2018 Digest

More than 80% of U.S. R&D performance comprises development and applied research, work that focuses on practical, specific objectives and on developing new or improved products and processes. About 17% of the U.S. R&D performance is basic research—work that primarily involves gaining knowledge of underlying phenomena without a particular application in mind.

Different institutions bring different perspectives and approaches to R&D. Academia, with its symbiotic relationship of advanced graduate education and R&D, performs the most basic research (49%). Business, with its focus on new and improved products, services, and processes, dominates both development (88%) and applied research (58%).

The federal budget environment affects the R&D performance of different sectors. Academic and other nonprofit institutions have generally received steady or increasing federal support, and they focus on basic science. However, since peaking around 2010 and 2011, federal support to these sectors has been on a generally downward trend. The business sector, while increasing overall performance, experienced a decline in federal support since the peak in 2009.

Defense has long been the largest federal R&D budget priority. Since the beginning of the 2010s, however, the defense share of the federal R&D budget has gradually declined. Nearly half of the federal nondefense R&D budget is devoted to health and funded primarily through the National Institutes of Health.

The Department of Defense focuses mostly on development, which includes new major systems and advanced technology. The other federal agencies with large R&D portfolios—the Departments of Health and Human Services, Energy, Commerce, and Agriculture, as well as the National Aeronautics and Space Administration and the National Science Foundation—focus primarily in the areas of basic and applied research. These six departments and agencies account for 95% of federal nondefense R&D spending.

Life sciences account for nearly one-half of the basic and applied federal research portfolio, while together engineering and physical sciences comprise nearly 30%.