National Patterns of R&D Resources: 2016–17 Data Update

National Patterns of R&D Resources provides current data on the levels and key trends of the performance and funding of research and experimental development in the United States, with comparisons to the historical record (back to 1953). Detail is also provided for the U.S. total and by performer according to the types of R&D conducted (i.e., basic research, applied research, and experimental development).

Report frequency. Reports in this series are typically published annually.

Current reference period. Data from 1953 to 2017 are provided for almost all variables. The data for 2017 are estimates and not previously reported in this series. The data for 2016 are revised from the previous edition (2015–16) of this series. The data for 1953–2015 reflect final data but may still include some further (typically minor) revisions.

The National Patterns statistics draw primarily from NCSES’s annual national surveys of the R&D expenditures and funding of the organizations that perform the bulk of U.S. R&D. These organizations include the business sector, federal and nonfederal government, higher education, and other nonprofit organizations. Each of these sectors are summarized—including links to other sections of the NCSES website with specifics on survey coverage, variables collected, and survey or sampling implementation—in the sections below.

For 2008 and later years, annual data on the R&D performed in the domestic United States by the business sector come from NCSES’s Business Research and Development and Innovation Survey (BRDIS; cosponsored with the U.S. Census Bureau [https://www.nsf.gov/statistics/srvyindustry/]). BRDIS is a sample survey of companies in manufacturing and nonmanufacturing industries, designed to be nationally representative of all for-profit companies (publicly or privately held) with five or more employees in the United States (typically, a sample of around 44,000 companies representing a national population of around 2 million companies). Key variables covered include R&D performance (in the United States and worldwide); total and R&D employment (in the United States and worldwide); sources of R&D funding; the type of R&D activities (basic research, applied research, development); type of R&D costs; R&D capital expenditures; R&D application and technology focus areas; geographic location (within the United States and in foreign countries); sales (in the United States and worldwide); patenting, licensing, other technology transfer activities; and innovation indicators. (Note: data on business intramural R&D capital reported by BRDIS are not included as a component in the National Patterns total of business intramural R&D.) As a sample survey, data estimates from BRDIS have sampling error.

For 2007 and earlier years, data come from the NCSES Survey of Industrial Research and Development (SIRD), the predecessor to BRDIS (https://www.nsf.gov/statistics/srvyindustry/sird.cfm). SIRD was also a sample survey, conducted annually (1953–2007), that provided national estimates of the R&D performed within the United States by industrial firms, whether U.S. or foreign owned. The SIRD target population consisted (same as BRDIS) of all for-profit companies with five or more employees, manufacturing and nonmanufacturing, that performed R&D in the United States.

Federal intramural R&D. Data on the intramural R&D performed by the federal government come from NCSES’s Survey of Federal Funds for Research and Development (Federal Funds Survey), which is completed annually by all federal agencies conducting R&D programs (approximately 28 federal departments or independent agencies; https://www.nsf.gov/statistics/srvyfedfunds/). The Federal Funds Survey data provide intramural R&D totals as outlays and obligations on a federal fiscal year basis. The obligations data are further detailed by federal agency, performer, type of R&D, geographical area, and field of science or engineering (for research, not for development). (Note: data on federal intramural R&D plant reported by the Federal Funds Survey are not included as a component in the National Patterns total of federal intramural R&D.)

Federally funded R&D centers (FFRDCs). The nation’s FFRDCs are a second venue of federal R&D performance. (Currently, there are 41 FFRDCs, although the number can change from year to year; NCSES maintains a Master Government List of the population of FFRDCs, which it regularly updates [https://www.nsf.gov/statistics/ffrdclist/].) FFRDCs are R&D-performing organizations administered by an industrial firm, a university, a nonprofit institution, or a consortium but that have funding exclusively or substantially from the federal government. An FFRDC is operated to provide R&D capability to serve an agency’s mission objectives or, in some cases, to provide major facilities at universities for research and training purposes. Since FY 2001, NCSES’s FFRDC Research and Development Survey (known previously as the Survey of Research and Development Expenditures at FFRDCs) has provided annual data (by federal fiscal year) on the R&D expenditures (with additional detail) of all the nation’s FFRDCs (https://www.nsf.gov/statistics/srvyffrdc/). Prior to FY 2001, R&D expenditure data for the FFRDCs were collected as part of the major performer surveys: the Survey of R&D Expenditures at Universities and Colleges (for university-administered FFRDCs), the Survey of Industrial R&D (for industry-administered FFRDCs), and the Federal Funds Survey (for nonprofit-administered FFRDCs).

