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News Release 99-043

U.S. Industry Driving the Growth in Research & Development Spending

June 14, 1999

This material is available primarily for archival purposes. Telephone numbers or other contact information may be out of date; please see current contact information at media contacts.

Research and development (R&D) spending in the United States reached an estimated $220.6 billion in 1998, says a new National Science Foundation (NSF) report.

However, the report says, industry, not government, is responsible for most of the inflation-adjusted 5.3 percent increase over the estimated $205.6 billion spent on R&D in 1997.

Industry has provided the largest share of financial support for R&D in the U.S. since 1980, said Steven Payson, author of the NSF Division of Science Resources Studies (Special Report), National Patterns of R&D Resources: 1998.

Preliminary 1998 estimates show industry R&D spending increased in real terms 7.7 percent over 1997 to $143.7 billion, or 65.1 percent of the total. Federal support increased 0.8 percent to $66.6 billion, for a record low of 30.2 percent of the total.

"Nearly all ($140.8 billion) of the industry R&D funds will be devoted to R&D performed by industry itself, with the remainder directed toward academic R&D ($1.8 billion) and R&D performed by other nonprofit organizations ($1.0 billion)," Payson said.

Industry, including industry-administered federally funded research and development centers (FFRDCs), is expected to perform 75.1 percent of the nation’s total R&D in 1998. Of this, 85 percent will come from industry’s own funds; federal funding will account for the remaining 15 percent (down from an all-time high of 32 percent in 1987).

Most R&D spending (61.8 percent, or $136.4 billion) is for development. Applied research accounts for 22.6 percent, or $49.8 billion; basic research for 15.6 percent, or $34.4 billion.

Other highlights of the special report:

  • The 1998 expected U.S. ratio of R&D to Gross Domestic Product of 2.61 percent is the highest since 1992.
  • Total R&D is substantially concentrated in a small number of states. In 1995, the most recent year for which figures are available, the six states with the highest levels of R&D expenditures were, in descending order, California, Michigan, New York, Massachusetts, New Jersey and Texas. They accounted for about half the national R&D total.
  • The highest ratios of R&D to Gross State Product in 1995, in descending order, were in New Mexico, the District of Columbia, Michigan, Massachusetts, Maryland, Delaware, California, Connecticut, Rhode Island, and Washington.
  • Defense-related R&D spending fell to 16.4 percent of the national (federal plus non-federal) total in 1998, down from a high of 31.8 percent in 1987.


Editors: For the report see:

Media Contacts
Joel Blumenthal, NSF, (703) 292-8070, email:

Program Contacts
Steven Payson, NSF, (703) 306-1772, email:

The National Science Foundation (NSF) is an independent federal agency that supports fundamental research and education across all fields of science and engineering. In fiscal year (FY) 2019, its budget is $8.1 billion. NSF funds reach all 50 states through grants to nearly 2,000 colleges, universities and other institutions. Each year, NSF receives more than 50,000 competitive proposals for funding and makes about 12,000 new funding awards.

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