Current-dollar R&D conducted in the United States
increased 6.0%, or $19.3 billion, in 2006 to a level of $342.9 billion, according to projections released by the National Science Foundation (NSF) (table 1). In 2005, current-dollar R&D had increased 7.8%, or $23.5 billion, to $323.5 billion. Estimates for 2005 and 2006 are based on projections and survey data that are incomplete or subject to further revision.
Table 1 Source Data: Excel file
Real domestic research and development–expenditures on R&D adjusted to account for inflation–increased 3.5% in 2006 (table 2). In 2005, real R&D had increased by 5.0%. The increase in real R&D in 2006 primarily reflected growth in R&D performed by for-profit companies operating in the United States. R&D performed by federal agencies and in federally funded research and development centers (FFRDCs) declined in 2006. R&D performed by universities and colleges and by nonprofit institutions both increased.
Table 2 Source Data: Excel file
Funding for R&D
The largest sources of funding for R&D are the business sector and federal government. Together these two sectors funded 93.2% of the R&D performed in the United States in 2006 (figure 1). Real R&D funding from the business sector increased 4.9% in 2006, whereas real R&D funding from the federal government did not change significantly. The federal government's share of the nation's R&D funding peaked in 1964 at 66.8%. In 2006 it funded 28.2% of U.S. R&D. However, the federal government remains the primary source of funding for R&D performed at U.S. colleges and universities, funding 63.6% of academic R&D in 2006.
Figure 1 Source Data: Excel file
Discrepancy in Federal R&D Funding
Data on federal funding for R&D reported here are based on surveys of organizations that conduct R&D, such as companies, universities, and FFRDCs. Federal funding for R&D based on data from these R&D performers differ substantially from the amount of R&D federal agencies report funding. The National Academies' Committee on National Statistics (CNSTAT) has recommended that NSF publish an annual reconciliation of estimates for federal R&D funding as reported by performers of R&D and as reported by federal agencies.
For FY 2006, federal agencies reported obligating $108.4 billion in total R&D to all R&D performers ($44.3 billion, or 41%, to industry), compared with $96.8 billion in federal funding reported by the performers of R&D. Although NSF has not found a definitive explanation for this divergence, CNSTAT notes that comparing federal outlays (as opposed to obligations) for R&D to performer expenditures results in a smaller discrepancy.
For FY 2006, federal agencies reported R&D outlays of $103.7 billion to all R&D performers. The difference in the federal R&D totals appears to be concentrated in the funding of industry R&D by the Department of Defense. See National Science Foundation (2005) for further discussion of these differences.
The U.S. R&D data presented here are derived by adding up the R&D performance for all sectors of the economy for which it can be reasonably estimated. Data from surveys that reference fiscal years (Survey of R&D Expenditures at Universities and Colleges and Survey of Federal Funds for R&D) are converted to a calendar year basis for the purpose of producing national R&D estimates. Preliminary estimates for 2005 and 2006 were derived for each data series using the following information or techniques:
- Federal intramural R&D, R&D performed by FFRDCs, and federally funded R&D performed by industry and nonprofit institutions were estimated using preliminary data reported by federal agencies on the FY 2004 Survey of Federal Funds for R&D, data from the federal R&D budget, and forecast economic growth rates.
- Industrial R&D funded by nonfederal sources was estimated using preliminary data reported by companies on the 2005 Survey of Industrial R&D.
- University and college R&D was estimated using time-series forecasting techniques (log damped trend exponential smoothing models).
- Nonprofit R&D funded by nonfederal sources was estimated using models based on the R&D trends of other sectors of the economy and historical data from the Survey of R&D Funding & Performance by Nonprofit Organizations.
The full set of detailed statistical tables from this survey will be available in the report, National Patterns of Research and Development Resources: 2006, at http://www.nsf.gov/statistics/natlpatterns/. For further information contact
Research and Development Statistics Program
Division of Science Resources Statistics
National Science Foundation
4201 Wilson Boulevard, Suite 965
Arlington, VA 22230
National Research Council. 2005. Measuring Research and Development Expenditures in the U.S. Economy. Panel on Research and Development Statistics at the National Science Foundation, Committee on National Statistics, Division of Behavioral and Social Sciences and Education. Washington, DC: The National Academies Press.
National Science Foundation, Division of Science Resources Statistics. 2005. National Patterns of R&D Resources: 2003. NSF 05-308. Brandon Shackelford, project officer. Arlington, VA.
 The sources of data for sector-specific R&D performance are the following NSF surveys: Survey of Industrial R&D, Survey of R&D Expenditures at Universities and Colleges, Survey of Federal Funds for R&D, and Survey of R&D Funding & Performance by Nonprofit Organizations.
 FFRDCs are R&D-performing organizations that are exclusively or substantially financed by the federal government either to meet particular R&D objectives or, in some instances, to provide major facilities at universities for research and associated training purposes. Each FFRDC is administered either by an industrial firm, a university, or a nonprofit institution.