The category of nonfederal government R&D performance included in National Patterns is the intramural R&D of state governments (i.e., the R&D performance of state agency and department employees and the services performed by others in support of internal R&D projects). Data on this state intramural R&D come from NCSES’s Survey of State Government Research and Development (https://www.nsf.gov/statistics/srvystaterd/). This state survey is a comparatively recent NCSES initiative, with the first data year in FY 2006.

In addition, the BRDIS, FFRDC, and Higher Education Research and Development (HERD) Survey surveys (see above and below) provide detail on R&D funding by nonfederal governments other than state government.

For academic FY 2010 and onward, data on the R&D performed in higher education come from NCSES’s HERD Survey. HERD is an annual census of universities and colleges that grant the bachelor’s degree or higher and expend at least $150,000 in separately accounted for R&D over the fiscal year of these academic institutions (https://www.nsf.gov/statistics/srvyherd/). The survey collects information on R&D expenditures by field of research, source of funds, type of R&D, and head counts of R&D personnel.

The HERD Survey replaced the earlier Survey of Research and Development Expenditures at Universities and Colleges (https://www.nsf.gov/statistics/srvyrdexpenditures/). For data years FY 2009 and earlier, the Universities and Colleges Survey provides the data on academic R&D.

This sector refers to R&D performed in the United States by nonprofit organizations other than government or academia. Data on the R&D performed by such nonprofit organizations that are federally funded comes from the aforementioned NCSES Federal Funds Survey (reported annually, on a federal fiscal year basis). Data for the R&D performed by other nonprofit organizations with funding from within the nonprofit sector and from business sources (both reported on a calendar year basis) are estimated, based on parameters from NCSES’s past comprehensive R&D surveys of the sector. NCSES’s most recent Survey of Research and Development Funding and Performance by Nonprofit Organizations dates to 1973 and 1996–97 (https://www.nsf.gov/statistics/srvyrdnonprofit/). Data for years prior to 1973 come from earlier National Patterns reports (which reflect, in part, surveys in 1957 and 1960).

Some of the trend analyses in National Patterns draw on National Income and Product Accounts data (e.g., U.S. gross domestic product [GDP], state domestic product) assembled by the U.S. Bureau of Economic Activity (BEA). For details on this U.S. economic data, see http://www.bea.gov/national/index.htm#gdp.

In keeping with international conventions, U.S. R&D expenditures in current dollars are adjusted for inflation based on BEA’s implicit GDP price deflator.

The National Patterns statistical picture of the U.S. R&D system arises from integration of the primary data from the NCSES sectoral R&D surveys. Adjustments to the primary data are needed in some cases to enable consistent addition. Furthermore, preliminary or otherwise estimated values may be used (and later revised) where final data from one or more of the surveys are not yet available but can reasonably be calculated.

Key features of the methodology include the following.

