Funding Sources of Academic R&D

Academic R&D spending has grown significantly over the past half century, reaching nearly $90 billion in 2021 compared with $255 million in 1953 (not adjusting for inflation) (NCSES HERD 2021: Table 1). The federal government has been the largest funder of academic R&D since 1953; in 2021, federal funding supported 55% of academic R&D spending. Academic institutions were the second largest source of funding for academic R&D, contributing 25% of the funds. The remainder was funded by businesses, nonprofit organizations, state and local governments, and other sources, such as overseas funding (Figure URD-4). The shares of funding provided by different sources have shifted gradually over time. The share contributed by the federal government has declined from 61% in 2012 to 55% in 2021 (Figure URD-5). The federal government’s emergency funding for academic R&D during the COVID-19 pandemic in 2020 and 2021 did not reverse this trend. Although the federal government overall contributes the greatest share of funds spent on academic R&D each year, in 2021, six agencies provided more than 90% of the federal funds spent in academic R&D (Table URD-1). The Department of Health and Human Services (HHS), largely through the National Institutes of Health (NIH), has provided more than half of federal support over that period.

Academic R&D expenditures, by source of funds: FYs 1953–2021
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Academic R&D expenditures, by source of funds: FYs 1953–2021

(Billions of constant 2012 dollars)
Fiscal year Federal government Institution funds Business State and local government All other sources
1953 1.0 0.2 0.1 0.3 0.2
1954 1.1 0.3 0.2 0.3 0.2
1955 1.1 0.3 0.2 0.3 0.2
1956 1.4 0.3 0.2 0.3 0.2
1957 1.4 0.3 0.2 0.4 0.2
1958 1.6 0.3 0.2 0.4 0.3
1959 1.9 0.4 0.2 0.5 0.3
1960 2.4 0.4 0.2 0.5 0.3
1961 3.0 0.4 0.2 0.6 0.3
1962 3.6 0.5 0.2 0.6 0.4
1963 4.4 0.5 0.2 0.7 0.4
1964 5.3 0.6 0.2 0.8 0.5
1965 6.0 0.7 0.2 0.8 0.5
1966 6.9 0.8 0.2 0.9 0.6
1967 7.5 1.0 0.3 0.9 0.6
1968 8.0 1.1 0.3 0.9 0.7
1969 7.8 1.1 0.3 1.0 0.7
1970 7.6 1.1 0.3 1.0 0.8
1971 7.6 1.2 0.3 1.1 0.8
1972 7.6 1.3 0.3 1.1 0.8
1973 7.9 1.3 0.3 1.2 0.8
1974 7.4 1.4 0.4 1.1 0.8
1975 7.7 1.4 0.4 1.1 0.9
1976 8.0 1.4 0.4 1.2 0.9
1977 8.2 1.5 0.4 1.1 0.9
1978 8.5 1.7 0.5 1.2 1.0
1979 9.3 1.9 0.5 1.2 0.9
1980 9.7 2.0 0.6 1.2 1.0
1981 9.9 2.2 0.6 1.2 0.9
1982 9.7 2.3 0.7 1.3 1.0
1983 9.8 2.6 0.8 1.2 1.1
1984 10.3 2.7 0.9 1.3 1.2
1985 11.1 3.0 1.0 1.4 1.3
1986 12.1 3.4 1.3 1.6 1.3
1987 12.9 3.8 1.4 1.8 1.5
1988 13.9 4.0 1.5 1.9 1.6
1989 14.7 4.4 1.6 2.0 1.7
1990 15.1 4.7 1.8 2.1 1.9
1991 15.6 5.1 1.8 2.2 2.0
1992 16.5 5.3 1.9 2.2 2.1
1993 17.4 5.2 2.0 2.3 2.2
1994 18.0 5.4 2.0 2.2 2.2
1995 18.6 5.6 2.1 2.4 2.2
1996 18.9 5.7 2.2 2.5 2.2
1997 19.2 6.3 2.3 2.6 2.3
1998 20.1 6.7 2.5 2.6 2.5
1999 21.1 7.1 2.7 2.7 2.6
2000 22.5 7.6 2.8 2.8 2.9
2001 24.1 8.3 2.8 2.9 3.0
2002 27.0 8.8 2.7 3.1 3.3
2003 30.6 9.3 2.6 3.2 3.5
2004 33.4 9.1 2.5 3.4 3.4
2005 34.2 9.4 2.6 3.4 3.5
2006 34.3 10.0 2.7 3.3 3.5
2007 33.7 10.5 2.9 3.4 3.8
2008 34.0 11.0 3.0 3.6 4.1
2009 35.2 11.7 3.4 3.8 4.5
2010 39.0 12.4 3.3 4.0 5.0
2011 41.5 12.8 3.2 3.9 5.0
2012 40.2 13.6 3.3 3.7 5.0
2013 38.8 14.7 3.5 3.6 5.3
2014 36.7 15.2 3.6 3.8 5.7
2015 36.2 15.9 3.8 3.7 6.0
2016 36.7 17.0 4.0 3.8 6.5
2017 37.4 17.5 4.1 3.9 6.9
2018 38.0 18.3 4.3 3.9 7.2
2019 39.7 18.8 4.5 4.0 7.5
2020 40.6 19.4 4.6 4.0 7.4
2021 41.6 19.0 4.3 4.0 7.0
Note(s):

