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Business R&D Performance Remained Virtually Unchanged in 2010

NSF 13-324 | June 2013 | PDF format. PDF  
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by Raymond M. Wolfe[1]

Companies spent $279 billion on research and development performed in the United States during 2010, an amount that was essentially unchanged from the $282 billion spent during 2009 (table 1).[2] Funding from the companies' own sources was $225 billion during 2009 and $222 billion during 2010; funding from other sources was $57 billion in both years (table 2).[3] Data for this InfoBrief are from the Business R&D and Innovation Survey (BRDIS), which was developed and cosponsored by the National Science Foundation and the Census Bureau.

TABLE 1. Funds spent for business R&D performed in the United States, by source of funds and size of company: 2008–10
(Millions of U.S. dollars)
Selected characteristic 2008 2009 2010
Domestic R&D performancea 290,680 282,393 278,977
Source of funds
Paid for by the company 232,505 224,920 221,706
Paid for by others 58,176 57,473 57,271
Federal 36,360 39,573 34,199
Otherb 21,816 17,900 23,072
Size of company (number of domestic employees)
5–24c 14,280 11,794 12,573
25–49 9,626 9,692 8,625
50–99 9,351 13,282 8,855
100–249 14,662 12,747 11,866
250–499 10,219 11,204 10,283
500–999 11,886 10,119 10,117
1,000–4,999 46,336 44,008 48,228
5,000–9,999 24,764 21,864 27,463
10,000–24,999 48,737 51,037 41,835
25,000 or more 100,820 96,645 99,133

a For companies that reported worldwide R&D expense or worldwide R&D costs funded by others; see "Survey Information and Data Availability" for more information.
b Includes companies located inside and outside the United States, U.S. state government agencies and laboratories, foreign government agencies and laboratories, and all other organizations located inside and outside the United States.
c After the 2008 Business R&D and Innovation Survey sample was selected and surveyed, an error was identified that resulted in the exclusion of 226,884 single-establishment companies with five paid employees from the sample frame. Most of the excluded establishments were classified in industries with low R&D intensities, such as construction, retail trade, and the service sectors. Based on the available information for these small single-establishment companies, their contribution to the 2008 R&D estimates is estimated to be negligible.

NOTES: Detail may not add to total because of rounding. Excludes data for federally funded research and development centers. Business R&D and Innovation Survey does not include companies with fewer than five employees.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, Business R&D and Innovation Survey.

