Federal University R&D Expenditures Continue Steady Decline

Based on the NSF’s “Higher Research and Education Development Survey” (HERD), in FY15, federal funding for science and engineering (S&E) R&D decreased for the fourth straight year. The report surveyed 906 universities and colleges that grant at least a bachelor’s degree and spent a minimum of $150,000 in 2015 on S&E R&D. Although universities’ R&D expenditures in 2015 increased by 2.2% to $68.8 billion, government funding has been on a multiyear decline. Adjusted for inflation, federal funding for academic R&D decreased 1.7% in 2015; in current dollars, government funding for R&D decreased 0.2% to $37.9 billion. In the past five years, federal R&D funding as a share of academic funding has dropped approximately 7%, from 62.5% in 2011 to 55.2% of total university R&D expenditures in 2015.

By department, the Department of Defense, NASA and the Department of Agriculture increased academic R&D outlay in fiscal 2015, while all other federal agencies decreased them, like the Department of Human Health and Services, which declined 1.2% to $20 billion in 2015. Funding from state and local governments also decreased, dropping 1.2% to $3.8 billion.


Non-government funding sources all experienced an increase in expenditures, with institutional funds from universities increasing 5.9% to $16.7 billion in 2015, a 33% increase from 2011. Business R&D investments increased 7.5% in 2015 to reach $4 billion.  As illustrated in the graph below, business R&D funding grew in almost every field, with the largest growth in general life sciences, for which it grew 15.8% in 2015 to $2.3 billion. Business R&D expenditures on biological sciences jumped 12.0% to $408.6 million, while medical sciences and chemistry increased 10.6% and 5.0% to $1.6 billion and $81.7 million, respectively. Spending for environmental sciences fell 12.1% to $127.3 million and agricultural sciences expenditures dropped 1.6% to $147.7 million.


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Nonprofit R&D expenditures for universities grew 6.9% in FY15 to $4.2 billion. Other sources of R&D funding, such as capital from research donors, foreign governments or sponsors, increased 6.4% to $2 billion. Over 75% of funding from outside sources were used as grants, reimbursements or similar types of arrangements. Since 2011, this type of funding has decreased 10.1%, totaling 76.7% of total university R&D expenses in 2015.

University R&D spending for the life sciences field, which includes agricultural sciences, biological sciences and medical sciences, grew 2.3% to $38.8 billion. The majority, or 64%, of R&D expenditures by universities was split between medical sciences, biological sciences and engineering, which received $21.3 billion, $11.7 billion and $11.1 billion, respectively, in 2015. R&D funding for the medical sciences field grew 3.1% in current dollars to $21.3 billion, while agricultural sciences grew 2.2% to $3.5 billion. In the physical sciences, R&D expenditures for chemistry grew 2.0% to $1.8 billion.




The NSF survey also analyzed university R&D disbursements for equipment. The NSF’s definition for research equipment as included in the HERD survey is “payments for movable equipment exceeding the institution’s capitalization threshold, including ancillary costs such as delivery and setup.” As per the definition, general equipment purchases are excluded, as the equipment purchased by the university must be part of a particular research project.

All total R&D expenditures by universities for research equipment from federal and nonfederal sources increased in 2015. Total life sciences R&D expenditures by universities grew 11.3%, which includes a 12.6% increase from public sources and an 8.5% increase from private sources. Total R&D expenditures by universities grew 8.3%, with expenditures from public and private sources rising 12.5% and 2.9%, respectively. Nonfederal total expenditures for R&D equipment also rose 13.0% in 2015, with contributions from public sources increasing 12.6% and private sources increasing contributions by 14.2%.


Total university R&D expenditures for agricultural sciences grew 7.1%, while expenditures for biological and medical sciences increased 7.7% and 8.8%, respectively. Expenditures for all other life sciences rose the most, increasing 59.8%.

By institution, John Hopkins University reported the greatest R&D spending in fiscal 2015 at $2.3 billion, a 2.9% increase, followed by the University of Michigan, Ann Arbor with a 1.5% increase to $1.4 billion, and the University of Washington, Seattle, which rose 0.4% to $1.2 billion. The University of Texas, Austin rounded out the top 30 list with an 11.3% increase in R&D funding to $651 million, knocking Vanderbilt University to 31st place with $648 million. The top 30 institutions represent 41.3% of total academic R&D expenditures.

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