The latest data from the National Science Foundation show that after stagnating in the early part of the decade, total U.S. R&D grew in real terms in 2007 for the fifth year in a row to reach a new high of $368 billion. U.S. R&D (federal, industry, and other funding sources) grew 6 percent between 2006 and 2007, buoyed especially by increases in industry support of R&D. Federal support of R&D, however, failed to keep pace with inflation. Because total R&D once again grew faster than the U.S. economy as a whole, the U.S. R&D / GDP ratio climbed for the third year in a row in 2007 to 2.66 percent.
- August 28, 2008
AAAS does not collect data on R&D funded by industry. Data on industrial R&D as part of the total U.S. R&D effort can be found in the next section, below. Detailed surveys of industrial R&D are compiled by the National Science Foundation’s Division of Science Resources Statistics . Please refer to their publications R&D in Industry  and National Patterns of R&D Resources .
The chart below shows that U.S. industrial firms’ support of R&D has increased over the past decade but has flattened out over the past few years. Industry’s support of R&D is heavily concentrated in development, with far smaller investments in applied research and even smaller investments in basic research. Over the past decade, industry support of development has expanded the fastest, while basic research has barely kept pace with inflation. The second chart shows that the largest R&D-performing industries are motor vehicles, pharmaceuticals, software, and IT/electronics. Much of the recent growth in industrial R&D has been in service industries; nonmanufacturing R&D now accounts for 30 percent of all industry R&D.
Detailed surveys of the total U.S. R&D effort (federal, state, industry, nonprofits, and others) are compiled by the National Science Foundation’s Division of Science Resources Statistics . Please refer to their publications Science and Engineering Indicators and National Patterns of R&D Resources .
The first table shows that total U.S. R&D in 2007 is estimated at $368 billion, a $20 billion or 6 percent increase over 2006. Two-thirds of this total was funded by private industry.
Table. Total U.S. R&D, 2005-2007  (9/08)
As shown in the chart below, total U.S. R&D has expanded dramatically in the past four decades. In recent years, total U.S. R&D increased in the 1990s because of substantial increases in R&D funding from industry; this decade, U.S. R&D leveled off at first but has increased in real terms for five years in a row to 2007. The chart shows that industry has consistently expanded its share of total U.S. R&D; as recently as 1970, industry funded a third of U.S. R&D; now, it funds two-thirds.
The chart below shows U.S. R&D by performer. As performers, industry is even more dominant. Not only does it perform nearly all of the R&D it funds, industry is also a major performer of R&D with federal funds. 72 percent of U.S. R&D is performed by industry.
In 2005, 2006, and 2007, total R&D grew faster than growth in the U.S. economy as a whole as measured by the Gross Domestic Product (GDP). NSF estimates that total U.S. R&D grew to 2.66 percent of GDP in 2007, down from a recent high of 2.74% in 2001 but up for the third year in a row.
Chart. U.S. R&D as Percent of Gross Domestic Product, 1953-2007  (8/08) – Data Table 
Total U.S. basic research has grown steadily over the past decade, as shown in the chart below, led by steady increases in federal support for biomedical basic research in the NIH; growth in federal support accelerated beginning in 1998 with the five-year campaign to double the NIH budget. Industry and other support for basic research, meanwhile, barely kept pace with inflation.
Chart. U.S. Basic Research by Funding Source, 1991-2007  (9/08) – Data Table