Useful Stats: Higher Education R&D expenditures near $100 billion in FY 2022

Institutions of higher education spent $97.8 billion on research and development (R&D) activities in fiscal year (FY) 2022, an increase of nearly 9% over the prior year’s $89.8 billion. Over the past decade of available data, from FY 2013-2022, higher education R&D expenditures have increased 46%, from $67.1 to $97.8 billion. However, when adjusted for inflation, the growth is more modest at 17%.

This edition of Useful Stats explores the most recent Higher Education Research and Development (HERD) Survey release of 2022 data. Specifically, this article uses data from the past ten years of HERD in current and inflation-adjusted dollars, alongside a breakdown of HERD by the source of funds.

HERD over the past decade

Over the past decade, higher education R&D expenditures have increased by an average of 4% per year. HERD expenditures have increased every year since FY 2013, while the most recent years, from FY 2021-2022, had the most significant increase at 9%.

However, when adjusted for inflation, HERD expenditures increased an average of 2% per year, and saw decreases from FY 2013-2014 (-2%) and 2020-2021 (-1%).

Figure 1, below, shows HERD expenditures in both current and inflation adjusted (constant 2012) USD.

Figure 1: HERD expenditures in constant (2012) and current USD, FY 2013-2022.

By breaking these expenditures down, we can see that approximately 55% of FY 2022 HERD expenditures can be attributed to federal agency funding. This proportion of funding has grown steadily from a FY 2018 value of 53%, but represents a decrease since FY 2013’s nearly 59%.

Figure 2 shows a breakdown of HERD expenditures by source of funds.

Figure 2: HERD breakdown by source of funds, FY 2013-2022.

Over the past decade of available data, federally funded HERD has increased by an average of 4% per year and increased every year since FY 2015. The past two years have seen especially large growth with 7% and 10% increases from FY 2020-2021 and 2021-2022 respectively.

Nonfederal funding has, on the other hand, increased every fiscal year in the past decade, averaging 5% per year. Unlike federal funding, with the exception of FY 2021-2022, nonfederal funding has seen a decrease in growth rate since FY 2013.

The HERD survey breaks these values down further: federal funding is the sum of the various federal agencies, while nonfederal funding is the sum of institution, nonprofit, business, state and local government, and all other sources of funds.

Figure 3 provides a 10-year breakdown of this division.

Figure 3: Breakdown of federal and nonfederal HERD, fiscal years 2013-2022

Health and Human Services (HHS) has historically funded the largest portion of federal and overall HERD values. FY 2022 is no different: HHS accounted for 56% of all federally funded and 31% of total higher education R&D expenditures.

Institution funds—funds from the institution of higher education itself—make up the next largest share, with 25% of the total HERD value.

Refer to Figure 3 and HERD’s data release for more detailed information.

In coming issues, we will explore HERD in greater detail at the state and institution level, as well as by R&D field.