U.S. Research and Development Funding and Performance: Fact Sheet

U.S. Research and Development Funding and Performance: Fact Sheet

U.S. Research and Development Funding and
Performance: Fact Sheet
Updated September 13, 2022
Congressional Research Service
https://crsreports.congress.gov
R44307

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U.S. Research and Development Funding and Performance: Fact Sheet

esearch and development (R&D) in the United States is funded and performed by a
number of sectors—including the federal government, state governments, businesses,
R academia, and nonprofit organizations—for a variety of purposes. This fact sheet begins
by providing a profile of the U.S. R&D enterprise, including historical trends and current funding
by sector and by whether the R&D is basic research, applied research, or development. The final
section of this fact sheet includes data on R&D performance by sector.
Historical Trends in U.S. R&D Funding
The United States became a global leader in R&D in the 20th century, funding as much as 69% of
annual global R&D in the period following World War II.1 Figure 1 shows the growth in total
U.S. R&D expenditures from 1956 to 2020 in current dollars.2 U.S. R&D in 2020 was 83 times
higher than it was in 1956 in current dollars, and more than 11 times higher in constant dollars.3
By sector, business-funded R&D grew the most during this period. However, faster growth in
total R&D spending of other nations reduced the U.S. share of global R&D to approximately
30.7% in 2020.4
Figure 1. U.S. R&D Expenditures by Source of Funding, 1956-2020
Current dollars, in billions

Source: CRS analysis of National Science Foundation, National Patterns of R&D Resources: 2019–20 Data Update,
NSF 22-320, Table 6, February 22, 2022, https://ncses.nsf.gov/pubs/nsf22320.

1 Office of Technology Policy, U.S. Department of Commerce, The Global Context for U.S. Technology Policy, 1997.
2 Data for all years in this report are for fiscal years unless otherwise specified.
3 CRS analysis of data from National Science Foundation, National Patterns of R&D Resources: 2019–20 Data
Update, NSF 22-320, Table 6, February 22, 2022, https://ncses.nsf.gov/pubs/nsf22320. 2020 is the latest year for which
total U.S. R&D data are available.
4 Organisation for Economic Co-operation and Development, OECD.Stat, Main Science and Technology Indicators,
database, https://stats.oecd.org/Index.aspx?DataSetCode=MSTI_PUB. 2020 is the latest year for which mostly
complete data is available. For more information about global R&D, see CRS Report R44283, Global Research and
Development Expenditures: Fact Sheet, by John F. Sargent Jr.
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Notes: The data for 2020 are estimates and are likely to be revised later.
Two sectors—business and the federal government—have together accounted for more than 90%
of U.S. R&D funding since 1955, though their combined share has fallen from a high of 98% in
1956 to 93% in 2016. Federal R&D expenditures as a share of total U.S. R&D expenditures
peaked in 1964 at 66.8%, the same year that business R&D expenditures reached a nadir of
30.8%. Between 1964 and 2000, the federal government’s share fell and business’s share rose. In
2000, business accounted for 69.4% of U.S. R&D expenditures and the federal government
25.1%. This shift in the composition of R&D funding resulted not from a reduction in federal
government R&D expenditures, but rather from faster growth in business R&D expenditures.
From 2000 to 2010, business R&D’s share declined from 69.4% to 61.0%, and has risen each
year since, reaching an all-time high of 73.1% in 2020; from 2010 to 2020, the federal share
declined from 31.1% to 19.5%.5 (See Figure 2.)
Trends in Federally Funded R&D
In current dollars, federal funding for R&D
grew from $3.5 billion in 1955 to $137.8
Figure 2. Federal and Business Shares of
billion in 2020, a compound annual growth
U.S. R&D Expenditures, 1956-2020
rate (CAGR) of 5.3%. In constant dollars,
federal R&D grew by a 2.1% CAGR during
this period. However, between 2011 and
2014, federal R&D funding, as measured in
current dollars, fell for three consecutive
years for the first time since such data has
been collected; the total decline in federal
funding for these years was $8.6 billion
(6.8%). In constant dollars, federal R&D
declined from 2009 to 2016 by 15.6%; a

similar drop occurred from 1987 to 1994,
Source: CRS analysis of National Science
when federal R&D fell by 16.0%.6 In
Foundation, National Patterns of R&D Resources: 2019–
FY2017, FY2018, FY2019, and FY2020,
20 Data Update, NSF 22-320, Table 6, February 22,
federal R&D grew by 1.0%, 4.1%, 1.4%, and
2022.
1.8% respectively, in constant dollars. Figure
Notes: The data for 2020 are estimates and are likely
3 shows federal R&D funding by budget
to be revised later.
function in constant dollars from 1956 to 2020.

5 CRS analysis of National Science Foundation, National Patterns of R&D Resources: 2019–20 Data Update, NSF 22-
320, Table 6, February 22, 2022.
6 Ibid.
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U.S. Research and Development Funding and Performance: Fact Sheet

Figure 3. Federal R&D Funding by Budget Function, 1956-2021
Current dollars, in billions

