U.S. R&D Increased by $72 Billion in 2021 to $789 Billion; Estimate for 2022 Indicates Further Increase to $886 Billion | NSF

1Research and experimental development (R&D) comprise creative and systematic work undertaken in order to increase the stock of knowledge—including knowledge of humankind, culture, and society—and to devise new applications of available knowledge. Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts, without any particular application or use in view. Applied research is original investigation undertaken in order to acquire new knowledge; directed primarily toward a specific, practical aim or objective. Experimental development is systematic work, drawing on knowledge gained from research and practical experience and producing additional knowledge, which is directed to producing new products or processes or to improving existing products or processes. See Organisation for Economic Co-Operation and Development (OECD). 2015. Frascati Manual 2015: Guidelines for Collecting and Reporting Data on Research and Experimental Development. The Measurement of Scientific, Technological and Innovation Activities, OECD Publishing: Paris. Available at https://doi.org/10.1787/9789264239012-en.

2For example, see Mowery DC. 2009. Plus ca change: Industrial R&D in the ‘Third Industrial Revolution.’ Industrial and Corporate Change 18 (1): 1–50 and Arora A, Belenzon S, and Patacconi A. 2018. The Decline of Science in Corporate R&D. Strategic Management Journal 39 (1): 3–32.

3Arora A, Belenzon S, and Sheer L. 2021. Knowledge Spillovers and Corporate Investment in Scientific Research. American Economic Review, 111 (3): 871–898.

4Percentages in this report are calculated based on unrounded data.

5All growth rate calculations are reported using compound annual growth rates unless otherwise noted.

6In this report, dollars adjusted for inflation (i.e., constant dollars) are based on the gross domestic product (GDP) implicit price deflator (currently in 2017 dollars) as published by the Bureau of Economic Analysis (BEA) at https://www.bea.gov/iTable/index_nipa.cfm. Note that GDP deflators are calculated on an economy-wide scale and do not explicitly focus on R&D.

7Inflation measured by the Consumer Price Index (CPI) for 2014–20 ranged between 0.1% and 2.4%. Inflation was 4.7% and 8.0% in 2021 and 2022, respectively (https://www.minneapolisfed.org/about-us/monetary-policy/inflation-calculator/consumer-price-index-1913-). While the CPI is a more commonly known inflation measure, as noted above and in accordance with international standards for R&D reporting, dollars in this report are adjusted for inflation using the GDP implicit price deflator.

8Due to sample variability in the data for the business R&D component, the calculated R&D-to-GDP ratios for 1964, 2009, and 2017 are not significantly different from one another at a 90% confidence level. Additionally, non-U.S. R&D-to-GDP ratios are adjusted for net R&D capital accumulation.

9See Organisation for Economic Co-Operation and Development, OECD Main Science and Technology Indicators Database, September 2023. Available at https://www.oecd.org/sti/msti.htm.

10North American Industry Classification System (NAICS).

11Additional statistics on R&D performed in the United States by the business sector are available at https://ncses.nsf.gov/surveys/annual-business-survey/ and https://ncses.nsf.gov/surveys/business-enterprise-research-development/. See also:
Britt R; National Center for Science and Engineering Statistics (NCSES). 2023. Business R&D Performance in the United States Tops $600 Billion in 2021. NSF 23-350. Alexandria, VA: National Science Foundation. Available at http://ncses.nsf.gov/pubs/nsf23350.
Kindlon A; National Center for Science and Engineering Statistics (NCSES). 2023. Microbusinesses Performed $6.1 Billion of R&D in the United States in 2021. NSF 24-302. Alexandria, VA: National Science Foundation. Available at https://ncses.nsf.gov/pubs/nsf24302.

12The data on higher education R&D reported by National Patterns differ from the underlying survey data in several respects. First, National Patterns translates the Higher Education R&D (HERD) Survey’s primary data in academic fiscal years to calendar year equivalents. Second, National Patterns reports higher education R&D expenditures that are adjusted to remove the double-counting of pass-through funding included in HERD Survey source data. For further details on this topic, see “Technical Notes” at https://ncses.nsf.gov/data-collections/national-patterns/2021-2022#technical-notes.

13The number of FFRDCs reflects that NCSES was informed in June 2021 that the Green Bank Observatory separated from the National Radio Astronomy Observatory in October 2016 to become an independent institution; both retained FFRDC status. The Master Government List of FFRDCs was subsequently updated to reflect this change.

14The most recent data on nonprofit organization R&D come from the FY 2021 Nonprofit Research Activities (NPRA) module of the ABS and the 2016 NPRA Survey. Data for nonprofit organization R&D, 2017–19 are estimated based on the 2016 and 2020 data as revised in the 2021 survey. The availability of NPRA survey data allowed for improved measurement of nonprofit R&D performance over the 2017–22 period, resulting in minor changes to previously published estimates. For 1998–2015, data for nonprofit organization R&D funded by the federal government come from the NCSES annual Survey of Federal Funds for Research and Development; data for that funded by businesses and by the nonprofit sector itself are estimated, based on parameters from the 1996–97 Survey of Research and Development Funding and Performance by Nonprofit Organizations.

15Estimates of the type of R&D by source of funding are based on survey responses for federal funding by type of R&D and modeled using nonfederal funding sources of total R&D and the total nonfederally funded R&D by type. Because of this estimation procedure, comparisons of R&D type by funding source are not supported by statistical testing. National Patterns of R&D uses the general term “estimates” to describe survey estimates, modeled estimates, and projections. Results that combine these techniques are also called estimates because survey estimates are their major component.

16For example, see Arora A, Belenzon S, and Sheer L. 2021. Knowledge Spillovers and Corporate Investment in Scientific Research. American Economic Review 111 (3): 871–898 or Mezzanotti F and Simcoe T; National Bureau of Economic Research. 2023. Research and/or Development? Financial Frictions and Innovation Investment. Working Paper No. 31521.

17For further details on the correspondence between sectors used to measure R&D and those used in the System of National Accounts, please see the Frascati Manual 2015: Guidelines for Collecting and Reporting Data on Research and Experimental Development (https://doi.org/10.1787/9789264239012-en).

18Estimates from the NCSES business and nonprofit organization R&D surveys mentioned are all derived from sample data and thereby contain sampling error. Consequently, estimates of total U.S. R&D also contain sampling error. For more information on this topic and other surveys used in the National Patterns tabulations, see the “Technical Notes” at https://ncses.nsf.gov/data-collections/national-patterns/2021-2022#technical-notes.