Higher Education R&D Expenditures Increased 11.2%, Exceeded $108 Billion in FY 2023

Federally funded R&D at universities totaled almost $60 billion in FY 2023, which accounted for 55% of total expenditures (table 2). The Department of Health and Human Services (HHS), which includes the National Institutes of Health, supported the largest federal share of R&D. It funded $33.1 billion of FY 2023 higher education R&D expenditures, an increase of $2.8 billion over the previous year. HHS’s funding amounted to 56% of total federally supported R&D and 30% of total R&D at higher education institutions. The Department of Defense (DOD) ($9.0 billion) and the National Science Foundation ($6.7 billion) accounted for most of the remaining federally funded R&D expenditures, while three other agencies supported between $1.7 billion and $2.7 billion of university R&D in FY 2023: the Department of Energy (DOE) ($2.7 billion), the National Aeronautics and Space Administration (NASA) ($2.3 billion), and the Department of Agriculture (USDA) ($1.7 billion). All other federal agencies combined supported $4.1 billion of higher education R&D in FY 2023.

Universities’ own funding ($27.7 billion) accounted for 25% of total R&D in FY 2023, which is similar to the percentages reported since 2016 (table 1). Nonprofit organizations ($6.7 billion) and businesses ($6.2 billion) each supported around 6% of total R&D. State and local governments funded 5.0% or $5.4 billion, while all other sources funded 2.8% ($3.1 billion) of higher education R&D.

R&D expenditures increased by at least 9.2% for each of the funding sources from FY 2022 to FY 2023. Expenditures funded by the federal government and state and local governments increased similarly, with federal up 10.4% ($5.6 billion) and state and local up 10.8% ($529 million). Universities’ own funds supported 12.9% ($3.2 billion) more in R&D costs in FY 2023, while nonprofit-funded R&D increased by 11.8% ($706 million). R&D funded by businesses was up 9.2% in FY 2023 ($523 million). R&D funded by all other sources, which include funds from foreign governments, foreign or U.S. universities, and gifts designated by the donors for research, increased by 17.4% ($459 million) in FY 2023 after remaining flat or declining each year from FY 2020 to FY 2022.

In FY 2023, R&D expenditures in science fields increased by 10.7% ($8.2 billion), reaching $84.3 billion, and engineering fields increased by 11.5% ($1.8 billion), reaching $17.5 billion (table 3). R&D expenditures in non-science and engineering (non-S&E) fields ($6.9 billion total) increased by 17.8% ($1.0 billion). R&D expenditures in two life sciences subfields, health sciences ($35.7 billion total, $3.9 billion increase) and biological and biomedical sciences ($19.5 billion total, $1.4 billion increase), showed the largest dollar increases, accounting for 48% of the total university R&D growth in FY 2023. Combined, these two fields also accounted for 51% of total higher education R&D.

While the federal government funded 55% of all FY 2023 R&D expenditures, federally funded expenditures in several fields accounted for more than 70% of their respective national totals: atmospheric science and meteorology (81%); aerospace, aeronautical, and astronautical engineering (75%); electrical, electronic, and communications engineering (73%); and physics (72%). State and local governments funded about 15% or more of R&D expenditures in four fields: agricultural sciences (25%), civil engineering (17%), natural resources and conservation (15%), and social work (15%). The fields with the highest shares of institutionally funded R&D were anthropology (57%) and the non-S&E fields as a whole (52%). Within the non-S&E fields, only two were supported by less than 50% of institutional funds: education (31%) and social work (26%). Nonprofit organizations and businesses provided similar levels of R&D support in FY 2023 at 6.1% and 5.7%, respectively. However, nonprofits funded at least 19% of R&D in two fields: political science and government (22%) and law (19%), while businesses funded 11.0% or more of R&D in three fields: aerospace, aeronautical, and astronautical engineering (12.2%); engineering, not elsewhere classified (11.5%); and physical sciences, not elsewhere classified (11.0%).^{​Engineering fields, not elsewhere classified could include agricultural engineering, engineering design, engineering mechanics, engineering physics, engineering science, forest engineering, nanotechnology, naval architecture and marine engineering, nuclear engineering, ocean engineering, petroleum engineering, and other engineering fields that cannot be classified using the fields provided on the HERD questionnaire. Physical science fields, not elsewhere classified includes other physical science fields that cannot be classified using the fields provided on the HERD questionnaire.}

