1 These data time series and additional statistics are part of the NCSES National Patterns of R&D Resources series released yearly and can be accessed on the NCSES website at https://www.nsf.gov/statistics/natlpatterns/. In addition to the data presented in this section’s figures and tables, NCSES statistics on U.S. R&D performance go back to 1953 and provide details by R&D performers, funders, and type of R&D.

2 In this report, dollars adjusted for inflation (i.e., constant dollars) are based on the GDP implicit price deflator (currently in 2012 dollars) as published by the Department of Commerce, Bureau of Economic Analysis (BEA) (https://www.bea.gov/iTable/index_nipa.cfm). Note that GDP deflators are calculated on an economy-wide scale and do not explicitly gauge R&D.

3 Due to sample variability in the data for the business R&D component (particularly the variability for 2000), the compound annual growth rate of the U.S. R&D total over the 2000–10 period fails (but only barely so) to exceed the corresponding rate of growth of GDP at a 90% confidence level.

4 Due to sample variability in the data for the business R&D component, the calculated R&D-to-GDP ratios for 1964, 2009, and 2017 are not significantly different from one another at a 90% confidence level.

5 Starting in 2016, the business R&D data reported by the National Patterns series include the R&D expenditures reported by microbusinesses (generally, companies with fewer than 10 employees). These new data come from NCSES surveys fielded for 2016 and onward: the 2016 Business R&D and Innovation Survey–Microbusiness, which collected statistics on the R&D activities of businesses with 1–4 employees, and for 2017–19, the Annual Business Survey (ABS), which collected statistics on the R&D activities of businesses with 1–9 employees. The totals for business R&D performance are $4 billion to $5 billion higher for 2016 and beyond as a result of this microbusiness R&D being included.

6 The data for higher education R&D appearing in this report adjust the academic fiscal year basis of NCSES’s Higher Education Research and Development Survey data to calendar year and net out pass-throughs of research funds to remove double counting in the national totals (see NCSES National Patterns of R&D Resources: https://www.nsf.gov/statistics/natlpatterns/). Accordingly, the higher education data included in this report differ from those cited in the Indicators 2022 thematic report “Academic Research and Development.”

7 FFRDCs are R&D-performing organizations that are exclusively or substantially financed by the federal government. An FFRDC is operated to provide R&D capability to serve federal agency mission objectives or, in some cases, to provide major facilities at universities for research and associated training purposes. Each FFRDC is administered by an industrial firm, a university, a nonprofit institution, or a consortium. NCSES maintains a current Master Government List of Federally Funded R&D Centers. For information on the current FFRDC count, along with its history, see https://www.nsf.gov/statistics/ffrdclist/.

8 An additional factor affecting the reported level of federal intramural R&D performance in 2016 and beyond is OMB’s adoption in 2016 of a definition of development that narrowed what is counted to experimental development. The largest effect has been the exclusion of DOD’s Budget Activity 6.7, Operational Systems Development, from the federal tally of R&D expenditures. As a result, the federal intramural R&D totals reported for 2016 and beyond (in Figure RD-2, Table RD-1, and elsewhere in this report) are approximately $5 billion lower than they would have been if tallied in the same way as 2015 and earlier. For a further discussion of this technical development in federal R&D reporting, see this report’s section Recent Trends in Federal Support for U.S. R&D.

9 R&D funding by business in this section refers to business funding for domestic business R&D performance plus business funding for FFRDCs and U.S. academic and nonprofit R&D performers.

10 R&D encompasses a wide range of activities, from research yielding fundamental knowledge in the physical, life, and social sciences; to research addressing national defense needs and such critical societal issues as global climate change, energy efficiency, and health care; to the development of platform or general-purpose technologies that can enable the creation and commercial application of new and improved goods and services. The most widely applied classification of these activities characterizes R&D as basic research, applied research, or experimental development (OECD 2015; OMB 2016; NSF 2018). This longstanding trio of categories has been criticized over the years as reinforcing the idea that creating new knowledge, invention, and innovation is a linear process beginning with basic research, followed by applied research and then development, and ending with the production and diffusion of new technologies and eventually commercially significant innovations. Nonetheless, alternative classifications that provide measurable distinctions, capture major differences in types of R&D, and are widely accepted as superior have yet to be developed. Despite the recognized limitations of the basic research–applied research–development classification framework, it remains useful in providing indications of differences in the motivation, expected time horizons, outputs, and types of investments associated with R&D projects.

