federal agency r&d

The United States' 42 federally funded research and development centers (FFRDCs) received a record $26 billion in federal government funding in fiscal year 2022 — a nearly 6% increase compared to the previous year. FFRDCs expended $26.5 billion on R&D in FY 2022, marking the ninth consecutive year of nominal growth. On average, FFRDCs have increased R&D expenditures by 1.3% per annum since 2012. Yet when looking at only the three most recent years of available data, from FY 2020-2022, this average drops to just 0.4%.

A previous Digest article gave a broad overview of the most recent survey of Higher Education Research and Development (HERD) for FY 2021 (the most recent data available), including a breakdown of what field of studies receive the most R&D funding. The survey showed that the federal government funds the bulk of higher-ed R&D, and looking at each of its agencies can shed light on investment priorities. Within the federal government, Health and Human Services (HHS) funded the most higher-ed R&D activities by far (approximately $27.5 billion), followed by the Department of Defense (DoD; $7.4 billion) and National Science Foundation (NSF; $5.4 billion). A bulk of HHS funding went toward the life sciences ($24.2 billion), with engineering following behind at approximately $1 billion. DoD primarily funded engineering ($3.7 billion), followed by life sciences ($1.4 billion).

New fiscal year (FY) 2021 Higher Education Research & Development (HERD) survey data released by the National Science Foundation (NSF) reveals a $3.4 billion (4%) increase in research and development (R&D) spending by institutions of higher education ($86.5 to $89.9 billion), driven almost entirely by a decades high federal government R&D funding increase of $3 billion.

The Convergence Accelerator, a program developed by the National Science Foundation (NSF) to invest in research towards developing high-impact solutions for societal issues, requests topic ideas for the 2023 cohort in a Dear Colleague Letter Request for Information (DCL/RFI). This program follows a three-tiered process, including topic ideation and convergence research phases one and two. This RFI seeks input from industry, institutions of higher education, non-profits, state and local governments, and other interested parties and represents the beginning stages of topic ideation and precedes community workshops to develop the final convergence research tracks, anticipated in FY 2023.  Of particular interest to NSF are approaches to advance Critical and Emerging Technologies as described in the Multi-Agency Research and Development Priorities for FY 2023.

Federal funding is a major source of support for the science and engineering (S&E) activities of the nation’s institutions of higher education (IHEs). This week’s edition of Useful Stats shows that in 2019 (the most recent year for which data is available), the vast majority — 87.6 percent or $33.4 billion— of that federal support came from only three agencies: the Department of Health and Human Services (HHS), the National Science Foundation (NSF), and the Department of Defense (DoD). This analysis builds on our previous article using NSF’s data from the Survey of Federal Science and Engineering Support to Universities, Colleges, and Nonprofit Institutions to show that while the remaining agencies contributed relatively little to the national S&E effort of IHEs, there was still a wide range in the mix of agency funding at the state level in 2019.

The level of federal R&D funding within a state can have important implications for local innovation economies. As such, understanding the amount of federal R&D funding and which agencies provide that funding within a state can help regional innovation leaders in designing and implementing programs and policies. This edition of Useful Stats explores NSF’s recently updated data on federal R&D funding obligations in 2019 by state and agency.

Combining the adages “necessity is the mother of invention” and “two heads are better than one,” the best innovations often arise by broadening the community of minds focused toward addressing a particular problem or need. The Obama Administration took the concept of funding open innovation competitions toward specific issues to heart, encouraging federal agencies to use prizes and challenges as much as practical. Going a step further, Congress enacted legislation in 2011 to make it easier for federal agencies to use the cost-effective tool and the practice was maintained during the four years of the Trump Administration. With early signs suggesting the incoming Biden administration will see a return of many key policymakers and themes from his Democratic predecessor, there may also be a renewed focus on using challenges and problem-solving prize competitions to spur innovation and prosperity coming out of the pandemic. A recent Department of Energy press release adds further weight to this hypothesis and provides a good opportunity for prospective grant seekers to begin to familiarize themselves with the concept in anticipation future federal funding rounds.

Nearly three-quarters of all research and development was performed by the private sector in fiscal year 2016, though this share differed greatly across the states, according to an SSTI analysis of recently released data from the National Science Foundation’s National Center for Science and Engineering Statistics (NSF NCSES). Delaware showed the greatest concentration of business R&D (90.5 percent of all R&D in the state), while Tennessee had the most diversified R&D portfolio with a roughly even distribution of R&D performed by businesses, higher education and federally funded R&D centers (FFRDC’s). The interactive chart below shows the breakdown of performers of research and development for each state.

On July 31, OMB Director Mike Mulvaney distributed a memo outlining eight priority R&D subjects and five practices for leveraging R&D resources more effectively. The White House intends for the memo to serve as guidance in the development of budget submissions from the executive departments and agencies for FY 2020.  Basic and applied research are to be emphasized in the agency R&D plans, which would be a shift from data on recent trends released by the National Science Foundation the day before the Mulvaney memo. NSF found that the development side of R&D in the FY 2017 federal R&D obligations, passed in May of the first year of the Trump administration, increased by 7 percent from the year prior, while research expenditures actually declined by 3 percent.

The boost in federal R&D funds as a result of the 2009 stimulus package had a significant impact on local economic development, according to a new working paper from researchers at the University of Michigan. In “Local Fiscal Multiplier on R&D and Science Spending: Evidence from the American Recovery and Reinvestment Act” (ARRA), authors Yulia Chhabra, Margaret Levenstein, and Jason Owen-Smith look at changes in county-level employment in response to increased federal spending on R&D as a result of ARRA. The authors estimate causal effects of the ARRA R&D funding on local economic development, and find that, all else equal, every $1 million in new R&D spending due to the stimulus in a county led to 27 new jobs, with 25 of those being in the private sector. The authors estimate that the cost per each job-year was about $15,000, which is less than the reported costs of other types of federal stimulus programs.