Higher Education R&D expenditures jumped 8%, or nearly $9 billion, from fiscal year (FY) 2023 to 2024, reaching an all-time high of over $117 billion, reveals new Higher Education R&D (HERD) survey data. The funding sources of HERD expenditures remain proportionally unchanged from the prior year, with all sources increasing, and the federal government ($5 billion) and institution funds ($2.5 billion) accounting for the largest dollar increases.
Adjusted for inflation, overall HERD expenditures increased by 5%—the second largest year-over-year increase in the past decade—while all sources of funds except business increased.
All data used in this article are from the HERD survey. Refer to the survey methodology and notes for more information on the data and its limitations. Select data was adjusted for inflation (constant 2000 USD) by SSTI using data from the Federal Reserve Bank of Minneapolis on the U.S. consumer price index for all urban consumers (CPI-U) at the tenths place.
A brief overview of national-level HERD expenditures
HERD expenditures have increased every year since FY 2000, with the federal government accounting for the majority of these expenditures. While federal funds for HERD have consistently remained around 55% of overall expenditures in recent years (ranging as high as 63% in FYs 2004 and 2005 and as low as 53% from FYs 2018 through 2020), institution funds now account for one-quarter of the total (was 20% in FY 2000, and as low as 17% in FYs 2004 and 2005).
Figure 1 breaks down overall HERD expenditures by source of funds from FY 2000 through 2024, both in current and constant 2000 USD. Even in constant dollars, annual higher education R&D activity doubled during the first quarter of the 21st century.
Figure 1: Higher education R&D expenditures (millions), by source of funds, FYs 2000-2024
Breaking HERD expenditures down by the type of R&D performed reveals that since FY 2010 there has been a shift away from basic research (67% of overall HERD in FY 2010, yet 63% in FY 2024), with slight increases to both applied research (25% to 27% over the same period) and experimental development (from 9% to 10%). [Note: Not discussed in the survey, but the change doesn’t seem as dramatic as one might expect from the consistent calls for more discovery-stage funding. The shift of share away from basic research may reflect a mix of higher input costs for later-stage research and efficiency gains from more computer-assisted R&D earlier in the process ~ Mark Skinner]
Figure 2 includes three pie charts, showing overall, federal, and nonfederal HERD expenditures, respectively, along with their makeup by type of R&D performed.
Figure 2: HERD expenditures in thousands of current USD at institutions in the standard form survey population, by source of funds and type of R&D
Shifting lenses again, this time to field of R&D, HERD expenditures have slightly shifted away from science since FY 2010 (from approximately 80% of all HERD in FY 2010 to 77% in FY 2024), and towards engineering (from approximately 15% to 16% over the same period) and non-S&E (from approximately 5% to 6% over the same period).
The fields with the largest percent increases from FY 2010 to 2024 are law (352%), visual and performing arts (341%), business management and business administration (265%), humanities (256%), aerospace, aeronautical, and astronautical engineering (223%), and bioengineering and biomedical engineering (179%).
While the non-S&E fields of law and visual and performing arts have some of the largest relative increases, they also have relatively low increases in dollar amounts since FY 2010 ($345 million and $234 million, respectively). It is worth noting that aerospace, aeronautical, and astronautical engineering, alongside bioengineering and biomedical engineering, had large relative increases in addition to their higher starting dollar amounts, having increased by $1.4 and $1.3 billion respectively to each sit over $2 billion in FY 2024.
The fields with the most historic HERD expenditures continue to dominate in terms of dollar increases: the life sciences increased by $31.8 billion and physical sciences by $2.8 billion, together making up 62% of the total growth of HERD expenditures in dollars from FY 2010 to 2024.
Note that the HERD survey further breaks down the life sciences and physical sciences, among other fields, in more detail. For example, within the life sciences, health sciences accounted for approximately two-thirds of the field’s growth in HERD expenditures since FY 2010.
For these trends and more, refer to Figure 3, which includes a tree map of HERD expenditures by R&D field for FYs 2010-2024. Clicking on any box will display more granular data when available.
Figure 3: HERD expenditures in thousands of current USD at institutions in the standard form survey population, by R&D field
This page 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.