Research and Development: U.S. Trends and International Comparisons

U.S. Business R&D

Businesses have been the predominant performers of U.S. R&D dating back to the 1950s. Given its prominent role, year-to-year increases and declines in business R&D performance greatly influence the overall U.S. R&D total (Figure 4-2). The U.S. business sector is diverse, with wide differences in the goods and services provided across industries and in the various production inputs required, including for R&D. Historically, companies in manufacturing industries have accounted for two-thirds or more of U.S. business R&D, with the balance accounted for by companies in nonmanufacturing industries. However, most business R&D in the United States currently stems from a relative handful of industries, classified in both the manufacturing and nonmanufacturing sectors.

Key Characteristics of Domestic Business R&D Performance

U.S. business R&D is the R&D performed by companies in the domestic United States, including R&D paid for by the company itself (from company-owned, U.S.-located units or from company subsidiaries located overseas) and R&D paid for by others (such as other companies, domestic or foreign, including foreign parents of U.S. subsidiaries; the federal government; nonfederal government, domestic or foreign; and nonprofit or other organizations, domestic or foreign). NCSES’s annual Business R&D and Innovation Survey (BRDIS) and Business Research and Development Survey (BRDS) provide data on for-profit, nonfarm companies that are publicly or privately held in the United States.^{Up through 2016, the reference population for the Business R&D and Innovation Survey (BRDIS) did not include companies with fewer than 5 employees in the United States. Starting in 2017, the survey was renamed the Business R&D Survey (BRDS), and the reference population was revised to exclude companies with fewer than 10 employees.}

Industries That Perform the Most U.S. Business R&D

U.S. businesses performed $400.1 billion of R&D in 2017, 81% of which is accounted for by five business sectors and subsectors ($324.0 billion) (Table 4-9).^{The industry-level data presented in this section are obtained by classifying a company’s total R&D into a single industry, even if R&D activities occur in multiple lines of business. For example, if a company has $100 million in R&D expenses—$80 million in pharmaceuticals and $20 million in medical devices—the total R&D expense of $100 million is assigned to the pharmaceuticals industry because it is the largest component of the company’s total R&D expense (Shackelford 2012). However, most companies performed R&D in only one business activity area. In 2010, 86% of companies reported domestic R&D performed by and paid for by the company related to only one business activity. See Shackelford (2012) for an in-depth analysis of the relationship between business codes and industry codes.}

Chemicals manufacturing (North American Industry Classification System [NAICS] 325, which includes the pharmaceuticals industry) accounts for 19% of business R&D performance, most of which is from the pharmaceuticals and medicines industry.
Computer and electronic products manufacturing (NAICS 334) accounts for 20% of business R&D performance.
Transportation equipment manufacturing (NAICS 336, which includes the automobiles and aerospace industries) accounts for 13% of business R&D performance.
Information (NAICS 51, which includes the software publishing industry) accounts for about 20% of business R&D performance, two-fifths of which was in software publishing.
Professional, scientific, and technical (PST) services (NAICS 54, which includes the computer systems design and scientific R&D services industries) accounts for 9% of business R&D performance. About half of PST services is in the scientific R&D services industry, but R&D is also sizable in the computer systems design and related services industry (Table 4-9).

Table 4-9

Funds spent for business R&D performed in the United States, by source of funds and selected industry: 2017

(Millions of dollars and percent share)


