Higher Education Spending on Research & Development

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Research institutions are a key ingredient to innovation and long-term economic growth, and the United States has a long history of being a global leader.

  • According to the National Science Foundation, universities spent $67.2 billion on research and development, or R&D, across all fields in the 2013 fiscal year.
  • Higher education R&D spending is funded by a variety of sources, the largest of which is the federal government--which funded 59 percent of spending in 2013--followed by funding from the institutions themselves--which equaled 22 percent. State and local government spending made up 5.5 percent of total R&D spending.
  • Across the U.S., higher education R&D funding grew by 21.6 percent from 2004 to 2013 when adjusted for inflation.
  • On a state-by-state basis, higher education R&D funding increased in all but nine states from 20014 to 2013 (when adjusted for inflation). Of those nine states, Nevada’s universities had the biggest drop--falling by 24.5 percent--followed by Maine (down 15.4 percent) and Vermont (down 15.3 percent).
  • On the other side of the coin, funding in Rhode Island nearly doubled--growing by 82.8 percent from 2004 to 2013. South Dakota had the second highest growth rate (61.2 percent) and North Carolina had the third highest (49.3 percent).

Federal Spending

  • Disregarding the bump in spending from the American Recovery and Reinvestment Act, federal dollars have remained pretty stable as a percentage of overall R&D funding for the past 10 years.
  • Federal funding for R&D varies wildly, however, from state to state, as a percentage of total R&D funding. For example, in North Dakota and Arkansas federal spending makes up less than 40 percent of total R&D funding, while in Maryland and Wyoming federal spending equals more than three-quarters of higher education R&D expenditures.
  • The U.S. Department of Health and Human Services, including the National Institutes of Health, is the biggest player, providing 54 percent—or $21.2 billion—of total federal funding going to higher education institutions for R&D purposes.

State and Local Government Spending

  • State and local governments funded 5.5 percent of higher education R&D spending in 2013 and have remained a fairly stable source over the past decade.
  • The proportion of state and local spending as a share of total higher education R&D varied significantly by state in 2013, with those sources ranging from less than one percent of funding in New Hampshire, Massachusetts and Vermont up to 21.3 percent in Arkansas and 25.4 percent in North Dakota.

Institution-Level Spending

  • Institution-funded R&D grew quickly in 2013--by 9.8 percent to almost $15 billion--continuing a general pattern of growth that has been occurring since the 1960s.
  • Institution funds made up about 22 percent of total R&D in 2013, growing from less than 10 percent before 1968 and from 18 percent in 2004.
  • Institution-funded R&D ranges from 2.5 percent in Wyoming and 9.4 percent in Colorado to 42.1 percent in Nebraska and 44.7 percent in Rhode Island.

Source: National Science Foundation, Higher Education Research and Development Survey--Reported totals from 891 degree-granting institutions that spent at least $150,000 in R&D in the previous fiscal year.
 

 

Higher Education Spending on Research & Development