US businesses spent $375 billion on R&D in 2016, says report

While funding from companies' own sources rose 7 per cent to $318 billion in 2016, funding from other sources was lower at $57 billion in 2016 against $59 billion in 2015, says the report.

Of the $375 billion companies spent on R&D in 2016, $25 billion (7 per cent) was spent on basic research, $61 billion (16 per cent) on applied research, and $289 billion (77 per cent) on development, a pattern similar to the distribution of 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 US companies ($14 billion).

Most of the federal funding came from the Department of Defence ($16 billion). Of all federal funding, 92 per cent 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 per cent) were R&D employees.

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

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

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

US 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 per cent of companies' R&D spending. States with the next highest amounts of R&D spending were Washington and Massachusetts, each with 6 per cent of R&D spending, and Michigan and Texas, each with 5 per cent.

The findings were reported by the Business R&D and Innovation Survey (BRDIS), a study cosponsored by the National Center for Science and Engineering Statistics (NCSES) within the National Science Foundation (NSF) and the US Census Bureau.

The 2016 BRDIS cycle will be the survey's final cycle in its current form. NCSES and the U.S. Census Bureau are undertaking a separate, more comprehensive collection of data on business innovation activities to be included in the Annual Business Survey they cosponsor. For 2017 and beyond, BRDIS will become the new Business Research and Development Survey (BRDS).