Table 1 Source Data: Excel file

TABLE 2. Funds spent for business R&D performed in the United States, by source of funds and selected industry: 2009 and 2010
(Millions of U.S. dollars)
Paid for by
the company
Paid for by others
Total Federal Companies All other organizationsb
Industry and NAICS code All R&D   Domestic Foreigna
2009
All industries, 21–33, 42–81c 282,393 224,920   57,473 39,573 9,567 7,647 685
Manufacturing industries, 31–33 195,144 158,225 36,920 28,825 3,345 4,532 218
Chemicals, 325 53,328 49,876 3,452 207 1,263 1,961 D
Pharmaceuticals and medicines, 3254 44,936 41,751 3,185 113 1,247 1,813 11
Other 325 8,392 8,125 267 94 16 148 D
Machinery, 333 9,138 8,782 356 150 133 67 D
Computer and electronic products, 334 56,436 48,865 7,571 5,210 738 1,578 D
Electrical equipment, appliance, and components, 335 3,334 3,105 228 70 55 66 D
Transportation equipment, 336 48,337 24,223 24,114 23,023 757 251 D
Automobiles, trailers, and parts, 3361–63 D 10,853 D D D D D
Aerospace products and parts, 3364 34,554 12,384 22,170 21,524 596 D D
Other 336 D 986 D D D D D
Manufacturing nec, other 31–33 24,570 23,374 1,199 165 399 609 D
Nonmanufacturing industries, 21–23, 42–81 87,248 66,695 20,553 10,749 6,223 3,115 467
Information, 51 33,806 32,995 811 194 349 233 34
Software publishers, 5112 26,395 25,729 666 176 267 191 32
Other 51 7,411 7,266 145 18 82 42 2
Finance and insurance, 52 1,912 1,904 8 1 6 0 0
Professional, scientific, and technical services, 54 44,946 26,031 18,915 10,461 5,531 2,505 168
Computer systems design and related services, 5415 12,560 10,742 1,818 1,240 449 122 7
Scientific R&D services, 5417 17,270 7,981 9,289 2,657 4,397 2,110 125
Other 54 15,116 7,308 7,808 6,564 685 273 36
Nonmanufacturing nec, other 21–23, 42–81 6,584 5,765 819 93 337 377 265
2010
All industries, 21–33, 42–81c 278,977 221,706 57,271 34,199 i 11,013 11,015 1,044
Manufacturing industries, 31–33 196,712 159,579 37,133 26,739 i 3,655 6,375 364
Chemicals, 325 58,038 53,555 4,483 180 D D D
Pharmaceuticals and medicines, 3254 49,415 45,398 4,017 99 D D D
Other 325 8,623 8,157 466 81 D D D
Machinery, 333 9,955 9,384 571 98 176 282 15
Computer and electronic products, 334 59,875 51,223 8,652 5,935 i 911 1,767 39
Electrical equipment, appliance, and components, 335 3,321 3,141 180 84 D D D
Transportation equipment, 336 42,913 21,076 21,837 i 20,191 i 1,016 541 89
Automobiles, trailers, and parts, 3361–63 D 10,098 D D D D D
Aerospace products and parts, 3364 29,854 10,152 19,702 i 18,921 i 635 D D
Other 336 D 826 D D D D D
Manufacturing nec, other 31–33 22,610 21,200 1,410 251 D D D
Nonmanufacturing industries, 21–23, 42–81 82,265 62,127 20,138 7,460 7,358 4,532 788
Information, 51 36,853 36,085 768 152 244 D D
Software publishers, 5112 26,982 26,387 595 140 134 D D
Other 51 9,871 9,698 173 12 110 D D
Finance and insurance, 52 2,109 2,109 0 0 0 0 0
Professional, scientific, and technical services, 54 33,690 15,438 18,252 6,829 6,906 3,801 716
Computer systems design and related services, 5415 11,050 9,416 1,634 712 397 348 177
Scientific R&D services, 5417 12,140 2,851 11,968 3,279 5,344 3,144 201
Other 54 10,500 3,171 4,650 2,838 1,165 309 338
Nonmanufacturing nec, other 21–23, 42–81 9,613 8,495 1,118 479 208 D D

D = suppressed to avoid disclosure of confidential information; i = > 50% of value imputed.

NAICS = North American Industry Classification System; nec = not elsewhere classified.

a Includes foreign owners of foreign-owned companies.
b Includes U.S. state government agencies and laboratories, foreign government agencies and laboratories, and all other organizations located inside and outside the United States.
c Includes companies that reported worldwide R&D expense or worldwide R&D costs funded by others; see "Survey Information and Data Availability" for more information.

NOTES: Detail may not add to total because of rounding. Industry classification was based on dominant business code for domestic R&D performance where available. For companies that did not report business codes, classification used for sampling was assigned. Excludes data for federally funded research and development centers.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, Business R&D and Innovation Survey.

Table 2 Source Data: Excel file

R&D Performance by Industrial Sector and Source of Funding

During 2010, companies in manufacturing industries performed $197 billion of domestic R&D (70.5% of total domestic R&D performance) (table 2).[4] Most of the funding was from companies' own funds (81.1%). Companies in nonmanufacturing industries performed $82 billion of domestic R&D (29.5% of total domestic R&D performance), 75.5% of which was paid for from companies' own funds. The U.S. federal government was the chief source of outside funding (also referred to as R&D paid for by others) for R&D across all industries. Of the $57 billion paid for by others, the federal government contributed $34 billion. Most of the funds ($29 billion) came from the Department of Defense.[5] Aerospace products and parts (North American Industry Classification System [NAICS] 3364) and professional, scientific, and technical services (NAICS 54) received about three-quarters of federal government R&D funding. Next among funders were other U.S. for-profit companies ($11 billion) and foreign companies ($11 billion), including foreign parents of U.S. subsidiaries (table 2) (see "Survey Information and Data Availability" for information on industry classification).

Sales, R&D Intensity, and Employment of R&D Performers

U.S. companies that performed or funded R&D reported domestic net sales and operating revenues of $9 trillion in 2010 (table 3).[6] For all industries, the R&D intensity (ratio of domestic R&D performance to domestic net sales) was 3.2%; for manufacturers, 4.1%; and for nonmanufacturers, 2.1%. Manufacturing industries with high R&D intensity in 2010 were pharmaceuticals and medicines (NAICS 3254), 12.7%, and aerospace products and parts (NAICS 3364), 9.7%. Among the nonmanufacturing industries, two with high ratios were scientific R&D services (NAICS 5417), 14.2%, and software publishers (NAICS 5112), 9.7%.