• Data from BRDIS are reported on a calendar year basis and are incorporated directly in the National Patterns totals. Data from the Federal Funds Survey and the FFRDC Research and Development Survey are reported on a federal fiscal year basis (1 October–30 September the next year) and are adjusted to the calendar year for National Patterns integration. The data from the HERD Survey are reported on an academic fiscal year basis (typically, 1 July–30 June the next year) and converted to calendar year. Data from the Survey of State Government R&D are reported according to each state’s fiscal year and also are converted to calendar year (presuming that 1 July–30 June the next year is typical).
• The method for estimating the type of R&D (i.e., basic research, applied research, experimental development) in the business sector was revised for 1998 and later years. This change resulted in a net decrease in the proportion of business R&D classified as basic research. Accordingly, the data for 1998 and later years are not directly comparable with data for 1997 and earlier years. The transition to BRDIS (data series starting in 2008) does not appear to have introduced further discontinuities in the type-of-R&D estimates. For universities and colleges, the type-of-R&D estimation method was revised in 1998 and again in 2010. Hence, the latest data for higher education are also not directly comparable to those reported in earlier years.
• The data for higher education in 2003 and later years include both science and engineering (S&E) and non-S&E fields. Prior to 2003, only S&E fields are included. Non-S&E R&D was $1.4 billion in FY 2003 and $4.2 billion in FY 2016. Similarly, for the business sector, social science R&D was not included until the 2008 data year, when it was $0.8 billion of the $290.7 billion business R&D total.
• Higher education institutions reporting R&D expenditures of less than $1 million were not included in the National Patterns totals for FYs 2010 and 2011. For FY 2012 and forward, the methodology was revised to include this increment. The R&D expenditures of these institutions totaled $143 million in FY 2012 and have ranged from $130 million to $150 million in subsequent years.
• The data for higher education R&D have included, since 1998, a net-out adjustment for R&D funds reported by academic institutions as passed through to other academic subrecipients. This adjustment was recently expanded (back to 1998) to also include pass-throughs to all noneducational recipients (i.e., businesses, nonprofit organizations, and others). The effect of this expanded adjustment is that the annual totals of higher education R&D performance are about $0.4 billion lower in 1998, the first year for this adjustment, to about $2.5 billion lower annually in 2012 through 2015 than previously have been reported in National Patterns. In addition, for the 2010 to 2017 survey years, this more comprehensive pass-through funding adjustment has been further improved by tabulating the adjustments on an institution-by-institution basis, which allows for a more precise estimate of the original nonfederal sources of pass-through funds and better estimation of the type of R&D (basic, applied, or experimental development) being passed through to other R&D performers.
• Data on federally funded R&D discussed in this report were derived from surveys of organizations that perform R&D, such as companies, universities, and FFRDCs. These amounts can differ substantially from the R&D that federal agencies have reported funding. For example, in 2009, federal agencies reported obligating $141 billion for R&D funding to all R&D performers (including $53 billion to the business sector), compared with an estimated $127 billion in federal funding reported by all performers of R&D that year ($40 billion by businesses). And, in 2015, federal agencies reported obligating $129 billion for R&D funding to all R&D performers (including $48 billion to the business sector), compared with an estimated $113 billion in federal funding reported by all performers of R&D that year ($20 billion by businesses).
• With this new edition of National Patterns, the data on federal intramural R&D explicitly exclude expenditures for preproduction development. (Preproduction development is nonexperimental work on a product or system before it goes into full production, e.g., activities and programs that are categorized as “Operational Systems Development” in the Department of Defense’s Research, Development, Test and Evaluation budget activity structure.) This change aligns the federal intramural data with a recent change introduced in the definition of R&D by the U.S. Office of Management and Budget. In FYs 2016 and 2017, preproduction development for federal intramural R&D totaled about $5.5 billion each year.

Additional details on methodology and technical issues pertaining to specific variables are provided in the notes on each table. For further information about compiling the National Patterns statistics, contact the Project Officer.

R&D performers and funders. The U.S. R&D system consists of the R&D activities of differing performers and sources of funding for these activities. The main categories of R&D performers tracked by NCSES are businesses; federal agencies; FFRDCs (administered by businesses, universities, or nonprofit organizations); nonfederal government agencies (specifically those of the states); higher education; and other nonprofit organizations. For R&D funding, the main categories are businesses; the federal government; nonfederal government (state, regional, local); higher education; and other nonprofit organizations. Organizations that perform R&D often receive significant levels of outside funding; R&D funders may also be significant performers.

Type of R&D. As defined by the Organisation for Economic Co-operation and Development’s Frascati Manual (in seven editions since the early 1960s), “R&D” spans three main types of activities:

Basic research: Experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts, without any particular application or use in view.

Applied research: Original investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific, practical aim or objective.

Experimental development: Systematic work, drawing on knowledge gained from research and practical experience and producing additional knowledge, which is directed to producing new products or processes or to improve existing products or processes.^{​Organisation for Economic Co-operation and Development (OECD). 2015. Frascati Manual 2015: Guidelines for Collecting and Reporting Data on Research and Experimental Development. Page 45. OECD Publishing, Paris. Available at http://www.oecd.org/publications/frascati-manual-2015-9789264239012-en.htm.}