The U.S. research ship is righting itself after going through some stormy seas, according to data from the National Science Foundation (NSF). But the latest picture of overall R&D spending in the United States shows two divergent trends: High-tech companies are steaming ahead after rebounding from the 2008 recession, while the end of the massive stimulus spending begun in 2009 has left academic researchers facing increasingly choppy waters.
The new NSF report released in late December, which updates a report from January 2013, documents a 5% boost in overall spending in 2011, to $428 billion. Preliminary data suggest 2012 will be even better: a jump of 5.7%, to $452 billion. Those annual increases are well ahead of the 4% growth in the country’s gross domestic product (GDP) in each of those years. They also mark a significant turnaround from 2009 and 2010, when both R&D and GDP struggled to stay above water.
The good news, says NSF program analyst Mark Boroush, is that the numbers suggest a return to historical patterns in which the country’s total R&D investment grew at a faster rate than GDP. That was the case in 6 of the 8 years before the 2008 recession, he notes. Boroush says that metric is a good indicator of the health of a country’s overall research enterprise.
U.S. industry performs roughly 70% of the country’s R&D. (It funds a similar percentage.) So its behavior drives the overall U.S. research enterprise. The federal government provides most of the rest of the money, although the dollars are distributed almost equally between scientists at federal facilities and those working in academia.
“We saw a pullback in 2009 and 2010 in industrial R&D,” he says, with spending tumbling in both years. “But it appears we have a rebirth going on, with 2012 as the most solid year” for high-tech companies since 2007.
Spending patterns for the academic sector are a mirror image of those in the industrial sector. Robust increases in 2009 and 2010 were fueled by the Obama administration’s stimulus package, and the line continued to tick upward in 2011. But NSF preliminary data suggest no growth in 2012, and Boroush expects the toll from the budget cuts known as sequestration, which took effect last March, to show up in NSF’s next report. “I think we may be back to a very sober picture in 2013,” he says.
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When adjusted for inflation, the data for R&D spending at colleges and universities are even more dismal. Annual growth rates of 4.6% in 2009 and 2010 shrunk to 1.3% in 2010 and 2011, according to the NSF data. And the rate is expected to go negative, by 1.3%, in 2012.
The latest report added $14 billion to the 2011 U.S. total reported a year ago, which had represented an anemic growth of 1.8%. The new figures, Boroush says, clarify what had been a murky picture of the country’s recovery from the recession. They “reversed the dynamics for 2011,” he notes. In combination with the preliminary 2012 data, it also adds a second year of robust growth.
Most of the plus-up comes from an additional $10.3 billion in industry spending. NSF revamped its survey of business R&D in 2008, and Boroush says that each year the foundation gets better at interpreting the answers to a key question about what companies expect to spend on R&D in the coming year.
“The look ahead is a preliminary estimate,” he says, “not a forecast. And we’re reasonably confident that it will hold up.” The final answer comes later this year, when NSF’s next report on national R&D spending patterns tallies up the 2012 numbers—and takes its first shot at describing 2013.