Strong R&D Spending Supports U.S. Economic Growth, NSF Report Shows

Dramatic increases in research and development (R&D) investments during the past decade, largely from industry, have contributed to U.S. standing as a global economic power, according to Science and Engineering Indicators 2002, a biennial report of the National Science Board. The U.S. had $244.1 billion in R&D investments in 1999, an increase of nearly $33 billion from 1997, the report shows. In addition, the U.S. accounts for 44 percent of the total worldwide investment in R&D — an amount equal to the combined total of Japan, the United Kingdom, Canada, France, Germany and Italy.



R&D investments by U.S. industry, S&E Indicators reports, have contributed to a steady stream of innovations and spurred economic growth, increasing per-capita income. The report adds that changes in the conduct of research and development also have led to transformations in other areas, including a growth in science-based patents and an increased level of high-tech exports.



Meanwhile, the balance of R&D investments continues to shift, according to S&E Indicators. As industry R&D grew to nearly 75 percent of the national total by 2000, federal expenditures remained essentially flat over the past decade. Since 1980, the share of basic research to total national R&D has risen from 14 to 18 percent. Federal research expenditures in life sciences also rose from 41 to 47 percent of the federal total between 1990 and 2000, but the combined share of physical sciences and engineering in federal research total dropped from 37 to 29 percent in the same period.



On the state level, California remains the leader in the level of R&D investments, S&E Indicators reports. The state's $48 billion mark in 1999 reflects a 15.1 percent increase over its $41.7 billion level in 1997. Michigan, with $18.8 billion in 1999, shows a 34.3 percent increase over 1997 and remains second overall. Similarly, New York is still third, showing $14.1 billion as the level of its R&D investments in 1999.



Rounding out the top 10 states are Texas ($12.4 billion), Massachusetts ($12.2 billion), Pennsylvania ($10.7 billion), New Jersey ($10.5 billion), Illinois ($9.7 billion), Washington ($8.3 billion) and Maryland ($8 billion). Among the top 20, nine states hold the same ranking in 1999 as they held in 1997. Arizona (14) and Georgia (20) entered the top 20 in 1999, replacing Indiana and the District of Columbia.



S&E Indicators also highlights trends among the nation's workforce and education system. Additional findings include:

• Defense-related R&D fell by the end of the decade to a 50-year low of about 14 percent of the U.S. R&D total.
• Science and engineering occupational fields are growing faster than the overall growth of the American workforce. The Bureau of Labor Statistics predicts that during this decade, S&E occupations will grow by 47 percent, compared to 15 percent for the labor force as a whole.
• The high-tech industries' share of national manufacturing output rose from 9.6 percent to 16.6 percent during the period 1980 to 1998.
• In academia, the number of doctorates awarded in sciences and engineering rose from 24,023 to 25,970 between 1991 and 2000.

Science and Engineering Indicators 2002 is available at: http://www.nsf.gov/sbe/srs/seind02/start.htm A press 

release on the two-volume report and other backgrounders are available at: http://www.nsf.gov/od/lpa/news/02/pr0228.htm