Of the more than $108 billion in total FY 2023 R&D expenditures, higher education institutions identified $84.2 billion in direct costs and $24.5 billion in indirect costs (figure 2). Salaries, wages, and fringe benefits paid to R&D personnel ($47.1 billion) accounted for the largest portion of direct costs. Institutions also passed R&D funding totaling $9.5 billion to other universities ($5.2 billion) or other organizations excluding contractors or other vendors ($4.3 billion) as part of their FY 2023 direct costs.^{​For more details on R&D expenditures passed through to subrecipients, see tables 4, 74–77, and 86 in the survey’s FY 2023 detailed data tables.} Software purchases and movable equipment exceeding institutional capitalization thresholds accounted for another $3.5 billion, combined. Other direct costs, including (but not limited to) travel, tuition, waivers, computer usage fees, supplies, and services (such as consulting) amounted to over $24.1 billion. Among indirect costs, $17.7 billion of facilities and administrative costs were reimbursed from external R&D sponsors. Another $6.8 billion was identified as unrecovered indirect costs.^{​For more information on the definitions and collection of these fields, see the HERD questionnaire and technical notes at https://ncses.nsf.gov/surveys/higher-education-research-development/2023#methodology.,​Unrecovered indirect cost means the difference between the amount charged to a federal award and the amount that could have been charged to a federal award under a nonfederal entity's approved negotiated indirect cost rate.}

The top 30 institutions in terms of R&D expenditures accounted for 42% of the total spent on R&D within the higher education sector in FY 2023, which is consistent with the preceding years (table 4). Thirty-three institutions reported at least $1 billion in R&D expenditures in FY 2023, compared with 29 institutions in FY 2022 and 24 in FY 2021.^{​For more details on institutions ranked by total R&D expenditures, see tables 5, 7, and 21–23 in the survey’s FY 2023 detailed data tables.} Sixteen of the top 30 institutions were public, accounting for $24.4 billion in total R&D expenditures; 14 were private, accounting for $21.6 billion.^{​For more details on institutional control of colleges and universities, see tables 68, 70, and 71 in the survey’s FY 2023 detailed data tables.} Almost all of the institutions (28 of the 30) had medical schools.^{​For more details on R&D expenditures at institutions with medical schools, see table 72 in the survey’s FY 2023 detailed data tables.} Emory University moved onto the list of 30 universities with the highest R&D totals in FY 2023, replacing the Massachusetts Institute of Technology at number 30. No institutions changed more than 3 positions.

The higher education R&D expenditures data were collected from a census of 914 universities and colleges that grant a bachelor’s degree or higher and expended at least $150,000 in R&D in FY 2022. To reduce respondent burden, the HERD Survey requests abbreviated data (short form) from institutions reporting less than $1 million in R&D expenditures during the previous fiscal year. Except for the totals reported in table 1 and figure 1, all other totals shown in this report exclude expenditures from the 250 institutions that completed the short-form version of the survey. The institutions completing the short-form survey accounted for $160 million (0.15%) of total higher education R&D expenditures in FY 2023.

The fiscal year referred to throughout this report is the academic fiscal year. For most academic institutions, FY 2023 represents 1 July 2022 through 30 June 2023.

The amounts reported include all funds expended for activities specifically organized to produce research outcomes and either sponsored by an outside organization or separately accounted-for using institution funds. R&D expenditures at university-administered federally funded research and development centers (FFRDCs) are collected in a separate NCSES survey, the FFRDC Research and Development Survey.

The full set of data tables and technical information from this survey are available at https://ncses.nsf.gov/surveys/higher-education-research-development/2023.

NCSES has reviewed this product for unauthorized disclosure of confidential information and approved its release (NCSES-DRN24-058).

Gibbons, MT; National Center for Science and Engineering Statistics (NCSES). 2024. Higher Education R&D Expenditures Increased 11.2%, Exceeded $108 Billion in FY 2023. NSF 25-313. Alexandria, VA: U.S. National Science Foundation. Available at https://ncses.nsf.gov/pubs/nsf25313.

Michael T. Gibbons
Survey Manager
NCSES
Tel: (703) 292-4590
E-mail: mgibbons@nsf.gov

National Center for Science and Engineering Statistics
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