Industry and NAICS code	All R&D^a		Paid for by the company^b		Paid for by others
					Total		Federal		Companies				All other organizations^d
					Total		Federal		Domestic		Foreign^c		All other organizations^d
empty	$millions													empty
All industries, 21–33, 42–81^c	400,100		339,036		61,065		24,277	i	17,494		18,404		890	i
Manufacturing industries, 31–33	257,227		216,155		41,072		18,889	i	6,229		15,434		520	i
Chemicals, 325	74,977		63,285		11,692		205		2,696		8,707		84	empty
Pharmaceuticals and medicines, 3254	66,202		55,229		10,973		186		2,685		8,019		83	empty
Other 325	8,775	empty	8,056	empty	719	empty	19	empty	11	empty	688	empty	1	empty
Machinery, 333	13,197		12,257		940		170		130	i	640		0	empty
Computer and electronic products, 334	78,575		69,942		8,633		3,937		s		s		s	empty
Electrical equipment, appliances, and components, 335	4,291		4,110		181		38		65		77	i	1	i
Transportation equipment, 336	53,292		34,629		18,663	i	14,433	i	s	empty	2,219		s	empty
Automobiles, trailers, and parts, 3361–63	23,881		21,137		2,745		s		s		s		s	empty
Aerospace products and parts, 3364	26,383		11,903		14,480	i	s	empty	1209	i	s		s	empty
Other 336	3,028	empty	1,589	empty	1,438	empty	s		s	empty	s	empty	s	empty
Manufacturing nec, other 31–33	32,895	empty	31,932	empty	963	i	106	i	s	empty	s	empty	s	empty
Nonmanufacturing industries, 21–23, 42–81	142,874		122,881		19,993		5,388		11,265	i	2,970		370	i
Information, 51	80,252		78,898		1,354		98		117		1138		1	empty
Software publishers, 5112	34,264		33,201		1,062		62		66		933		1	empty
Other 51	45,988	empty	45,697	empty	292	empty	36	empty	51	empty	205	empty	0	empty
Finance and insurance, 52	7,616		7,565		51		0		*	i	0		51	empty
Professional, scientific, and technical services, 54	36,922		18,972		17,951		5,256		10,874	i	1,530		291	i
Computer systems design and related services, 5415	13,327		11,669		1,658		995		339		201		123	empty
Scientific R&D services, 5417	17,321		2,817		14,504		3,200		10,024	i	1,160		120	i
Other 54	6,274	empty	4,486	empty	1,789	empty	1,061	empty	511	i	169	empty	48	i
Nonmanufacturing nec, other 21–23, 42–81	18,084	empty	17,446	empty	637	empty	34	empty	274	empty	302	empty	27	empty
empty	Percentage of sector or industry totals
All industries, 21–33, 42–81^c	100.0	empty	84.7	empty	15.3	empty	6.1	empty	4.4	empty	4.6	empty	0.2	empty
Manufacturing industries, 31–33	100.0	empty	84.0	empty	16.0	empty	7.3	empty	2.4	empty	6.0	empty	0.2	empty
Chemicals, 325	100.0	empty	84.4	empty	15.6	empty	0.3	empty	3.6	empty	11.6	empty	0.1	empty
Pharmaceuticals and medicines, 3254	100.0	empty	83.4	empty	16.6	empty	0.3	empty	4.1	empty	12.1	empty	0.1	empty
Other 325	100.0	empty	91.8	empty	8.2	empty	0.2	empty	0.1	empty	7.8	empty	0.0	empty
Machinery, 333	100.0	empty	92.9	empty	7.1	empty	1.3	empty	1.0	empty	4.8	empty	0.0	empty
Computer and electronic products, 334	100.0	empty	89.0	empty	11.0	empty	5.0	empty	s	empty	s	empty	s	empty
Electrical equipment, appliances, and components, 335	100.0	empty	95.8	empty	4.2	empty	0.9	empty	1.5	empty	1.8	empty	0.0	empty
Transportation equipment, 336	100.0	empty	65.0	empty	35.0	empty	27.1	empty	s	empty	4.2	empty	s	empty
Automobiles, trailers, and parts, 3361–63	100.0	empty	88.5	empty	11.5	empty	s	empty	s	empty	s	empty	s	empty
Aerospace products and parts, 3364	100.0	empty	45.1	empty	54.9	empty	s	empty	4.6	empty	s	empty	s	empty
Other 336	100.0	empty	52.5	empty	47.5	empty	s	empty	s	empty	s	empty	s	empty
Manufacturing nec, other 31–33	100.0	empty	97.1	empty	2.9	empty	0.3	empty	s	empty	s	empty	s	empty
Nonmanufacturing industries, 21–23, 42–81	100.0	empty	86.0	empty	14.0	empty	3.8	empty	7.9	empty	2.1	empty	0.3	empty
Information, 51	100.0	empty	98.3	empty	1.7	empty	0.1	empty	0.1	empty	1.4	empty	0.0	empty
Software publishers, 5112	100.0	empty	96.9	empty	3.1	empty	0.2	empty	0.2	empty	2.7	empty	0.0	empty
Other 51	100.0	empty	99.4	empty	0.6	empty	0.1	empty	0.1	empty	0.4	empty	0.0	empty
Finance and insurance, 52	100.0	empty	99.3	empty	0.7	empty	0.0	empty	*	empty	0.0	empty	0.7	empty
Professional, scientific, and technical services, 54	100.0	empty	51.4	empty	48.6	empty	14.2	empty	29.5	empty	4.1	empty	0.8	empty
Computer systems design and related services, 5415	100.0	empty	87.6	empty	12.4	empty	7.5	empty	2.5	empty	1.5	empty	0.9	empty
Scientific R&D services, 5417	100.0	empty	16.3	empty	83.7	empty	18.5	empty	57.9	empty	6.7	empty	0.7	empty
Other 54	100.0	empty	71.5	empty	28.5	empty	16.9	empty	8.1	empty	2.7	empty	0.8	empty
Nonmanufacturing nec, other 21–23, 42–81	100.0	empty	96.5	empty	3.5	empty	0.2	empty	1.5	empty	1.7	empty	0.1	empty

