U.S. R&D is performed and funded by businesses, governments, higher education, and nonprofit organizations. R&D performance refers to who conducts R&D, whether it is funded from internal funds or external financial sources (e.g., contracts, grants). From the perspective of R&D funding, funds may be devoted to own R&D or to pay for R&D in other sectors or organizations (private R&D services suppliers, academic or nonprofit grantees) (OECD 2015:126). Academic R&D is covered only briefly in this report given that the Indicators 2024 report “Academic Research and Development” provides comprehensive information for this sector.

In 2022, the United States performed an estimated $885.6 billion in R&D in current (nominal) U.S. dollars (Figure RD-1, Figure RD-2; Table RD-1), based on National Patterns statistics (Anderson 2024; NCSES 2024).^{​For further background see Anderson, Jankowski, and Boroush (2023) and https://ncses.nsf.gov/data-collections/national-patterns/2021-2022#methodology.} This is an increase of 12% from 2021 but only of 5% in constant (inflation-adjusted) 2017 U.S. dollars.^{​For longer-term U.S. R&D trends, see Anderson, Jankowski, and Boroush (2023) and Anderson (2024). All comparative statements in this report have undergone statistical testing and are significant at the 90% confidence level except statements reliant on modeled estimates.}

U.S. R&D performance has been on a long-term growth trajectory since the post–World War II era, with a compound annual growth rate (CAGR) of 4% since 1953 in constant dollars (NCSES 2024, Table 1). The top three U.S. R&D-performing sectors are business, higher education, and the federal government (Figure RD-3), with business being the largest-performing sector by far, with a 78% share in 2022. The higher education sector has been the second-largest performer since 2002, remaining slightly ahead of the federal government sector since then. On the other hand, the federal government and business sectors have funded a combined share of over 90% of U.S. R&D since the 1950s, trading first and second place in 1980 when the business sector surpassed the federal government as the largest funder (Figure RD-4).

The ratio of R&D expenditures to gross domestic product (GDP) is an intensity measure at the national level used for analysis and policymaking. For the United States, this measure has been above 3.0% since 2019 and was 3.4% in 2022, based on National Patterns statistics (Figure RD-5) (NCSES 2024, Table 1). Based on R&D funding measures, the ratio follows the pattern of relative shares of business versus federal sources (Figure RD-4), with the business R&D-to-GDP ratio being higher than the federal R&D-to-GDP ratio for the last few decades. The federal R&D-to-GDP ratio has declined since the last peak in 2009, associated with funds from the American Recovery and Reinvestment Act (ARRA).

This section briefly describes U.S. R&D performance for all major sectors: business, higher education, federal and state government, and nonprofit. Later sections in this thematic report discuss additional details for business and the federal government.

The business sector is by far the largest performer of U.S. R&D. In 2022, this sector performed $692.7 billion in domestic R&D (current U.S. dollars), compared with $608.6 billion in 2021 for a 14% increase (6% in constant dollars) (Figure RD-3, Figure RD-4, Figure RD-6; Table RD-1, Table RD-2).^{​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 statistics 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 1–5 employees, and for 2017–18, 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 microbusiness R&D being included.} From 2010 to 2022, business R&D grew at an annual CAGR of 5% in constant dollars, the highest rate across all sectors. This growth was driven by several R&D-intensive industries, as discussed later in this thematic report.

The second-largest performer sector was higher education, with $91.4 billion (or a 10% share) in 2022. This represented a 7% change from 2021 in current dollars but stagnated (-0.4% change) in constant dollars. Since 2010, the CAGR was 1.5% in constant dollars.^{​The National Patterns statistics 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. Accordingly, the higher education statistics included in this report differ from those cited in the Indicators 2024 report “Academic Research and Development.” For further details, see https://ncses.nsf.gov/data-collections/national-patterns/2021-2022#methodology.}

In 2022, the federal government performed $73.3 billion, or an 8% share of U.S. R&D, compared with $66.8 billion in 2021 for a 10% increase (3% in constant dollars) (Table RD-1, Table RD-2). The 2022 number included $47.0 billion in intramural R&D and $26.4 billion performed by federally funded R&D centers (FFRDCs).^{​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 available at https://www.nsf.gov/statistics/ffrdclist/.} Nonfederal government R&D performance in 2022 was estimated to be $697 million, averaging $655 million from 2010 to 2022 in constant dollars. In 2022, it represented about 0.1% of the U.S. total (Table RD-1, Table RD-2).

Nonprofit organizations (excluding higher education institutions, the federal government, and nonfederal governments) performed $27.3 billion of R&D in 2022 ($23.2 billion in constant dollars) (Table RD-1, Table RD-2). Since 2010, the share of the sector has been between 3% and 4%.

The business sector is the largest R&D funder in the United States. In 2022, the sector funded $672.9 billion ($570.4 billion in constant 2017 dollars), or 76% of total U.S. R&D (Table RD-2). Virtually all (99%) of the 2022 business R&D funding supported business R&D.^{​Business funding refers to funding for domestic R&D performed by the business sector, higher education institutions, nonprofit organizations, and FFRDCs. U.S. R&D funded and performed by the business sector (by far the largest component as noted above) comprises own company funds of domestic R&D-performing businesses, funds from other domestic businesses, and funds from foreign businesses.}

The federal government funded another 18% ($159.8 billion, or $135.5 billion in constant dollars) in 2022 as the second-largest source of funding for U.S. R&D (Figure RD-4; Table RD-1). The largest recipient sectors of federal R&D funding in 2022 were higher education (30%), intramural federal R&D (29%), businesses (17%), and FFRDCs (16%) (NCSES 2024, Table 6). The remaining sectors funded another 6%: higher education (3%), nonprofit organizations (2%), and state and other local or nonfederal government (1%) (Figure RD-4; Table RD-1, Table RD-2).

Most R&D performed in the United States is devoted to experimental development (hereafter, development), reflecting the large role of for-profit businesses in funding and performance. In 2022, development activities accounted for $596.2 billion in current dollars, or 67% of the $885.6 billion in total U.S. R&D performance. This was followed by applied research (18%) and basic research (15%). These relative shares have been stable for many years (Table RD-3). The higher education sector performs the largest share of basic research ($57.8 billion of $129.4 billion, or 45%), whereas the business sector performs 63% of applied research ($100.3 billion of $159.9 billion) and 92% of experimental development ($546.1 billion of $596.2 billion) (Table RD-2).

U.S. businesses funded 88% of development expenditures in 2022, compared with 76% of overall U.S. R&D (Figure RD-7). Businesses also funded the largest share of applied research (62%). The federal government funded the largest proportion of total U.S. basic research (40%), followed by the business sector (37%) and the higher education sector (12%) (Table RD-2). For basic research performed by the higher education sector, 53% was funded by the federal government. For more information on long-term trends by type of R&D and on the higher education sector, see, respectively, Anderson (2024) and the Indicators 2024 report “Academic Research and Development.”^{​Although key data features are noteworthy, care is needed in definitively identifying trends by type of R&D. Various methodological improvements in NCSES R&D performer surveys—but no material revisions in the type-of-R&D definitions (OECD 2015)—have been made over time, particularly before 2010, with the net implication that small percentage changes in the reported shares may not be meaningful.}