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R&D Funding Forecast Predicts Modest Overall Increases, Strong Federal Spending in 2004
February 17, 2004 |Estimated reading time: 2 minutes
Columbus, Ohio — Total R&D expenditures in the United States are expected to increase about 2.5 percent from the $283.8 billion spent in 2003 to nearly $291 billion in 2004, according to the Battelle-R&D Magazine annual funding forecast.
Government funding of scientific research and development will see the largest increase, while industrial support of R&D will increase only slightly in 2004, according to the closely watched forecast.
The forecast, based on data supplied by the National Science Foundation, predicts:
- Federal spending on R&D is expected to be $89.4 billion, representing an increase of 4.8 percent.
- Industrial spending on R&D for 2004 is expected to increase less than a percentage point at 0.85 percent for a total of $181 billion.
- Academia and other non-profit R&D funding is expected to increase an average of 7.6 percent to $20.3 billion.
Industry outlook:
- After adjusting for inflation, the $181 billion that will be spent by the industrial sector is slightly less than what was spent in 2003. This marks the fourth consecutive year of essentially decreases in industrial spending on R&D.
- Industrial support of R&D is marked by an increasing trend to outsource R&D programs and activities to other companies, organizations and offshore facilities.
- The globalization of industry and technology has complicated the task of tracking regional R&D activities.
- A negative balance of trade position in the U.S. and the shifting of its manufacturing base to foreign suppliers will influence the extent to which U.S. industry will support a strong R&D base.
The 2004 forecast marks the 41st year Battelle has issued the funding forecast, and the 25th year, that Battelle's Duga has authored it. Observations include:
- The structure and operations of corporate R&D have undergone many changes. While there continue to be significant central corporate R&D facilities in many companies, others have foregone the central laboratory function in favor of distributed functions that are housed in laboratories that serve individual lines of business.
- The past 10 years have seen an increase in the extent to which industrial R&D has been performed in offshore facilities — some of which are captive while, in more recent times, many of which are independent facilities.
- Industrial R&D also has seen a significant increase in outsourcing to facilities resident in the supply chain, thereby reducing internal risk and capital investment and passing the responsibility to other performers.
Battelle is a global leader in science and technology. It develops and commercializes technology and manages laboratories for government and commercial customers. For more information, visit www.battelle.com.