TABLE 3. Sales and employment for companies that performed or funded business R&D, by selected industry and company size: 2010
Industry and NAICS code Domestic
net salesa
(US$millions)
R&D
intensityb
(%)
Domestic employmentc
(thousands)
   
Total R&Dd
All industries, 21–33, 42–81e 8,818,081 3.2 18,638 1,412
Manufacturing industries, 31–33 4,845,584 4.1 10,260 849
Chemicals, 325 1,017,360 5.7 1,439 169
Pharmaceuticals and medicines, 3254 387,932 12.7 538 120
Other 325 629,428 1.4 901 49
Machinery, 333 257,089 3.9 800 65
Computer and electronic products, 334 623,950 9.6 1,393 266
Electrical equipment, appliance, and components, 335 111,576 3.0 351 29
Transportation equipment, 336 913,573 4.7 1,670 155
Motor vehicles, trailers, and parts, 3361–63 548,168 D 709 50
Aerospace products and parts, 3364 307,624 9.7 766 81
Other 336 57,781 D 195 24
Manufacturing nec, other 31–33 1,922,036 1.2 4,607 165
Nonmanufacturing industries, 21–23, 42–81 3,972,497 2.1 8,378 563
Information, 51 802,714 4.6 1,770 208
Software publishers, 5112 269,454 9.7 509 141
Other 51 533,260 2.0 1,261 67
Finance and insurance, 52 1,323,538 0.2 1,490 16
Professional, scientific, and technical services, 54 485,847 6.9 1,564 260
Computer systems design and related services, 5415 179,010 i 6.2 i 434 114
Scientific R&D services, 5417 104,267 14.2 209 80
Other 54 202,570 3.9 921 66
Nonmanufacturing nec, other 21–23, 42–81 1,360,398 0.7 3,554 79
Size of company (number of domestic employees)
5–24 99,210 12.7 450 115
25–49 125,774 6.9 506 75
50–99 147,427 6.0 561 79
100–249 288,005 4.1 1,020 102
250–499 330,500 3.1 732 70
500–999 317,704 3.2 745 58
1,000–4,999 1,195,200 4.0 2,628 217
5,000–9,999 1,345,492 2.0 1,651 130
10,000–24,999 1,666,206 2.5 2,555 176
25,000 or more 3,302,562 3.0 7,788 390

D = suppressed to avoid disclosure of confidential information; i = > 50% of value imputed.

NAICS = North American Industry Classification System; nec = not elsewhere classified.

a Excludes intracompany transfers and sales by foreign subsidiaries but includes transfers to foreign subsidiaries and export sales to foreign companies
b R&D intensity = domestic R&D performance/domestic net sales.
c Data recorded on 12 March represent employment figures for the year.
d Includes scientists and engineers and their managers, as well as technicians, technologists, and support staff.
e Includes companies that reported worldwide R&D expense or worldwide R&D costs funded by others; see "Survey Information and Data Availability" for more information.

NOTES: Detail may not add to total because of rounding. Industry classification was based on dominant business code for domestic R&D performance where available. For companies that did not report business codes, classification used for sampling was assigned. Excludes data for federally funded research and development centers. Business R&D and Innovation Survey does not include companies with fewer than five employees.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, Business R&D and Innovation Survey, 2010.

Table 3 Source Data: Excel file

Businesses that performed or funded R&D employed 18.6 million people in the United States during 2010. Some 1.4 million (7.6%) were R&D employees.[7] Not surprisingly, two manufacturing industries with high numbers of R&D employees in 2010 were pharmaceuticals and medicines (120,000 R&D employees) and aerospace products and parts (81,000 R&D employees), and two nonmanufacturing industries with high numbers of R&D employees were software publishers (141,000) and computer systems design and related services (114,000) (table 3).

R&D Performance by State

During 2010, companies reported $222 billion of domestic R&D paid for by the company. Businesses in California alone accounted for 24.1% of the nation's business R&D in 2010 (table 4). Other states with large amounts of company-funded business R&D, as reflected by the percentages of the national total they accounted for in 2010, were New Jersey (6.3%), Washington (5.9%), Texas (5.3%), Illinois (5.2%), Massachusetts (5.0%), Michigan (4.8%), Pennsylvania (3.8%), New York (3.7%), and Minnesota (2.6%).

