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Real Increase in R&D Spending Expected for 1998

January 16, 1998

The United States could be on the verge of a major resurgence in the funding of research and development (R&D), according to the annual forecast by Battelle Memorial Institute and R&D Magazine. R&D spending in 1998 is expected to reach more than $215 billion, a 4.66 percent increase over the $206 billion that the National Science Foundation estimates was spent in 1997. The prediction comes after years of stagnation in R&D spending.

Predictions for 1998 include:

  • Industry will invest $143 billion, an increase of more than 6 percent from 1997
  • The federal government will contribute $62.9 billion to conduct R&D, slightly more than what was spent last year
  • Universities and other non-profits will invest nearly 10.2 billion on R&D.

Before 1980, the federal government was the dominant supporter of R&D, funding more than 50 percent of the work. Since then, however, government's share has slipped to less than 30 percent, a figure that is expected to continue falling over the next five years.

The federal government supports R&D in all four performing sectors: federal laboratories, private industry, academic institutions, and other non-profits. However, the forecast predicts that only academia will enjoy increased funding from the federal government, though the total will barely keep pace with inflation.

Industrial areas that are expected to have high growth in R&D spending are: pharmaceuticals, genetic research, microelectronics, telecommunications, computer technology, electronic components, medicine, scientific instruments, non-electrical machinery, and motor vehicles.

A copy of the full forecast can be found in the January issue of R&D Magazine.