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U.S. Industry Sustains R&D Expenditures During 2001 Despite Decline in Performers' Aggregate Sales
The National Science Foundation's (NSF's) annual Survey of Industrial Research and Development shows that companies spent $198.5 billion on research and development (R&D) that they performed in the United States during 2001. Company funding of R&D for 2001 was $181.6 billion, about the same level as it was for 2000 ($180.4 billion). Federal funding of industrial R&D reported by performers was $16.9 billion in 2001. It should be noted that the 2001 estimates are not directly comparable with 2000 estimates because data for industry-administered Federally Funded Research and Development Centers (FFRDCs) were not collected in the 2001 survey. Statistics from the 2000 and 2001 surveys are summarized in table 1. Information about items recently added to the survey is provided below.Table 1 Source Data: Excel file
R&D Funds by Sector
Manufacturing industries performed $109.2 billion, or 60 percent, of the total company-funded industrial R&D in the United States during 2001. The amounts of company-funded R&D reported by top R&D-performing manufacturing industries were
Manufacturing industries performed $11.5 billion, or 68 percent, of total Federally funded industrial R&D in the United States during 2001. The amounts of Federally funded R&D reported by selected manufacturing industries were
Companies classified in the nonmanufacturing industries performed $72.4 billion, or 40 percent, of company-funded industrial R&D in the United States during 2001. The amounts of company-funded R&D reported by top R&D-performing nonmanufacturing industries were
Companies classified in the nonmanufacturing industries performed $5.4 billion, or 32 percent, of Federally funded industrial R&D in the United States during 2001. The amounts of Federally funded R&D reported by selected R&D-performing nonmanufacturing industries were
Sales and Employment of R&D-Performing Industries
Domestic net sales of companies that performed R&D in the United States was $4.8 trillion in 2001 (see table 1 for definition of terms). Manufacturers' sales were $3.0 trillion in 2001, and companies in nonmanufacturing industries reported sales of about $1.8 trillion. The R&D-to-sales ratio was 4.0 percent for manufacturers and 4.3 percent for companies in nonmanufacturing industries. For all industries, the ratio was 4.1 percent for 2001, the highest ratio achieved since 1953, the first year for which statistics were prepared. However, the increase in the ratio resulted primarily from industries' declining sales, since R&D expenditures remained relatively flat.
Domestic employment by companies that performed R&D in the United States was 16.7 million in 2001. The number of people who were employed by R&D-performing manufacturing companies was 9.9 million in 2001, and companies that performed R&D in nonmanufacturing industries reported employment of 6.8 million. The number of full-time equivalent (FTE) scientists and engineers who performed industrial R&D was about 1 million. Manufacturers employed 0.6 million FTE R&D scientists and engineers, and companies in nonmanufacturing industries employed 0.4 million.
R&D Outsourcing and Technology
In NSF's continuing effort to improve and maintain the relevance of the statistics resulting from the Survey of Industrial Research and Development, several new items were added to the survey forms for 2001. These included an item that asked for the sector identification of the performer of extramural or contracted-out R&D and an item that asked how much R&D companies performed in any of the following technological areas: biotechnology, materials processing, software development, and other areas, including nanotechnology. Also, the "type of R&D" item was expanded to ask companies for the cost of fringe benefits for R&D personnel. Final, detailed statistics for the new items will be available later this year in Research and Development in Industry: 2001 at the Internet address below and in forthcoming InfoBriefs.
This InfoBrief provides statistics and information from the 2001 Survey of Industrial Research and Development. The annual report, Research and Development in Industry: 2001, will be published later this year on the NSF website at http://www.nsf.gov/statistics/industry/. The annual report will contain the full set of tables available from the 2001 survey and will present R&D statistics by industry, size of company, source of funds, character of R&D, R&D as a percentage of net sales, R&D funded to outside organizations and performed outside the United States, R&D outsourcing, and R&D by technology area. The report will also provide historical trends in R&D, sales and total employment of R&D-performing companies, employment of R&D scientists and engineers, and statistics by state.
For more information contact
Raymond M. Wolfe
 In this InfoBrief, and in NSF industrial R&D statistics, company is defined as a business organization of one or more establishments under common ownership or control. Estimates of industrial R&D activity produced from the Survey of Industrial Research and Development are developed from data collected from a sample of companies selected each year.
 Company funding refers to funds provided by all sources except the Federal Government for industrial R&D performed within the company's domestic facilities. The funds are predominantly the company's own but also include funds from such outside organizations as other companies, research institutions, universities and colleges, nonprofit organizations, and state governments.
 This lack of growth in current-dollar expenditures, which represented a decline in constant-dollar expenditures, reflects a major change for company-funded R&D. Since the inception of the survey, in 1953, current-dollar company-funded R&D had increased each year and constant-dollar growth had declined only five times (in 1970, 1971, 1975, 1987, and 1993). Note that sampling may have an effect on year-to-year changes in the estimates.
 To avoid the possibility of disclosing company-specific information, data for industry-administered FFRDCs are now collected through NSF's Survey of Academic Science and Engineering R&D Expenditures, as are data from FFRDCs administered by academic institutions and nonprofit organizations. NSF estimates that industry-administered FFRDCs performed $1.7 billion of R&D during 2000 and $1.9 billion during 2001.
 The five industries listed are the top industries that performed Federally funded industrial R&D in the United States during 2001, for which statistics can be published. Federally funded R&D estimates for some industries cannot be disclosed because Title 13 of the United States Code and a pledge of confidentiality to survey respondents prohibits publication or release of data or statistics that may reveal information about individual companies. When a small number of respondents account for a large percentage of the industry estimate, some statistics must be suppressed. This is particularly true for statistics on Federally funded industrial R&D because relatively few companies perform the R&D.
 Companies in the wholesale and retail trade industry classification performed $24.3 billion of company-funded R&D during 2001; however, trade is not included in the list of top company-funded R&D performers shown. NSF strongly suspects that much of its R&D can be attributed to other activities not related to trade because of the way industry codes are assigned during statistical processing. A company's industry classification is a function of its primary activity based on payroll, which is not necessarily the primary source of its R&D activity. This has been particularly evident in recent years because of the growing tendency by some large pharmaceutical and computer manufacturers to market and sell their own products. This processing artifact is being examined and evaluated by NSF and the U.S. Census Bureau, which is the collection and tabulation agent for the survey.
 The deletion of the industry-administered FFRDCs from the survey had a negligible effect on the estimates for total domestic net sales.
 Preliminary statistics indicate that 192 companies reported expenditures of $3.1 billion for the performance of R&D by other for-profit companies, 80 companies reported $0.4 billion for the performance of R&D by universities and colleges, and 27 reported $0.2 billion for the performance of R&D by nonprofit organizations other than universities and colleges.
 Preliminary statistics indicate that 147 companies reported aggregate expenditures of $7.4 billion for performance of biotechnology R&D, 126 companies spent $7.7 billion for materials processing R&D, and 242 companies spent $9.4 billion for software development R&D.