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R&D Share of GDP Grows

October 15, 1999

Total annual research and development (R&D) expenditures — expected to pass $247 billion in 1999 — have grown 7.2 percent over 1998 levels (adjusted for inflation), according to a recent Data Brief from the National Science Foundation. Growth in R&D expenditures has been accelerating since 1995. The annual real R&D growth for 1995-99 is expected to average 6.1 percent. Almost all of the growth is attributed to a resurgence in industrial R&D.

R&D’s share of the gross domestic product is forecasted to be 2.79 percent in 1999, the highest level since 1967's 2.80 percent share. The lowest R&D/GDP ratio was 2.12 percent in 1978. R&D as a proportion of GDP has risen sharply since 1994, following a three-year decline during the early 1990s.

Industry continues to account for the largest share of US R&D support; industry’s share of the $247 billion is projected to be $169 billion. Only $2.2 billion of industry’s R&D expenditures will be directed toward academic research; other nonprofits account for only $1.2 billion.

Federal support for R&D dropped to 26.7 percent of the total annual expenditures — the federal government’s lowest figure since 1953 when the ratio was first calculated.

Copies of the report can be downloaded from http://www.nsf.gov/cgi-bin/getpub?nsf99357