* = amount < $500,000; i = more than 50% of value imputed; s = suppressed for reasons of confidentiality or reliability.

NAICS = North American Industry Classification System; nec = not elsewhere classified.

^a All R&D is the cost of domestic R&D paid for by the respondent company and others outside of the company and performed by the company.

^bIncludes foreign subsidiaries of U.S. companies ($19.2 billion).

^cIncludes foreign parent companies of U.S. subsidiaries ($15.4 billion) and unaffiliated companies ($3.0 billion). Excludes funds from foreign subsidiaries to U.S. companies paid for through intercompany transactions ($19.2 billion).

^d Includes U.S. state government agencies and laboratories ($0.1 billion); U.S. universities, colleges, and academic researchers ($0.1 billion); and all other organizations located inside ($0.5 billion) and outside the United States ($0.2 billion).

Note(s):

Detail may not add to total because of rounding. Statistics are representative of companies located in the United States that performed or funded R&D. Industry classification was based on the dominant business code for domestic R&D performance, where available. For companies that did not report business codes, the classification used for sampling was assigned. This table excludes data for federally funded R&D centers.

Source(s):

National Center for Science and Engineering Statistics, National Science Foundation, and U.S. Census Bureau, Business Research and Development Survey, 2017.

Science and Engineering Indicators

These sectors and subsectors have R&D intensities that are generally higher than others in the national economy (Table 4-10). While the distribution of R&D performance shares among these five sectors or subsectors has been relatively stable since 2008, notable changes include a 4 percentage point drop in the shares for transportation equipment and PST services, as well as a 7 percentage point increase in the share of the information industry.

Table 4-10

Sales and R&D intensity for companies that performed or funded R&D, by selected industry: 2017

(Millions of U.S. dollars, percent, and thousands of domestic employees)


Industry and NAICS code	Domestic net sales (US$millions)^a	R&D intensity (%)^b	Domestic employment (thousands)^c
Industry and NAICS code	Domestic net sales (US$millions)^a	R&D intensity (%)^b	Total	R&D^d
All industries, 21–33, 42–81	9,682,692	4.1	19,893	1,609
Manufacturing industries, 31–33	5,423,997	4.7	9,919	916
Chemicals, 325	901,859	8.3	1,234	174
Pharmaceuticals and medicines, 3254	466,391	14.2	518	127
Other 325	435,468	2.0	716	47
Machinery, 333	323,082	4.1	839	85
Computer and electronic products, 334	697,118	11.3	1,200	258
Electrical equipment, appliances, and components, 335	113,434	3.8	291	29
Transportation equipment, 336	1,173,095	4.5	1,771	172
Automobiles, trailers, and parts, 3361–63	756,472	3.2	852	92
Aerospace products and parts, 3364	350,201	7.5	710	67
Other 336	66,422	4.6	209	13
Manufacturing nec, other 31–33	2,215,409	1.5	4,584	198
Nonmanufacturing industries, 21–23, 42–81	4,258,695	3.4	9,974	693
Information, 51	1,192,143	6.7	1,945	305
Software publishers, 5112	230,197	14.9	572	134
Other 51	961,946	4.8	1,373	171
Finance and insurance, 52	736,468	1.0	1,211	36
Professional, scientific, and technical services, 54	400,375	9.2	1,330	235
Computer systems design and related services, 5415	152,271	8.8	456	78
Scientific R&D services, 5417	69,134	25.1	283	86
Other 54	178,970	3.5	591	71
Nonmanufacturing nec, other 21–23, 42–81	1,929,709	0.9	5,488	117

NAICS = North American Industry Classification System; nec = not elsewhere classified.