Federal data include funds from the American Recovery and Reinvestment Act of 2009 (ARRA). ARRA was an important source of federal expenditures for academic R&D during the economic downturn and recovery from 2010 through 2012 and continued to contribute to such spending, although in smaller amounts, in 2013 and 2014. By 2015, all ARRA funds had been spent. Gross domestic product deflators come from the Bureau of Economic Analysis and are available at https://www.bea.gov/data/gdp/gross-domestic-product (accessed September 2022).

Source(s):

National Center for Science and Engineering Statistics, Higher Education Research and Development Survey.

Science and Engineering Indicators

Share of academic R&D expenditures, by source of funds: FYs 2012–21
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Share of academic R&D expenditures, by source of funds: FYs 2012–21

(Percent)
Fiscal year Federal government Institution funds Nonprofit organizations Business State and local government All other sources
2012 61.07 20.67 6.12 4.98 5.68 1.47
2013 58.86 22.29 5.80 5.24 5.52 2.29
2014 56.49 23.42 5.90 5.55 5.81 2.84
2015 55.21 24.20 6.16 5.84 5.62 2.97
2016 54.05 24.95 6.43 5.87 5.63 3.07
2017 53.56 25.08 6.84 5.90 5.56 3.06
2018 52.97 25.53 6.89 5.97 5.46 3.17
2019 53.25 25.25 6.81 6.06 5.40 3.23
2020 53.47 25.43 6.66 6.01 5.33 3.10
2021 54.77 25.02 6.23 5.70 5.28 3.00
Source(s):

National Center for Science and Engineering Statistics, Higher Education Research and Development Survey.

Science and Engineering Indicators

Federal agency support of academic R&D spending: FYs 2012, 2017, and 2021

(Billions of constant 2012 dollars and percent)

DOD = Department of Defense; DOE = Department of Energy; HHS = Department of Health and Human Services; NASA = National Aeronautics and Space Administration; NSF = National Science Foundation; USDA = Department of Agriculture.

Note(s):

Gross domestic product deflators come from the Bureau of Economic Analysis and are available at https://www.bea.gov/data/gdp/gross-domestic-product (accessed September 2022).

Source(s):

National Center for Science and Engineering Statistics, Higher Education Research and Development Survey.

Science and Engineering Indicators

The share of R&D spending funded by the academic institutions themselves rose concurrently with the decrease in the share funded by the federal government, increasing from 21% in 2012 to 25% in 2021 (Figure URD-5). Between 2012 and 2021, spending funded by institutional support increased by nearly 40% (Figure URD-4). Nonprofit organizations funded about 6% of academic R&D spending in 2021, representing an increase of about 17% between 2012 and 2021 in constant dollars (NCSES HERD 2021: Table 2). Business also funded around 6% of academic R&D spending in 2021 (Figure URD-5), increasing by about 30% between 2012 and 2021 in constant 2012 dollars (Figure URD-4), reflecting in part industry’s growing reliance on research results flowing from academia. State and local governments funded around 5% of academic R&D spending in 2021 (Figure URD-5), which, in constant dollars, reflected an increase of approximately 8% since 2012 (Figure URD-4).

All other sources of support for academic R&D—such as foreign governments, other universities, or gifts from individual donors directed to research funding—provided a relatively small share of funding for U.S. academic R&D. In 2021, those sources supported 3% of academic R&D spending (Figure URD-5), compared with 1.5% of all academic R&D spending in 2012. Overall, support from foreign sources (firms, universities, governments, nonprofits, and others) amounted to approximately 1.5% of academic R&D spending in 2021 (NCSES HERD 2021: Table 1 and Table 15).