Useful Stats: Business R&D by industry, 2018 and 2022

Manufacturing industries accounted for approximately $372 billion, or 54%, of all domestic business enterprise R&D (BERD) expenditures in 2022, up 36% from $274 billion in 2018. Despite this increase of nearly $100 billion over the past five years, the share of BERD expenditures in manufacturing industries has decreased eight percentage points from its 2018 value of 62%. Meanwhile, companies in nonmanufacturing industries captured by the BERD survey outpaced their counterpart’s growth, having increased $152 billion, or 91%, over the same period, leading to an eight percentage point increase in share of total—from 38% to 46%.

By sector, BERD expenditures can be broken down into two major categories—manufacturing and nonmanufacturing—and then further by industry. This article will explore how the proportion of manufacturing and nonmanufacturing BERD has changed over the past five years of available data since 2018, diving into the various sectors and industries captured by the survey. The data used in this article are all available from the BERD survey, and cover funds spent for business R&D performed in the U.S. only, for 2018 and 2022.

Due to differences between the 2013 and 2022 data releases, a 10-year comparison is not possible. However, looking back five years, comparing 2018 data to the most current release provides a unique glimpse into differences between the pre-pandemic and current business R&D landscape.

Note that the BERD survey uses North American Industry Classification System (NAICS) definitions for sectors and industries. Read more about NAICS codes and their meanings here.

National trends in BERD by industry

Of the manufacturing industries captured by BERD in 2022, chemicals has the largest overall value at $125 billion, or 34% of the total, followed by computer and electronic products at $105 billion, or 28%, and transportation equipment at $71 billion, or 19%.

There are, however, differences in the funding sources of these industries.

Business R&D can be separated into two funding sources: paid for by the company and paid for by others. Of the $372 billion domestic BERD expenditures in manufacturing industries in 2022, 88% was paid by the company; this was similar to 2018, when the figure stood at 86%. The overall domestic BERD value across all industries matched the percentages of each year’s manufacturing-only values.

Figure 1 shows a series of charts representing the BERD values, separated by source of funds, for manufacturing and nonmanufacturing industries for both 2018 and 2022.

Figure 1: Manufacturing and nonmanufacturing domestic BERD by source of funds, 2018 and 2022.

While most manufacturing industries have roughly the same percentage spread of funding sources, the transportation equipment industry deviates with 65% of its BERD expenditures paid for by the companies. Zooming in further, aerospace products and parts within the transportation equipment industry, which makes up approximately half of the industry’s BERD value, has just 39% paid for by the company. However, this should not come as a surprise with the regulated nature of aerospace—87% of BERD paid for by others is attributable to federal sources.

Figure 2 features an interactive chart of manufacturing and manufacturing industries captured by the BERD survey for 2018 and 2022. By default, Figure 2 shows the total 2022 BERD values, but it can be toggled via the buttons under the title to show just dollars paid for by companies or others and to switch to 2018 data. Clicking on any slice of the chart (e.g., “manufacturing industries” or “chemicals”) will concentrate the data on that which was pressed. For example, clicking on “transportation equipment” will reveal “motor vehicles, bodies, trailers, and parts,” “aerospace products and parts,” and “other.”

Figure 2: Broad industry breakdown of 2022 domestic BERD expenditures.

BERD survey data for nonmanufacturing industries indicates that those within the information sector accounted for 57%, or $182 billion, of nonmanufacturing’s overall BERD value, while professional, scientific, and technical services accounted for 23%, or $75 billion, and finance and insurance for 5%, or $17 billion.

Nonmanufacturing industries follow the same general trend as their manufacturing counterparts, with 88% of overall BERD in these industries paid for by companies in 2022 (86% in 2018). However, looking deeper into the industries, there is a larger variance in where the funds come from.

Funds for BERD expenditures in professional, scientific, and technical services were split almost evenly between those paid for by companies (52%) and others (48%). This trend was largely driven by scientific research and development services, which were 73% paid for by others. Breaking this number down further shows that the funds are mostly from companies other than themselves, with $18.5 billion from other domestic companies and $6 billion from other foreign companies.

In 2018, there was an even split between BERD paid for by companies and others in professional, scientific, and technical services, with a similar spread of funding sources.

More SSTI analyses of the new 2022 data year release of BERD survey data covering a national overview, state overview, and BERD intensity metrics can be accessed by clicking their respective hyperlinks.

This article was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.