Trends in U.S. R&D Performance and Funding

U.S. Total R&D and R&D Intensity

Recent growth in overall U.S. R&D performance is consistent with historical growth rates and is driven by the rapid growth of R&D performed by the business sector. The United States performed $891.8 billion in 2022 and an estimated $939.6 billion in 2023 in current U.S. dollars (Figure DISC-1, Figure DISC-2; Table DISC-1) (NCSES 2025d).^{​Estimated 2023 national R&D performance is based in part on 2023 projected R&D reported on the 2022 Business Enterprise Research and Development (BERD) Survey, preliminary information from the 2023 BERD Survey, and trends for business R&D performance. Every survey year, some of the variation in BERD estimates is due to changes in individual respondent reporting practices. For details, see NCSES (2024a).} This is an increase of 5% from 2022 (2% in constant [inflation-adjusted] 2017 U.S. dollars).^{​For longer-term U.S. R&D trends, see Anderson, Jankowski, and Boroush (2023) and NCSES (2025d). All comparative statements in this report have undergone statistical testing and are significant at the 90% confidence level, except for statements reliant on modeled estimates.} Since 1953, U.S. R&D performance has increased annually at a 3% compound annual growth rate (CAGR) in constant dollars (NCSES 2025d: Table 1). For the past three decades, the CAGR for total U.S. R&D expenditures has fluctuated between 2% and 5%, driven largely by business sector performance (Figure DISC-3). From 2013 to 2023, business R&D performance grew at an annual CAGR of 6% in constant dollars, the highest sectoral growth rate over this period.

National R&D intensity is the ratio of R&D expenditures to GDP. These intensities allow comparison across time, economies, and sectors. Since 2019, U.S. R&D intensity has been above 3.0%, reaching 3.4% in 2022 and 2023, based on National Patterns statistics (Figure DISC-4) (NCSES 2025d: Table 1).

R&D-Performing Sectors

The business sector is by far the largest U.S. R&D-performing sector, accounting for 78% of U.S. R&D performance in 2023, followed by the higher education sector (11%) and the federal government (8%) (Figure DISC-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 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; 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 from $4 billion to $5 billion higher for 2016 and beyond as a result of microbusiness R&D being included.} The nonprofit sector and the nonfederal government sector (e.g., state and local governments) accounted for 3% and less than 1%, respectively.

The business sector performed an estimated $735.0 billion in domestic R&D in 2023 (current U.S. dollars), up from $697.3 billion in 2022 for a 5% increase in current dollars and a 2% increase in constant dollars (Figure DISC-3; Table DISC-1).^{​The National Patterns statistics for higher education R&D appearing in this section adjust the academic fiscal year basis of NCSES’s Higher Education Research and Development (HERD) 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 section differ from those based on fiscal year from the HERD Survey discussed further below. For further details, see https://ncses.nsf.gov/data-collections/national-patterns/2021-2022#methodology.} This represented a 3% increase over 2022 in current dollars for the federal sector but a 1% decline in constant dollars (Table DISC-1). Since 2020, annual percent changes of federal R&D performance in constant dollars have been negative or below 1% (Figure DISC-3). Nonfederal government R&D performance in 2023 was estimated to be $741.6 million in current dollars, or about 0.1% of the U.S. total. Nonprofit organizations (excluding higher education institutions, the federal government, and nonfederal governments) performed $28.2 billion of R&D in 2023, or 3% of the total (Table DISC-1).

Sources of Funding and Type of R&D

Businesses funded 75% of U.S. total R&D performed across all sectors in 2023, compared with 18% funded by the federal government. For basic research performed across all sectors, the federal government funded 41%, followed by 35% funded by businesses (Figure DISC-6). Historically, the business sector and the federal government are the largest funders of U.S. total R&D performance, with a combined funding share of over 90% since the 1950s. Since 1980, the business sector has accounted for the largest share of funding for R&D performance (Figure DISC-7). In the 70-year span from 1953 to 2023, business R&D funding grew at a 5% CAGR in constant 2017 dollars, compared with a 3% CAGR for federal government funding during the same period (NCSES 2025d: Table 6). Decadal growth rates of business R&D funding have exceeded federal R&D funding growth rates by at least 2% in CAGR constant dollar terms (NCSES 2025d: Table 1), except during the late 1950s and 1960s—with this period’s anomalous government spending due in part to large increases in federal funding for space R&D (NCSES 2025a; NSB 2020b). Figure DISC-8 presents long- and short-term growth rates by funding source. Business funding grew by 11% between 2018 and 2019 in constant dollars and has grown annually in the single digits since then. Federal R&D funding grew 8% between 2019 and 2020 in constant dollars, associated with COVID-19-related appropriations (Pece 2023, 2024); this was followed by a 5% decline in constant dollars in 2021. Overall, federal R&D funding growth rates averaged 1% annually in CAGR constant dollar terms over the 2013–23 period.

In 2023, the business sector funded an estimated $709.2 billion, accounting for 75% of total U.S. R&D (Figure DISC-2) (NCSES 2025d: Table 6). Virtually all (99%) business R&D funding supported business R&D performance.^{​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.} At the same time, however, government funding for R&D performed by academic institutions and federal laboratories also benefits corporate R&D in industries related to life sciences (Arora et al. 2023; CBO 2021; Furman et al. 2005; Toole 2012). The federal government was the second-largest source of funding for U.S. R&D, while other nonbusiness sectors accounted for smaller percentages. The federal government funded $172.3 billion (18% of U.S. R&D) in 2023. The largest recipients were the higher education sector (31%), intramural federal R&D (26%), businesses (20%), and federally funded R&D centers (FFRDCs) (17%) (NCSES 2025d: Table 6).^{​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, which is available at https://www.nsf.gov/statistics/ffrdclist/.} The remaining sectors funded a total of 6% of U.S. total R&D: higher education (3%), nonprofits (2%), and state and other local or nonfederal governments (less than 1%).

Continuing a long-running trend, about two-thirds (67%) of U.S. R&D performance in 2022 was for experimental development (Table DISC-2). The large share of experimental development in total U.S. R&D performance is consistent with the role of the private business sector as the largest performer (and funder) of R&D, given its focus on R&D on closer-to-market applications. Basic research and applied research accounted for 15% and 18% of total U.S. R&D, respectively (Table DISC-2). The higher education sector performed about half ($59.6 billion, or 46%) of the $130 billion in basic research, followed by a third performed by the business sector ($43.4 billion, or 33%). Further, of the $59.6 billion in basic research performed by the higher education sector in 2022, the federal government funded 53%, and higher education itself funded another 28% of total U.S. basic research performance; see National Patterns data in (NCSES 2025d: Table 3).

Between 1953, the first year for which U.S. R&D expenditures are available, and 2012, the federal government funded the majority of basic research (performed across all sectors) in the United States. Since 2013, the share of basic research funded by the federal government has remained below 50%, largely due to increases in business sector funding over the last decade. Between 2012 and 2023, the share of basic research funded by the business sector grew from 21% to an estimated 35%, while the federal government’s share of funding decreased from 52% to 41%. This decrease in the federal government’s basic research funding share has occurred despite a constant dollar increase in funding expenditures between those years (NCSES 2025d: Table 7).