After several years of not keeping pace with inflation, recently released figures for U.S. federal investment in research and experimental development (R&D) in FY 2025 suggest a potential downturn in both current and constant dollars is looming. The news from the latest Survey of Federal Funds for Research and Development comes on the heels of international coverage of China finally surpassed the US for global leadership in overall R&D investment.
There have been periods of downcycles in spending before, most notably during the 2010s as Figure 1 below shows. The $100 million drop recorded in the preliminary FY 2025 is less than one-then of one percent of the $194 billion total, but declines in spending were noted across most research agencies.This edition of Useful Stats explores the newly released data, breaking down federal R&D obligations at the national, state, and agency levels and how they have changed over time.
Federal R&D obligations remain at record levels, but have lost substantial value to inflation
The data reveals federal obligations for R&D have increased from $1.5 billion in FY 1951 to over $194 billion in 2025, with a per annum average growth of 6%. Obligations increased in approximately 72% of year-over-year periods, but when adjusted for inflation, increased in only 43% of year-over-year periods.
Preliminary FY 2025 federal obligations sit approximately $100 million, or 0.05%, lower than in FY 2024. In current dollars, this would put federal obligations at an all-time high. However,once adjusted for inflation, obligations have actually declined since FY 2021: values dropped by approximately 6% and 7% between FYs 2021 and 2022 and FYs 2022 and 2023, respectively. Since FY 2021, values dropped 13% by the end of FY 2025.
Figure 1 below includes a chart with current and inflation-adjusted federal obligations for R&D in billions of USD since 1951. Periods of recession are highlighted in gray.
Figure 1: Federal obligations for R&D, billions of current and constant (2017) USD, FYs 1951-2025
Most agencies are expected to experience declines in obligations
Four of the five federal agencies responsible for the largest federal R&D investment—the National Science Foundation and the war, energy, and health and human services departments—are all estimated to report final current dollar decreases in federal obligations for R&D from FY 2024 to 2025 (3%, 5%, 5%, and 2%, respectively).
Obligations at NASA are expected to remain flat over the two years.
Offsetting these decreases, the Department of Commerce is expected to increase $7.1 billion (263%) over the same period.
Note that the above six agencies represent an expected 95% of all federal R&D obligations in FY 2025.
All other agencies are cumulatively expected to experience an aggregated 8% decrease from FY 2024 to 2025.
Since 2019, the only major agency to experience a decrease in R&D obligations is NASA, which is down 20% or $2.7 billion. War (+59% or $34.6 billion), Energy (+22% or $8.5 billion), and Commerce (+553% or $8.3 billion) had the largest increases since 2019.
Figure 2 below includes a donut chart of federal R&D obligations by agency for all FYs from 2019 through 2025.
Figure 2: Federal obligations for R&D, by agency, billions of current USD, FYs 2019–25
State breakdown of federal agency R&D obligations
The largest amounts of federal obligations for R&D in FY 2024 were to California ($24.6 billion), Maryland ($21.5 billion), Virginia ($15.1 billion), Ohio ($10.3 billion), and Washington, D.C. ($10.1 billion). These were the only jurisdictions with at least $10 billion between all agencies.
Federal agencies had at least a cumulative $1 billion in R&D obligations distributed to each of 22 additional states and Washington, D.C.
The jurisdictions with the lowest amounts were among the nation’s least populated: Wyoming ($111 million), South Dakota ($130 million), Vermont ($190 million), North Dakota ($210 million), and Delaware ($250 million).
The breakdown of agencies from which these R&D dollars originate varies greatly. For example, in Alabama, approximately 84% of all obligations are from War, while in Idaho, the majority (71%) are from Energy, and in North Carolina, HHS is the majority (68%).
SSTI has created three interactive graphics, Figures 3, 4, and 5, based on the same data, each of which can be used to examine the data through different lenses. Figure 3 is focused on jurisdictions and includes a breakdown of the amount each agency had obligated; Figure 4 is the inverse, focusing on agencies and the jurisdictions where those dollars went; finally, Figure 5 makes it easy to see the share of each jurisdiction’s dollars from each agency. All three figures include only the most recent FY of confirmed data, FY 2024.
Figure 3: Federal obligations for research and experimental development, thousands of current USD, FY 2024
Figure 4: Federal obligations for research and experimental development, thousands of current USD, FY 2024
Figure 5: Agency breakdown of federal obligations for R&D, by state, thousands of current USD, FY 2024
Please refer to the Survey of Federal Funds for Research and Development page for notes on the data, as well as the methodology.