^aDollar values for goods sold or services rendered by R&D-performing or R&D-funding companies located in the United States to customers outside of the company, including the U.S. federal government, foreign customers, and the company's foreign subsidiaries. Included are revenues from a company's foreign operations and subsidiaries and from discontinued operations. If a respondent company is owned by a foreign parent company, sales to the parent company and to affiliates not owned by the respondent company are included. Excluded are intracompany transfers, returns, allowances, freight charges, and excise, sales, and other revenue-based taxes.

^b R&D intensity is the cost of domestic R&D paid for by the respondent company and others outside of the company and performed by the company divided by domestic net sales of companies that performed or funded R&D.

^c Data recorded on 12 March represent employment figures for the year.

^d Includes researchers, R&D managers, technicians, clerical staff, and others assigned to R&D groups.

Note(s):

Detail may not add to total because of rounding. Sales, R&D intensity, and total domestic employment statistics are representative of companies located in the United States that performed or funded R&D; R&D employment statistics are representative of companies located in the United States that performed R&D. Industry classification was based on the dominant business code for domestic R&D performance, where available. For companies that did not report business codes, the classification used for sampling was assigned. This table excludes data for federally funded R&D centers.

Source(s):

National Center for Science and Engineering Statistics, National Science Foundation, and U.S. Census Bureau, Business Research and Development Survey, 2017.

Science and Engineering Indicators

Sources of Funding for U.S. Business R&D

Business R&D performance is primarily funded by the companies themselves. In 2017, 85% of U.S. business R&D performance was funded mainly by companies’ own funds. The vast majority of these funds came from company units owned and located in the United States (80%), with a small amount (nearly 5%) from companies’ foreign subsidiaries (Table 4-11). The remainder (15%) came from R&D performed by the company but paid for by others. The federal government is the largest of these sources, funding about 6% of business R&D performance in 2017.

Table 4-11

Funds spent for business R&D performed in the United States: Selected years, 2010–17

(Millions of dollars and percent share)


Sector	2010	2012	2014	2015	2016	2017
$millions
U.S. total R&D	406,580	433,619	475,418	493,687	515,305	542,222
All business R&D^a	278,977	302,250	340,728	355,821	374,685	400,100
Paid for by the company	221,706	247,280	282,570	296,677	317,731	339,036
From company-owned, U.S.-located units	218,187	242,674	277,272	289,892	306,611	319,796
From foreign subsidiaries	3,519	4,606	5,298	6,785	11,120	19,240
Paid for by others	57,271	54,970	58,158	59,144	56,954	61,065
Federal	34,199	30,621	26,554	26,990	23,772	24,277
Domestic companies	11,013	11,624	13,227	14,595	14,239	17,494
Foreign companies	11,015	12,093	17,246	16,317	17,692	18,404
Foreign parent^b	7,102	8,486	13,407	12,579	14,766	15,426
Unaffiliated companies	3,913	3,607	3,839	3,738	2,926	2,978
All other organizations^c	1,044	632	1,131	1,242	1249	890
Source of funds as a percentage of all business R&D
All business R&D^a	100.0	100.0	100.0	100.0	100.0	100.0
Paid for by the company	79.5	81.8	82.9	83.4	84.8	84.7
From company-owned, U.S.-located units	78.2	80.3	81.4	81.5	81.8	79.9
From foreign subsidiaries	1.3	1.5	1.6	1.9	3.0	4.8
Paid for by others	20.5	18.2	17.1	16.6	15.2	15.3
Federal	12.3	10.1	7.8	7.6	6.3	6.1
Domestic companies	3.9	3.8	3.9	4.1	3.8	4.4
Foreign companies	3.9	4.0	5.1	4.6	4.7	4.6
Foreign parent^b	2.5	2.8	3.9	3.5	3.9	3.9
Unaffiliated companies	1.4	1.2	1.1	1.1	0.8	0.7
All other organizations^c	0.4	0.2	0.3	0.3	0.3	0.2

^a Includes companies located in the United States that performed or funded R&D. Data in this table represent an aggregate of all industries in the North American Industry Classification System codes 21–33 and 42–81.

^b Includes foreign parent companies of U.S. subsidiaries.

^c Includes U.S. state government agencies and laboratories, foreign agencies and laboratories, and all other organizations located inside and outside the United States.

