Wednesday, August 31, 2016

Businesses Spent $341 Billion on R&D Performed in US in 2014

Businesses spent $341 billion on research and development (R&D) performed in the United States in 2014, a 5.6 percent increase over the previous year, according to a new report from the National Center for Science and Engineering Statistics (NCSES).

Development accounted for the greatest share, 78 percent, of 2014 R&D spending. Applied research accounted for 16 percent, while basic research accounted for 6 percent. The NCSES InfoBrief focuses on business-sector R&D spending. Other sectors, including higher education and federally funded research and development centers (FFRDCs), also contribute to total U.S. R&D spending.

Development accounted for the greatest share of business R&D performance in 2014.

Credit: NSF

Funding from companies' own sources rose by 6.7 percent from 2013 to 2014, totaling $283 billion. Funding from other sources totaled $58 billion. The federal government was the largest of those other sources, accounting for $27 billion, $19 billion of which came from the Department of Defense. Of the federal funding, 92 percent went toward aerospace products and parts; professional, scientific and technical services; and computer and electronic products.

Small- and medium-sized companies performed 16 percent of the nation's business R&D in 2014, while companies with 500 to 24,999 domestic employees performed 48 percent. Companies with 25,000 or more employees made up the other 36%. Businesses that performed or funded R&D employed 21.5 million people in the U.S., 1.5 million of which were R&D employees.

Credit: NSF

Business R&D is concentrated in a relatively small number of states. California alone accounted for 30 percent of the $283 billion in R&D funded by companies' own sources in 2014. Other states with high amounts in the business R&D category were: Massachusetts (6 percent), Michigan (5 percent), Washington (5 percent), Texas (5 percent), Illinois (4 percent), New Jersey (4 percent), New York (4 percent), and Pennsylvania (3 percent).

Companies that performed R&D in the United States in 2014 spent $638 billion on assets with expected useful lives of more than 1 year (table 5). Of this amount, $28 billion (4.4%) was spent on structures, equipment, software, and other assets used for R&D: $17 billion by manufacturers and $10 billion by companies in nonmanufacturing industries. 

Manufacturing industry groups with high levels of capital expenditures on assets used for R&D in 2014 were semiconductor and other electronic products (NAICS 3344) ($3.5 billion), pharmaceuticals and medicines (NAICS 3254) ($2.8 billion), autombiles, bodies, trailers, and parts (NAICS 3361–63) ($1.2 billion), and aerospace products and parts (NAICS 3364) ($1.2 billion). Among the nonmanufacturing industries were software publishers (NAICS 5112) ($1.8 billion), telecommunications services (NAICS 517) ($1.5 billion), and computer systems design and related services (NAICS 5415) ($1.2 billion).

For more information, including R&D performance numbers for all states and a breakdown of spending by different business sectors, read the full InfoBrief.

Contacts and sources:
Rob Margetta

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