The National Science Foundation's (NSF) Division of Science Resources Studies has released three individual data briefs all pertaining to federal research and development funding trends.

In FY 1996 total expenditures by universities and colleges for separately budgeted research and development activities in science and engineering (S&E) increased 3.5% over the FY 1995 level, reaching nearly $23 billion, according to data brief "Academic R&D Expenditures Maintain Steady Growth in FY 1996." When adjusted for inflation, academic R&D increased 1.4% over the 1995 level.

Academic R&D expenditures financed by the federal government increased 3% in FY 1996 to $13.8 billion. This represents 60% of the R&D dollars expended at universities and colleges.

Expenditures financed by all non-federal sources combined grew nearly 4% in FY 1996 to $9.2 billion. Spending from industry sources increased the fastest at 6% for a total funding level of more than $1.5 billion. Industry funding was followed by the largest non-federal source, institutional funds, with a 4% gain which totaled more than $4.2 billion. State and local governments' R&D funding was up nearly 3% to over $1.7 billion.

Academic R&D expenditures are concentrated in relatively few institutions. The 100 leading research institutions (out of the 674 institutions represented in the data) accounted for 81% of federally financed spending and 80% of all academic R&D expenditure.

While federal spending at academic institutions increased in FY 1996, another Data Brief indicates that expenditures might decline in FY 1997. "Federal Academic Science and Engineering Obligations Decreased Slightly in FY 1996," instead of focusing on spending, focused on funding that was obligated by the federal government — funds must first be obligated before being expended.

The data indicates a possible decline in expenditures in the next fiscal year. The report states that in FY 1996, federal agencies obligated $14.3 billion for academic science and engineering (S&E). This is $23 million, or two-tenths of one percent, below FY 1995 levels. After adjusting for inflation, the decrease exceeded 2%.

This information is based on the most recent data from the NSF's annual Survey of Federal S&E Support to Universities, Colleges, and Nonprofit Institutions. This is only the fourth time since the inception of NSF's survey in 1963 that current dollar obligations had fallen.

The Department of Health and Human Services (HHS) accounted for just over one-half of all federal FY 1996 academic S&E obligations. When combined with support from NSF and the Department of Defense (DoD), these three agencies were responsible for nearly four-fifths of the academic S&E total. However, only HHS reported real S&E growth with a 2% increase.

In a third Data Brief, "Federal Obligations for Applied Research Keep Pace with Those for Basic Research," NSF examined federal obligations for R&D and R&D plant for all sectors, not just funds directed to academic institutions. NSF predicts that federal obligations for R&D and R&D plant will decrease slightly less than 1%, in FY 1998. Most of this decrease is found within R&D plant obligations.

Agencies project a 2.5% increase in the research portion of the R&D total. Research would account for 42% of the FY 1998 R&D funding, with basic and applied research support totaling more than $15 billion each. In constant 1992 dollars, basic research would remain nearly flat, and applied research would increase about 1% from FY 1997 levels.

As in the past, the federal government obligates the largest portion of R&D funding to development, which accounts for approximately 55% of the FY 1998 preliminary total. However, the development share of the total has decreased throughout the 1990s, from 64% in FY 1990 to an estimated 55% in FY 1998.

R&D plant is slated to decrease 13% to under $2 billion. After adjusting for inflation, the real decrease is 15%. These statistics are being released in advance of the NSF's "Federal Funds for Research and Development: Fiscal Years 1996, 1997, and 1998".

The six lead agencies in basic research funding will account for 97% of the federal basic research total in FY 1998. These agencies are: HHS, NSF, DOE, NASA, DoD, and USDA. Of these six agencies, NASA and USDA report an expected decrease in basic research funding, while each of the other four agencies expects strong to modest increases.

Seven agencies will account for 88% of the federal applied research obligations in FY 1998. These agencies are: HHS, DOE, NASA, DoD, USDA, DOC, and the Department of the Interior (DOI). DoD and USDA each report an expected decrease in applied research funding, DOC indicates its funding will remain nearly the same, and the other four agencies expect strong to modest increases.

Science Resource Studies Data Briefs are available via the Internet at http://www.nsf.gov/sbe/srs/ stats.htm. For more information about obtaining reports, contact pubs@nsf.gov or call 301/947-2722.