Federal R&D Funding: A Concise History

Prior to World War II, federal R&D funding was generally small and focused on specific items of direct interest to the federal government such as exploration of federal lands. In the 20th century, the federal role expanded to include research related to public health concerns, national security (World War I), and some limited efforts to help U.S. business, including research on aeronautics and standards. The research effort accompanying World War II set off a major expansion of federal R&D funding after the war. Total R&D funding increased from a little over $5.5 billion in 1947 to about $71.4 billion in FY1998, in 1998 dollars. Funding for R&D over that period has been largely guided by policy emerging from a 1945 report on science research by Vannevar Bush. Several other policy initiatives, however, have also driven R&D funding over that period including expansion of the space program during the 1960s, response to the oil embargos in the 1970s, the defense buildup of the late 1970s and early 1980s, and actions to assist economic growth in the 1990s. A major feature of federal R&D funding in the last 50 years has been the steady and growing support of basic research. That the federal government should be the primary funding source for basic research was the key recommendation of the Bush report and has since been a constant of federal R&D policy. While much federally funded basic research is performed in support of agency missions, most is performed at the nation's universities primarily to advance knowledge for its own sake. Currently, federal R&D support appears to be high in the Congress and Administration. Efforts over the past 4 years to balance the federal budget have not resulted in the reduction in federal R&D funds as was first projected. Indeed, civilian R&D funding has continued to grow in constant dollar terms. In addition, Congress is undertaking efforts to establish a new science policy to guide federal R&D efforts for the next several decades. There appears to be considerable support in Congress for continuing federal support of R&D as a high budget priority. The pressures on federal spending resulting from the budget caps adopted in 1997, however, will continue to mount even in the face of this support and growing budget surpluses. As a result, continued growth in R&D might be increasingly difficult to achieve.