TABLE 4. Funds spent for business R&D performed in the United States, by source of funds and state: 2010
(Million of current dollars)
State All R&D   Paid for
by the
company
  Paid for by
others
 
United Statesa 278,977 221,706 57,271
Alabama 1,449 628 821
Alaska 74 D D
Arizona 4,054 2,841 1,213 i
Arkansas 276 245 31 e
California 64,914 53,327 11,587
Colorado 3,899 3,270 629
Connecticut 6,498 5,482 1,017
Delaware 2,144 D D
District of Columbia 235 84 e 151
Florida 5,127 3,045 2,083
Georgia 3,644 2,931 713 i
Hawaii 257 173 84
Idaho 1,120 i 810 i 309
Illinois 12,221 11,500 721
Indiana 4,985 4,219 766
Iowa 1,950 1,516 433
Kansas 1,492 1,039 454
Kentucky 889 820 69
Louisiana 428 340 88
Maine 251 228 24
Maryland 4,384 2,538 1,847
Massachusetts 14,020 11,139 2,882
Michigan 12,144 10,750 1,394
Minnesota 6,246 5,677 569
Mississippi 243 170 73
Missouri 8,106 i D D
Montana 145 123 22 i
Nebraska 527 491 36 e
Nevada 709 646 63
New Hampshire 1,818 841 977
New Jersey 15,925 13,916 2,009
New Mexico 546 231 315 i
New York 10,954 8,126 2,828
North Carolina 5,749 4,688 1,060
North Dakota 236 211 25
Ohio 6,857 5,134 1,723
Oklahoma 478 422 57 e
Oregon 4,396 4,188 208
Pennsylvania 9,246 8,412 834
Rhode Island 531 448 82
South Carolina 1,316 944 372 i
South Dakota 120 99 21
Tennessee 1,244 1,113 131
Texas 14,384 11,850 2,535
Utah 2,066 1,419 647
Vermont 313 278 35
Virginia 4,655 2,340 2,315 i
Washington 13,545 13,022 523
West Virginia 240 191 49
Wisconsin 3,927 3,399 528
Wyoming 39 e 32 e 7 e
Undistributed fundsb 17,960 12,534 5,426

D = data withheld to avoid disclosing operations of individual companies; e = more than 50% of the cell value is imputed due to raking of state data; i = more than 50% of the cell value is imputed due to reasons other than raking of state data.

a Includes companies that reported worldwide R&D expense or worldwide R&D costs funded by others; see "Survey Information and Data Availability" for more information.
b Includes data reported on Form BRDI-1 not allocated to a specific state. Data reported on Forms BRDI-1A and BRDI-1B, the questionnaires sent to small companies or companies new to the survey, were allocated to the state in the address on the company's survey form, which is usually the company's headquarters.

NOTES: Detail may not add to totals because of rounding. Excludes data for federally funded research and development centers.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, Business R&D and Innovation Survey, 2010.

Table 4 Source Data: Excel file

R&D Performance by Company Size

Small companies (5 to 499 domestic employees [8] ) performed 18.7% of the nation's total business R&D in 2010. In these companies, the R&D intensity was 5.3%, compared with 3.2% for all companies (tables 1 and 3). Small companies accounted for 11.2% of sales and employed 17.5% of those who worked for R&D-performing or R&D-funding companies. Of the 1.4 million R&D employees engaged in business R&D in the United States, 31.2% worked for small companies. By contrast, the largest companies (25,000 or more domestic employees) accounted for 37.5% of sales and performed 35.5% of the nation's total business R&D in 2010, and their R&D intensity was 3.0%. The largest companies employed 41.8% of those who worked for R&D-performing or R&D-funding companies, including 27.6% of the U.S. R&D employees.

Survey Information and Data Availability

The sample for BRDIS was selected to represent all for-profit, nonfarm companies that have five or more domestic employees, that are publicly or privately held, and that perform or fund R&D or engage in innovative activities in the United States. Because the statistics from the survey are based on a sample, they are subject to both sampling and nonsampling errors (see technical notes in the annual reports at http://www.nsf.gov/statistics/industry/).

