U.S. R&D Spending Remained Steady Through Recession, With Help From ARRA

The National Science Foundation (NSF) National Center for Science and Engineering Statistics (NSCES) has released a series of InfoBriefs that track U.S. R&D spending from 2009-10, as the country endured and began to recover from the recession. In 2009, U.S. R&D spending suffered its first decline since the 1950s, though that decline was minimal (0.6 percent) and much smaller than the drop in U.S. GDP (2.5 percent). After adjusting for inflation, the $400.5 billion spent on R&D in 2009 represents a slightly larger decrease (1.7 percent) than in current dollars.

The U.S. remains the world's leading performer of R&D, accounting for 31 percent of global R&D spending in 2009. China is the second largest performer (12 percent of global spending), followed by Japan (11 percent). R&D intensity, the ratio of R&D spending to GDP, is used by many sources to compare the focus of international economies on research. The U.S. ranks eighth in R&D intensity among countries tracked by the Organization for Economic Co-operation and Development. Israel, Finland, Sweden, Japan, South Korea, Switzerland and Taiwan all lead the U.S. in the rankings.

Business R&D Performance

NSCES attributes the 2009 slowdown to a drop in business R&D as high-tech industries faced uncertainty during the economic crisis. The private sector is the largest performer of U.S. R&D, funding 69-75 percent of all R&D since 1989. In 2009, businesses performed 70.5 percent of U.S. R&D. Business R&D performance fell 3.1 percent that year, from $291 billion in 2008 to $282 billion. California businesses performed 23 percent of all U.S. business R&D in 2009, followed by New Jersey (7.1 percent) and Washington (7.1 percent). Read the business R&D InfoBrief...

University R&D Spending

While business R&D declined, the federal government managed to mitigate some of the damage to U.S. R&D activity by increasing spending through the American Recovery and Reinvestment Act of 2009 (ARRA). With ARRA support, American universities increased their R&D spending by 5.8 percent in 2009 and 6.9 percent in 2010. Federal funding was the primary source of university research funds in 2010, with more than half of federal funds provided by the Department of Health and Human Services. The Johns Hopkins University remained the leading institution in R&D spending, followed by the University of Michigan at Ann Arbor and the University of Wisconsin at Madison. Read the university R&D InfoBrief...

Federally-Funded R&D Center Spending

ARRA funding also bolstered R&D spending at federally-funded research centers (FFRDC). Expenditures at these centers increased by 3.5 percent in 2009 and by 10.6 percent in 2010. ARRA funding accounted for 6.6 percent of the $16.8 billion in 2010 FFRDC R&D spending. Basic research activities received 39 percent of 2010 spending, applied research received 31 percent and development received 30 percent. Read the federally-funded R&D center InfoBrief...