11 The Organisation for Economic Co-operation and Development notes that in measuring R&D, one source of error is the difficulty of locating the dividing line between experimental development and the further downstream developmental activities needed to realize an innovation (OECD 2015:51–52). Most definitions of R&D set the cutoff at the point when a particular product or process reaches market readiness. At this point, the defining characteristics of the product or process are substantially set—at least for manufactured goods, if not also for services—and further work is aimed primarily at developing markets, engaging in preproduction planning, and streamlining the production or control system.

12 The data presented in this paragraph come from NCSES National Patterns of R&D Resources, annual series, 2010–20.

13 The arithmetic is straightforward to calculate type-of-R&D shares for past years, based on the time-series data reported annually in the NCSES National Patterns of R&D Resources series. Nonetheless, care must be taken in describing the trends for these shares over time. Although NCSES’s sectoral surveys of R&D expenditures have long and consistently used the Organisation for Economic Co-operation and Development Frascati Manual’s type-of-R&D definitions (OECD 2015), the survey instruments have occasionally been revised to improve the reliability of the responses received, most notably in the academic, business, federal funds, and FFRDC R&D expenditure surveys. Accordingly, some differences observed in the shares directly calculated from the supplemental table time-series data more nearly reflect the effects of these improvements in the type-of-R&D survey questions than changes in the type-of-R&D shares among R&D performers.

14 NCSES’s estimates for total global R&D are based on OECD’s Main Science and Technology Indicators (September 2021 edition) and from R&D statistics for additional countries assembled by UNESCO’s Institute for Statistics (March 2021 release). Presently, no database on R&D spending is comprehensive and consistent for all nations performing R&D. The OECD and UNESCO databases together provide R&D performance statistics for 163 countries, although the data are not current or complete for all. NCSES’s estimate of total global R&D reflects 119 countries, with reported annual R&D expenditures at or above $50 million annually, which accounts for most of the current global R&D.

15 U.S. GERD in this section differs slightly from the U.S. total R&D reported in the U.S. trends section. For consistency with international standards, U.S. GERD includes federal capital funding for federal intramural and nonprofit R&D (typically totaling just over $1 billion annually) in addition to what is reported as U.S. total R&D.

16 The International Comparison Program (ICP) is a global statistical initiative established to produce, among other measures, PPPs and internationally comparable price level indexes. It is managed by the World Bank with the support of the United Nations Statistical Commission. It is the largest data collection initiative for global price data. More information on the program is available at https://www.worldbank.org/en/programs/icp.

17 The ICP 2017 results were released in May of 2020. As part of this release, the 2011 benchmark data were also revised to incorporate updated data on expenditures, regional PPPs, population, and market exchange rates. More information on the data, methodology, and ICP revision policy is available at https://www.worldbank.org/en/programs/icp.

18 For more information on the NCSES business R&D surveys, refer to the Technical Appendix accompanying this report.

19 In 2010, 86% of companies reported domestic R&D performed and paid for by the company related to only one business activity. Similar findings are reported in a more recent analysis by Jankowski and Shackelford (2019). See both references for an in-depth analysis of industry classification methods.

20 See, for example, Knott and Vieregger (2020) for a recent discussion on the relationship between company size, R&D performance, and innovation.

21 In addition to the changes described in this paragraph, in 2015, following international guidance (OECD 2015), NCSES also implemented an updated size classification structure based on reported employment for business R&D.

22 The BRDI-M survey was conducted only once. Most questions from this survey are now included in the ABS.

23 ISIC, Rev.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.

24 For a more complete list of industries, see the OECD ANBERD database.

25 The data reported in this section draw primarily from the NCSES Survey of Federal Funds for Research and Development. The most recent edition is Volume 70, which provides data on actual federal R&D spending (obligations) for FY 2020 and preliminary data for FY 2021. For further details on this survey, see https://ncses.nsf.gov/pubs/nsf22324.

