Businesses Spent $375 billion on US R&D Performance in 2016

Author:
National Science Foundation

Date
10/17/2018

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R&D spending increased 5.3 percent from 2015

Businesses spent a total of $375 billion on research and development (R&D) performance in the United States in 2016, an increase of 5.3 percent from 2015. Funding from companies' own sources was $318 billion in 2016, an increase of 7 percent from 2015. Funding from other sources was $57 billion in 2016 and $59 billion in 2015.

Of the $375 billion companies spent on R&D in 2016, $25 billion (7 percent) was spent on basic research, $61 billion (16 percent) on applied research, and $289 billion (77 percent) on development, a similar distribution to spending in 2015.

The federal government was the chief source of external funding for R&D across all industries, accounting for $24 billion of the $57 billion of external funding. Next among external funders were foreign companies ($18 billion) and other U.S. companies ($14 billion).

Most of the federal funding came from the Department of Defense ($16 billion). Of all federal funding, 92 percent went toward aerospace products and parts ($13 billion), professional, scientific and technical services ($5 billion), and computer and electronic products ($4 billion).

Businesses that performed or funded R&D employed 19.3 million people in the United States in 2016. Approximately 1.5 million (8 percent) were R&D employees.

Companies with 250 to 24,999 domestic employees performed 53 percent of the nation's total business R&D. These companies employed 46 percent of those who worked for R&D-performing or R&D-funding companies and employed 54 percent of R&D employees in the United States.

The largest companies (those with 25,000 or more domestic employees) performed 36 percent of the nation's total business R&D. They employed 46 percent of those who worked for R&D-performing or R&D-funding companies and employed 26 percent of R&D employees in the United States.

Micro-, small- and medium-sized companies (those with 5 to 249 domestic employees) performed 11 percent of the nation's total business R&D in 2016. These companies employed 9 percent of employees who worked for R&D-performing or R&D-funding companies and 20 percent of the 1.5 million employees engaged in business R&D in the United States.

U.S. companies that performed or funded R&D reported domestic net sales of $9 trillion in 2016.

Business R&D is concentrated in a relatively small number of states. In 2016, businesses in California accounted for 33 percent of companies' R&D spending. States with the next highest amounts of R&D spending were Washington and Massachusetts, each with 6 percent of R&D spending, and Michigan and Texas, each with 5 percent.

EurekAlert!, the online, global news service operated by AAAS, the science society: https://www.eurekalert.org/pub_releases/2018-10/nsf-bs101618.php

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