Note(s):

Detail may not add to total because of rounding. Industry classification was based on the dominant business code for domestic R&D performance, where available. For companies that did not report business codes, the classification used for sampling was assigned. This table excludes data for federally funded R&D centers.

Source(s):

National Center for Science and Engineering Statistics, National Science Foundation, Business R&D and Innovation Survey (BRDIS), Business Research and Development Survey (BRDS) (annual series).

Science and Engineering Indicators

The most notable change since 2010 is the declining role of federal funding, falling from 12% in 2010 to 6% in 2016 and 2017 (Table 4-11). In addition, there are some noteworthy differences when more narrowly defined sectors and industries are considered, particularly for the five top R&D-performing sectors and subsectors previously discussed (see Table 4-9).

Company Size and U.S. Business R&D

In 2017, the largest companies (i.e., those with 25,000 or more domestic employees) performed over a third (37%) of U.S. business R&D (Table 4-12). Micro companies (5–9 employees) and small companies (10–49 employees) accounted together for about 3%. The remaining 60% was distributed among the size classifications between these extremes. The distribution of business R&D performance by company size has not greatly changed in recent years. Nonetheless, a more extensive NCSES analysis of the Business R&D and Innovation Survey data from 2009–15 concluded that R&D performance by larger-sized companies rebounded from the Great Recession considerably better than small companies and micro companies (see Anderson and Kindlon ).

Table 4-12

Funds spent for business R&D performed in the United States, by size of company: Selected years, 2010–17

(Millions of dollars and percent share)


Size of company (number of domestic employees)	Millions of dollars											Percentage of all business R&D
Size of company (number of domestic employees)	2010	2012		2014		2015		2016		2017		2010	2012	2014	2015	2016	2017
All business domestic R&D^a	278,977	302,250	empty	340,728	empty	355,821	empty	374,685	empty	400,100	empty	100.0	100.0	100.0	100.0	100.0	100.0
Micro companies^b	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty
5–9	3,851	2,926	i	3,295	i	2,988	i	1,581	i	NA	empty	1.4	1.0	1.0	0.8	0.4	NA
Small companies	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty
10–24^c	8,722	6,915	i	7,177	i	NA	empty	NA	empty	NA	empty	3.1	2.3	2.1	NA	NA	NA
25–49	8,624	7,195	i	8,428	i	NA	empty	NA	empty	NA	empty	3.1	2.4	2.5	NA	NA	NA
10–19^c	NA	NA	empty	NA	empty	5,680	i	4,958	i	3,311	empty	NA	NA	NA	1.6	1.3	0.8
20–49^c	NA	NA	empty	NA	empty	10,249	i	9,662	i	9,435	empty	NA	NA	NA	2.9	2.6	2.4
Medium companies	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty
50–99	8,855	9,182	i	10,178	i	11,509	empty	9,298	empty	10,141	empty	3.2	3.0	3.0	3.2	2.5	2.5
100–249	11,866	12,480	empty	13,492	empty	13,602	empty	14,875	empty	17,216	empty	4.3	4.1	4.0	3.8	4.0	4.3
Large companies	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty	empty
250–499	10,283	11,264	empty	12,203	empty	13,553	empty	13,092	empty	14,103	empty	3.7	3.7	3.6	3.8	3.5	3.5
500–999	10,117	11,484	empty	13,262	empty	15,217	empty	14,450	empty	17,871	empty	3.6	3.8	3.9	4.3	3.9	4.5
1,000–4,999	48,228	50,691	empty	57,551	empty	58,094	empty	63,971	empty	65,112	empty	17.3	16.8	16.9	16.3	17.1	16.3
5,000–9,999	27,463	30,483	empty	38,202	empty	38,838	empty	40,633	empty	40,198	empty	9.8	10.1	11.2	10.9	10.8	10.0
10,000–24,999	41,835	49,493	empty	54,445	empty	59,328	empty	65,594	empty	73,485	empty	15.0	16.4	16.0	16.7	17.5	18.4
25,000 or more	99,133	110,138	empty	122,495	empty	126,763	empty	136,571	empty	149,227	empty	35.5	36.4	36.0	35.6	36.4	37.3

i = more than 50% of value imputed; NA = not available.

^aR&D performed by companies in the domestic United States. Includes industries in NAICS 21–33, 42–81.

^b Data from the Business R&D and Innovation Survey (BRDIS; 2008–16) do not include companies with fewer than 5 employees. Data from the Business Research and Development Survey (BRDS; 2017) do not include companies with fewer than 10 employees. (Data on companies with 1–9 employees will be collected by the Annual Business Survey.)

