Academic R&D

Funding Sources of Academic R&D

The federal government remains the main driver of academic R&D, funding 55% ($59.7 billion of the total $108.8 billion) of expenditures in 2023. Academic institutions’ own funds were the second-largest source of academic R&D at $27.7 billion (25% of total) (Figure DISC-10).^{​Institutional funds include institutionally financed research (all R&D funded by the institution from accounts that are only used for research, excluding institution research administration and support), cost sharing (committed), and unrecovered indirect costs (the portion of indirect costs associated with a sponsored project that was not reimbursed by the sponsor in accordance with the institution’s negotiated indirect cost rate). For further details, see https://ncses.nsf.gov/surveys/higher-education-research-development/2023#methodology.} Six agencies provided 93% of federal funds supporting academic R&D in FY 2023 (Table DISC-6). The U.S. Department of Health and Human Services (HHS), which includes the National Institutes of Health, was the largest source, providing 56% of federal agency support for academic R&D in FY 2023. The Department of Defense (DOD) and NSF combined accounted for over a quarter of federal support for academic R&D (at 15% and 11%, respectively).

Between 2013 and 2023, the share of academic R&D expenditures funded by the federal government dropped from 59% to 55%, while the share funded by academic institutions themselves increased from 22% to 25% (Figure DISC-10). This is partly due to the federal American Reinvestment and Recovery Act (ARRA) funds, which boosted federal funding of academic R&D to a peak in 2011; by 2015, all ARRA funds had been expended. Between 2013 and 2023, businesses and state and local governments each accounted for between 5% and 6% of expenditures, while all other sources combined—including nonprofit organizations, foreign governments, and other universities or gifts from individual donors directed to research funding—funded around 8%–10% of U.S. academic R&D.

Academic R&D by Type of R&D

The mission of academic institutions is typically different from other sectors, and this is reflected in the distribution of R&D performed. In contrast to the business sector, the majority of academic R&D expenditures in 2023 were devoted to basic research ($68.5 billion, or 63% of total R&D), followed by applied research ($29.6 billion, or 27%) and by experimental development ($10.6 billion, or 10%). This distribution has been largely stable since at least 2013, when the shares were 66%, 25%, and 9%, respectively (NCSES HERD 2023: Table 9).

Academic basic research is funded by all sectors. The federal government funded $38.1 billion ($31.2 billion in constant dollars) in academic basic research in 2023, a 10% increase from 2022 (6% increase in constant dollars) (Figure DISC-11; Table SDISC-1). Further, between 2018 and 2023, the CAGR for academic basic research funded by the federal government was 3% in constant dollars. Academic basic research funded by nonfederal sources increased from $27.1 billion in 2022 to $30.3 billion in 2023 (from $22.9 billion to $24.8 billion in constant dollars), a 12% increase (8% increase in constant dollars). From 2018 to 2023, the CAGR of academic basic research funded by nonfederal sources was 2% in constant dollars.

In 2023, federal funding for academic applied research reached $16.4 billion, and nonfederal funding for academic applied research reached $13.2 billion (Figure DISC-12; Table SDISC-1). Since 2018, federally funded applied research and experimental development at academic institutions grew at a CAGR of 3% and 7% in constant dollars, respectively. Nonfederal funding for academic applied research and experimental development grew at a CAGR of 2% and 1% in constant dollars, respectively, over the same period.

Academic R&D by S&E Field

Academic R&D expenditures are classified into three major categories: science (78% in FY 2023), engineering (16%), and non-S&E fields (6%) (the latter include business management and administration, communication and communications technologies, education, humanities, social work, law, and visual and performing arts) (Table SDISC-2). The distribution of academic R&D expenditures across research fields has changed little since 2013 (Figure DISC-13). The life sciences continue to account for a majority of total spending, $62.2 billion (57%) in 2023 (56%–58% share since 2013). The concentration of life sciences R&D in the higher education sector is consistent with the large share of health sciences in U.S. publications output discussed later in this report and with the large share of research space devoted to biological and biomedical sciences.^{​Many R&D activities require dedicated research space. In FY 2023, academic institutions reported allocating 240.2 million square feet of space to S&E research, up from 236.1 million in 2021 and 226.9 million in 2019 (Gibbons 2024b). The three S&E research components with the highest amount of S&E research space in 2023 are biological and medical sciences (61.2 million square feet), medical school spaces (52.2 million square feet), and engineering (42 million square feet) (NCSES Facilities 2023: Table 1).}

The proportion of funding for academic R&D by federal and nonfederal sources differs by scientific field (Figure DISC-14). The social sciences receive a relatively high proportion of funding from nonfederal sources (67% nonfederal in 2023). By comparison, geosciences, atmospheric sciences, and ocean sciences (67% federal), computer and information sciences (67% federal), and physical sciences (67% federal) were among the highest federally funded fields as a proportion of total funding in 2023.

The funding portfolios for federal agencies reflects the variety of S&E fields that support their diverse missions (Figure DISC-15). For example, among federal agencies, HHS funds most academic R&D in life sciences, psychology, and social sciences, whereas DOD was one of the top two agencies funding computer and information sciences, engineering, and mathematics and statistics R&D. NSF was the leading funder among all federal agencies for academic R&D in mathematics and statistics; geosciences, atmospheric sciences, and ocean sciences; and physical sciences.