Source: CRS analysis of data from National Science Foundation, Federal R&D Funding, by Budget Function: Fiscal
Years 2020–22, (NSF 22-316), Table 23, January 18, 2022, https://ncses.nsf.gov/pubs/nsf22316.
Notes: Data from FYs 1956–1994 are from agencies’ submissions to OMB, Circular A-11, exhibit 44A,
“Research and development activities,” and from supplemental data obtained from agencies’ budget offices. Data
from FYs 1995–2021 are from agencies’ submissions to OMB per MAX Schedule C, budget justification
documents, and supplemental data obtained from agencies’ budget offices. Beginning in 2017, OMB ceased
including non-experimental development in its national R&D calculations (including Department of Defense
budget activity 6.7 and some funding for the National Aeronautics and Space Administration). Data for 2021
(included in the chart but not shown on the axis) are preliminary and may be revised.
Trends in U.S. Business-Funded R&D
Business funding of R&D, measured in current dollars, has grown nearly every year since 1955.
In current dollars, business-funded R&D grew from $3.3 billion in 1956 to $517.4 billion in
2020, a compound annual growth rate of 8.2%. In constant dollars, business-funded R&D grew
by a 4.9% CAGR during this period. In recent years, business-funded R&D has grown at a slower
pace. Between 2000 and 2020, business R&D grew by 5.2% CAGR in current dollars, and by
3.3% CAGR in constant dollars.7

7 Ibid.
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Current Composition of U.S. R&D Funding
R&D funding can be categorized by the
Character of R&D: Definitions
character of the work that it supports: basic
Basic research. Experimental or theoretical work
research, applied research, and development.
undertaken primarily to acquire new knowledge of
(See text box for definitions.) Total estimated
the underlying foundations of phenomena and
U.S. R&D expenditures in 2020 (the most recent
observable facts, without any particular application
or use in view.
year for which data are available) were $708.0
Applied research. Original investigation
billion. Of this amount, $107.9 billion (15.2%)
undertaken to acquire new knowledge; directed
was for basic research, $139.5 billion (19.7%)
primarily, however, toward a specific, practical aim
was for applied research, and $460.5 billion
or objective.
(65.1%) was for development.8
Development. Systematic work, drawing on
knowledge gained from research and practical
Table 1 shows total U.S. R&D expenditures in
experience and producing additional knowledge,
2020 by funding sector and character of work.
which is directed to producing new products or
Notably, federal R&D funding accounts for the
processes or to improving existing products or
largest share of basic research (40.7%) while
processes.
business accounts for the largest shares of
Source: National Science Board, Science and Engineering
applied research (55.0%) and development
Indicators 2018.
(85.5%). Figure 4 shows this information
graphically.
Table 1. U.S. R&D Funding by Sector and Character, 2020
Current dollars, in billions
Basic Research
Applied Research
Development
Total
Sector
Dol ars Percent
Dol ars
Percent
Dol ars
Percent
Dol ars
Percent
Federal Government
43.8
40.6%
43.7
31.3%
50.3
10.9%
19.5%
137.8
Nonfederal
2.7
2.5%
1.7
1.2%
0.6
0.1%
0.7%
Government
5.0
Business
36.2
33.5%
78.6
56.3%
402.7
87.4%
73.1%
517.4
Higher Education
14.3
13.3%
6.0
4.3%
2.2
0.5%
3.2%
22.6
Other Nonprofit
10.9
10.1%
9.5
6.8%
4.7
1.0%
3.5%
Organizations
25.1
Total
107.9
100.0% 139.5
100.0%
460.5
100.0%
708.0 100.0%
Source: CRS analysis of National Science Foundation, National Patterns of R&D Resources: 2019–20 Data Update,
NSF 22-320, Tables 7-9, February 22, 2022. Elements may not add to totals due to rounding.
Note: Rows and columns may not add to totals due to rounding. 2020 data are preliminary and may be revised.

8 CRS analysis of National Science Foundation, National Patterns of R&D Resources: 2019–20 Data Update, NSF 22-
320, Tables 7-9, February 22, 2022. Elements may not add to totals due to rounding.
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Figure 4. U.S. R&D Funding by Character and Sector, 2020

Source: CRS analysis of National Science Foundation, National Patterns of R&D Resources: 2019–20 Data Update,
NSF 22-320, Tables 7-9, February 22, 2022.
Notes 2020 data are preliminary and may be revised.
Current Composition of U.S. R&D Performance
R&D is often performed by sectors other than the one funding the R&D. For example, the federal
government performs some of the research it funds, but also funds research performed by
business, universities and colleges, and other organizations. Table 2 provides data on
performance of U.S. R&D by sector and character of the work (basic research, applied research,
and development).
Table 2. U.S. R&D Performance by Sector and Character, 2020
Current dollars, in billions
Basic Research
Applied Research
Development
Total
Sector
Dol ars
Percent
Dol ars
Percent
Dol ars
Percent
Dol ars
Percent
Federal
12.6
11.7% 21.6
15.5%
31.5
6.8%
65.7
9.3%
Government
Nonfederal
0.1
0.1% 0.5
0.4%
0.0
0.0%
0.7
0.1%
Government
Business
34.7
32.2% 81.0
58.1%
416.3
90.4%
532.0
75.1%
Higher
50.9
47.2% 22.6
16.2%
7.6
1.7%
81.1
11.5%
Education
Other
9.6
8.9% 13.8
9.9%
5.2
1.1%
28.5
4.0%
Nonprofit
Organizations
Total
107.9 100.0%
139.5 100.0%
460.5 100.0%
708.0 100.0%
Source: CRS analysis of National Science Foundation, National Patterns of R&D Resources: 2019–20 Data Update,
NSF 22-320, Tables 3-5, February 22, 2022.
Note: Rows and columns may not add to totals due to rounding. 2020 data are preliminary and may be revised.

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U.S. Research and Development Funding and Performance: Fact Sheet

Author Information

John F. Sargent Jr.

Specialist in Science and Technology Policy

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