^c Employee size categories have been revised to match international classifications starting in 2015.

Note(s):

Detail may not add to total because of rounding. This table excludes data for federally funded R&D centers.

Source(s):

National Center for Science and Engineering Statistics, National Science Foundation, Business R&D and Innovation Survey (BRDIS), Business Research and Development Survey (BRDS) (annual series).

Science and Engineering Indicators

Cross-National Comparisons of Business R&D

The industries currently predominant in performing business R&D in the other largest R&D-performing countries exhibit both similarities and differences to those in the United States. This section analyzes cross-national comparisons for the United States, France, Germany, the United Kingdom, China, Japan, and South Korea (Table 4-13). Corresponding statistics for India are not presently available. The data analyzed come from OECD’s Analytical Business Enterprise R&D (ANBERD) database (OECD 2019a). The industry classification used in this section is based on the International Standard Industrial Classification of All Economic Activities (ISIC), Revision 4, for all countries (including the United States). The ISIC differs somewhat from NAICS, which is used elsewhere in this report to analyze the U.S. trends.^{ISIC Revision 4 was released by the United Nations Statistics Division in August 2008. For an overview of the classification structure, comparisons with earlier editions, and background, see https://unstats.un.org/unsd/cr/registry/regcst.asp?Cl=27.} Only those industries with comparatively higher levels of annual R&D performance are included in the following analysis. For a more complete listing of industries, see the OECD ANBERD database. (All amounts and calculations are in current PPP dollars, unless otherwise noted. The text below focuses on comparing the shares of national R&D performed by differing industries within countries; the associated dollar amounts are listed in Table 4-13.)

Table 4-13

Business expenditures for R&D, by selected countries and top R&D-performing industries: 2016 or most recent year

(PPP millions of current dollars and percent share)


Industry	ISIC Rev.4		United States (2016)	France (2016)	Germany (2016)	United Kingdom (2016)	China (2016)	Japan (2016)	South Korea (2015)
Industry	Section	Division	United States (2016)	France (2016)	Germany (2016)	United Kingdom (2016)	China (2016)	Japan (2016)	South Korea (2015)
PPP current $millions
Total business enterprise	A–U	1–99	374,685	40,495	81,739	31,812	349,685	129,752	59,644
Manufacturing	C	10–33	250,533	20,242	69,422	13,166	304,342	112,766	53,446
Chemicals and chemical products	empty	20	8,947	1,242	5,091	688	26,623	8,275	3,136
Pharmaceuticals, medicinal chemical, and botanical products	empty	21	64,628	1068	5,878	548	14,066	13,168	1,576
Computer, electronic, and optical products	empty	26	77,385	4,836	9,936	1,560	57,494	25,599	29,893
Motor vehicles, trailers, and semi-trailers	empty	29	22,042	2,904	28,478	4,220	30,198	34,042	7,550
Other transport equipment	empty	30	29,233	3,937	2,635	2,595	13,235	1087	1011
Air and spacecraft and related machinery	empty	303	26,645	3,590	2,194	2,369	NA	754	275
Total services	G–U	45–99	120,230	18,897	11,779	18,015	NA	15,310	4,802
Information and communication	J	58–63	86,495	4,926	4,334	4,573	NA	5,706	2,470
Publishing activities	empty	58	33,574	1,407	NA	118	NA	18	1,620
Software publishing	empty	582	33,495	1,383	NA	47	NA	NA	1,589
Computer programming, consultancy, and related activities	empty	62	15,747	2,283	3,669	2,354	NA	2,094	255
Professional, scientific, and technical activities	M	69–75	21,848	10,487	6,524	10,242	NA	8,312	1,391
Scientific R&D	empty	72	14,842	4,712	2,940	7,625	NA	7,641	402
Percentage of total business enterprise
Total business enterprise	A–U	1–99	100.0	100.0	100.0	100.0	100.0	100.0	100.0
Manufacturing	C	10–33	66.9	50.0	84.9	41.4	87.0	86.9	89.6
Chemicals and chemical products	empty	20	2.4	3.1	6.2	2.2	7.6	6.4	5.3
Pharmaceuticals, medicinal chemical, and botanical products	empty	21	17.2	2.6	7.2	1.7	4.0	10.1	2.6
Computer, electronic, and optical products	empty	26	20.7	11.9	12.2	4.9	16.4	19.7	50.1
Motor vehicles, trailers, and semi-trailers	empty	29	5.9	7.2	34.8	13.3	8.6	26.2	12.7
Other transport equipment	empty	30	7.8	9.7	3.2	8.2	3.8	0.8	1.7
Air and spacecraft and related machinery	empty	303	7.1	8.9	2.7	7.4	NA	0.6	0.5
Total services	G–U	45–99	32.1	46.7	14.4	56.6	NA	11.8	8.1
Information and communication	J	58-63	23.1	12.2	5.3	14.4	NA	4.4	4.1
Publishing activities	empty	58	9.0	3.5	NA	0.4	NA	0.0	2.7
Software publishing	empty	582	8.9	3.4	NA	0.1	NA	NA	2.7
Computer programming, consultancy, and related activities	empty	62	4.2	5.6	4.5	7.4	NA	1.6	0.4
Professional, scientific, and technical activities	M	69–75	5.8	25.9	8.0	32.2	NA	6.4	2.3
Scientific R&D	empty	72	4.0	11.6	3.6	24.0	NA	5.9	0.7

