Useful Stats: Growth in real business R&D expenditures comes to a halt in 2023

From 2022 to 2023, domestic R&D expenditures increased 4%, or $29 billion, but remained nearly unchanged when adjusted for inflation. This apparent slowdown follows a streak averaging nearly 12% ($59 billion) year-over-year growth from 2018 to 2022, and 8% over the past decade from 2014 to 2023. Adjusting for inflation paints a different picture of the growth trends, with a more modest annual average of 8% from 2018 to 2022 and 6% over the past decade. In this edition of Useful Stats, SSTI uses new Business Enterprise R&D (BERD) survey data to explore business R&D expenditures since 2009. Then, we present the data by sector and industry, allowing for closer analysis of which business R&D see the most investment in the U.S. 

Refer to the Data Notes section at the end of this article for more details on the data and its limitations. 

A national overview of BERD data

Over the past decade, from 2014 to 2023, domestic business R&D expenditures appear to have more than doubled, with a 112%, or $381 billion, increase. Adjusted for inflation, however, values have increased by 65%, or approximately $200 billion in 2009 USD.  

Neither current nor constant USD BERD values have dropped since recovering from the Great Recession of 2008, increasing every year-over-year period since 2010-2011.  

The most recent increase, from 2022 to 2023, however, was only 0.20% adjusted for inflation—practically zero growth. The most recent year to have sub-one percent growth was from 2010 to 2011, which was also the first year of growth following the 2008 Great Recession.  

Refer to Figure 1 below for more details on these trends and more.

Figure 1: R&D paid for by the company and others and performed by the company, 2009-2023

But which industries are driving this period of sustained growth? To begin to answer this question, SSTI broke BERD expenditures down into two major industry categories: manufacturing and nonmanufacturing.

Over the past decades, BERD expenditures by major fields have shifted from a high proportion of manufacturing industries to a near even split; new 2023 data reflect this trend with a near identical breakdown as the prior two years, at approximately 55% manufacturing industries and 45% nonmanufacturing industries. Refer to Figure 2 below for more detail on these trends.

Expenditures in manufacturing, however, have not decreased; instead, they have merely increased at a slower rate than those in nonmanufacturing. Over the past decade, manufacturing industry BERD expenditures have increased by 68%, or $194 billion, while nonmanufacturing BERD expenditures have grown 202% or $264 billion.

In real dollars, the manufacturing industry’s BERD expenditures increased by 30% over the same period, while its nonmanufacturing counterparts increased by 134%. 

Figure 2: Breakdown of R&D paid for by the company and others and performed by the company, 2009-2023

Digging deeper, the BERD survey moves beyond the two-digit NAICS sector and provides details at the six-digit national industry level. SSTI has compiled the latest release of BERD survey data, broken down by industry, into a sunburst chart in Figure 3, with data on both domestic and worldwide R&D paid for by the company and others, and performed by the company, from 2009 to 2023.  

Figure 3 is scaled by the BERD expenditures of each slice, which can be viewed by hovering over each. Clicking on any slice will zoom in, revealing deeper layers of NAICS industries when applicable. 

Figure 3: Sunburst of R&D paid for by the company and others and performed by the company, by industry

Data Notes

This edition of Useful Stats uses data from the new 2023 release of the BERD survey. The BERD survey is the primary source of information on R&D expenditures and R&D employees of for-profit, publicly or privately held, nonfarm businesses with 10 or more employees in the U.S. Note that, starting from survey year 2018 onwards, companies that have performed or funded under $50,000 of R&D were excluded from tabulation. While this affects compatibility of the data before and after this tabulation change, the effects are estimated to be very small. Refer to the BERD survey page for more detail on the data, methodology, and other information.

SSTI provides both domestic R&D and worldwide R&D in its visuals. The text of this article only covers domestic R&D unless otherwise stated. Since 2009, worldwide R&D has been approximately 22% larger than domestic R&D.

SSTI used Federal Reserve Bank of Minneapolis Consumer Price Index values to inflation-adjust the data used in this visual. Annual average CPI(-U) to the tenth place was used, which may cause higher inaccuracy than online calculators, which use more specificity.  

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.