For 2009, a total of 43,022 companies, representing 2,090,201 companies in the population, were selected for the sample; for 2010, a total of 42,965 companies were sampled, representing 2,013,448 companies. The actual numbers of companies that remained within the scope of the survey between sample selection and tabulation were 40,300 for 2009 and 39,968 for 2010. These lower counts represent the number of companies that were determined to be within the scope of the survey after all data collected were processed. Reasons for the reduced counts include mergers, acquisitions, and instances where companies had gone out of business in the interim. Of these in-scope companies, 73.1% were considered to have met the criteria for a complete response to the 2009 survey; 71.4% met the 2010 survey response criteria.

Industry classification was based on the dominant business activity for domestic R&D performance where available. For reporting units that did not report business activity codes for R&D, the classification used for sampling was assigned.

Detailed information about the BRDIS samples and methodology and comparisons with its predecessor, the Survey of Industrial Research and Development, are available at http://www.nsf.gov/statistics/srvyindustry/. Previously published InfoBriefs on topics covered by BRDIS are available at http://www.nsf.gov/statistics/industry/, and the full set of detailed statistical tables from the 2010 cycle of BRDIS will be available there in the report Business R&D and Innovation: 2008–10. Individual detailed tables, relative standard errors, and imputation rates from the 2010 survey may be available in advance of the full report. For further information, please contact the author.

BRDIS microdata can be accessed only at the secure Research Data Centers administered by the Center for Economic Studies at the Census Bureau. To learn more about the Research Data Centers and how to apply for data use, please visit http://www.census.gov/ces/main/contact.html.

Notes

[1]. Raymond M. Wolfe, Research and Development Statistics Program, National Center for Science and Engineering Statistics, National Science Foundation, 4201 Wilson Boulevard, Suite 965, Arlington, VA 22230 (rwolfe@nsf.gov; 703-292-7789).

[2]. Company is defined as a business organization located in the United States, either U.S.-owned or a U.S. affiliate of a foreign parent, of one or more establishments under common ownership or control that performs or funds R&D. Money amounts in this InfoBrief are expressed in current U.S. dollars and are not adjusted for inflation. For information about BRDIS, see NRC 2005, NSB 2012, and NSF/SRS 2008.

[3]. The 2008 and 2009 figures in this InfoBrief were released earlier—see NSF/NCSES 2012. The 2010 figures are the initial release of the final statistics from the latest cycle of BRDIS and are the focus of the remainder of this InfoBrief. More detailed final statistics from the 2010 cycle will be available in Business R&D and Innovation: 2008–10 and in forthcoming InfoBriefs.

[4]. Throughout the text and tables in this InfoBrief, domestic R&D refers to business R&D performed in the 50 United States and Washington, D.C.

[5]. Statistics by U.S. federal government agency are from the full set of detailed statistical tables. For further information, please contact the author.

[6]. Determining the amount of domestic net sales and operating revenues was left to the reporting company. However, guidance was given to exclude intracompany transfers and sales by foreign subsidiaries but include transfers to foreign subsidiaries and export sales to foreign companies.

[7]. Employment statistics in this InfoBrief are head counts. Full-time equivalent statistics are available in the detailed statistical tables. R&D employees include scientists and engineers and their managers, technicians, technologists, and support staff members who work on R&D or who provide direct support to R&D activities.

[8]. BRDIS does not include companies with fewer than five domestic employees. Preliminary work is underway on a new survey, the Microbusiness Innovation Science and Technology Survey, that will include companies with fewer than five employees.

References

National Research Council (NRC). 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. Available at http://www.nap.edu/openbook.php?record_id=11111&page=R2.

National Science Board (NSB). 2012. Chapter 4. Science and Engineering Indicators: 2012. NSB 12-01. Arlington, VA. Available at http://www.nsf.gov/statistics/seind12/.

National Science Foundation, Division of Science Resources Statistics (NSF/SRS). 2008. NSF Announces New U.S. Business R&D and Innovation Survey. InfoBrief NSF 09-304. Arlington, VA. Available at http://www.nsf.gov/statistics/infbrief/nsf09304/.

National Science Foundation, National Center for Science and Engineering Statistics (NSF/NCSES). 2012. Business R&D Performed in the United States Cost $291 Billion in 2008 and $282 Billion in 2009. InfoBrief NSF 12-309. Arlington, VA. Available at http://www.nsf.gov/statistics/infbrief/nsf12309/.


National Science Foundation, National Center for Science and Engineering Statistics
Business R&D Performance Remained Virtually Unchanged in 2010
Arlington, VA (NSF 13-324) [June 2013]


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