NA = not available.

ISIC Rev.4 = International Standard Industrial Classification of All Economic Activities, Revision 4; PPP = purchasing power parity.

Note(s):

Detail may not add to total because of rounding. Industry classifications for all countries are based on main activity. The U.S. business R&D data are from the U.S. Business R&D and Innovation Survey 2016 (cross-walked to the ISIC Rev. 4 classifications). In general, the table includes industries with annual R&D expenditures of $10 billion or more (i.e., each country's largest R&D performers). See the Organisation for Economic Co-operation and Development's (OECD's) ANalytical Business Enterprise Research and Development (ANBERD) database for a more detailed set of industries by country.

Source(s):

OECD, ANalytical Business Enterprise Research and Development (ANBERD) database.

Science and Engineering Indicators

Overall, the manufacturing sector accounted for a substantially higher share of overall business R&D in Germany, Japan, South Korea, and China (85% to 90%) relative to the United States, France, and the United Kingdom (41% to 67%) (Table 4-13). For Germany, within manufacturing, motor vehicles, trailers, and semi-trailers (ISIC 29, 35%) and computer, electronic, and optical products (ISIC 26, 12%) accounted for substantial levels of business R&D. For Japan, motor vehicles, trailers, and semi-trailers (ISIC 29, 26%), computer, electronic, and optical products (ISIC 26, 20%), and pharmaceuticals, medicinal chemical, and botanical products (ISIC 21, 10%) were the three largest R&D-performing sectors in 2016. For South Korea, computer, electronic, and optical products (ISIC 26, 50%) and motor vehicles, trailers, and semi-trailers (ISIC 29, 13%) were important sectors. Most of China’s business R&D in 2016 was conducted in manufacturing (87%) but is more diverse among manufacturing industries than the other countries analyzed here. Computer, electronic, and optical products (ISIC 26, 16%), chemicals and chemical products (ISIC 20, 8%), motor vehicles, trailers, and semi-trailers (ISIC 29, 9%), and the other manufacturing industries all played important roles in China.

Based on ISIC, the manufacturing section (ISIC 10–33) accounted for about two-thirds (67%) of the overall business R&D performance in the United States in 2016. The three largest sectors were computer, electronic, and optical products (ISIC 26, 21%); pharmaceuticals, medicinal chemical, and botanical products (ISIC 21, 17%); and the air and spacecraft and related machinery industry (ISIC 303, 7%). These shares are similar to those reported earlier in this report based on the NAICS categories.

In addition to manufacturing, a comprehensive group encompassing all services (ISIC 45–99) accounted for most of the rest of U.S. business R&D in 2016 ($120.2 billion, or 32%) (Table 4-13), with information and communication (ISIC 58–63, 23%) and PST activities (ISIC 69–75, 6%) playing important roles.

France and the United Kingdom were exceptions to the manufacturing emphasis, given the large shares of R&D that occurred in services industries (Table 4-13). For France, 47% of business R&D came from services, with 26% from PST activities (ISIC 69–75) and 12% from information and communication (ISIC 58–63). For the United Kingdom, 57% of business R&D comprised services: 32% from PST activities (ISIC 69–75), and 14% from information and communication (ISIC 58–63).

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January 15, 2020

SCIENCE & ENGINEERING INDICATORS