26 The analysis in this section focuses primarily on developments in federal R&D priorities and funding support over the course of the last decade. Nevertheless, there is an important and interesting story to tell about how the comparatively minor federal role in the nation’s science and research system up until World War II was reconsidered, redirected, and greatly enlarged, starting shortly after the end of the war and moving through the subsequent decades to the present. For a review of the essential elements of this evolving postwar federal role, see Jankowski (2013).

27 For a further account of this recent federal budget history, see Boroush (2015, 2016). Notable among the various interconnected developments over these years were the federal-wide spending reductions imposed by the enacted FY 2011 federal budget: the Budget Control Act of 2011, intended to address the then-ongoing national debt ceiling crisis, which commanded a 10-year schedule of budget caps and spending cuts; the budget sequestration provision, which ultimately took hold in the FY 2013 federal budget; and the Bipartisan Budget Act of 2013, which provided some subsequent relief from the deepening sequestration requirements, but only for the FY 2014 and FY 2015 budgets.

28 For a detailed account of the revision and its impact on federal agencies’ reports of their annual R&D spending in FY 2016 and beyond, see Pece and Jankowski (2021).

29 Data on annual federal budget authority for R&D provided in the NCSES report series on Federal R&D Funding by Budget Function (https://www.nsf.gov/statistics/fedbudget/) provides perspective. In the president’s federal government budget proposal for FY 2018, the proposed level of R&D funding was $117.8 billion; as the funding legislation was enacted by the Congress, the R&D funding total was $144.5 billion. For FY 2019, the president’s proposal was $123.7 billion; as enacted by Congress, it was $150.0 billion. In FY 2020, the president’s proposal was $142.4 billion, and it was $164.8 billion as enacted by Congress. For FY 2017, the proposed level was $153.9 billion; as enacted, it was $127.3 billion. But interpretation of the federal funding trend for that year is complicated by an OMB-mandated revision in the definition of R&D that reduced the official report of the enacted level of R&D by some $27 billion.

30 For a detailed account, based on recent NCSES data from the Survey of Federal Funds for Research and Development, Volume 70, FYs 2020 and 2021, see Pece (2022). Principal recipients of federal funding for COVID-19 related R&D were the Biomedical Advanced Research and Development Authority (BARDA) in HHS and the Defense Health Agency in DOD.

31 Data collected annually by NCSES on federal R&D funding include detail on the distribution of support for research (i.e., basic and applied research) across differing S&E fields.

32 Government R&D funding statistics compiled annually by OECD provide insights into how national government priorities for R&D differ across countries (OECD 2015). The GBARD indicator provides data on how a country’s overall government funding for R&D splits among a set of socioeconomic categories (e.g., defense, health, space, and general research). GBARD statistics are available for the United States and most of the other top R&D-performing countries discussed earlier in this report’s section Cross-National Comparisons of R&D Performance. (Corresponding GBARD data for China and India, however, are not currently available.)

33 Defense received 50% or more of the federal R&D budget in the United States for many years. The defense share was 63% in 1990 as the Cold War period waned but then dropped in subsequent years. Defense rose again in the first decade of the 2000s—in large part, reflecting post-9/11 security concerns—but it has been declining again in the most recent years. For the other countries, the defense share of government R&D funding has generally declined or remained at a stable, low level.

34 The treatment of GUF is one of the major areas of difficulty in making international R&D comparisons. In many countries, governments support academic research primarily through large block grants that are used at the discretion of each higher education institution to cover administrative, teaching, and research costs. Only the R&D component of GUF is included in national R&D statistics, but problems arise in identifying the amount of the R&D component and the objective of the research. Moreover, government GUF support is in addition to support provided in the form of earmarked, directed, or project-specific grants and contracts (funds that can be assigned to specific socioeconomic categories). In several large European countries (France, Germany, Italy, and the United Kingdom), GUF accounts for 50% or more of total government R&D funding to universities. In Canada, GUF accounts for about 38% of government academic R&D support. Thus, international data on academic R&D reflect not only relative international funding priorities but also funding mechanisms and philosophies regarded as the best methods for financing academic research.