Reduced Federal

funding in 1993

caused an overall

decline in U.S.

industrial R&D, to

$118.3 billion.

Science Resources Studies Division

DATA BRIEF

Directorate for

Social, Behavioral

and Economic

Sciences

National Science Foundation

by Raymond M.

Wolfe

Vol. 1995, No. 10, August 4, 1995

Electronic

Dissemination

SRS data are available through

the World Wide Web (http://

www.nsf.gov/sbe/srs/stats.htm)

and also through STIS, NSF’s

online Science and Technology

Information System, described

in NSF flyer 95-64, “Getting NSF

Information and Publications.”

For a paper copy of the flyer,

call 703-306-1130. For an electronic copy of the STIS User's

Guide, send an e-mail with the

phrase "get NSF9410.TXT" to

stisserv@nsf.gov. For NSF’s

Telephonic Device for the Deaf,

dial 703-306-0090.

1993 Spending Falls for U.S. Industrial

R&D, Nonmanufacturing Share Increases

T

he National Science Foundation’s latest

Survey of Industrial Research and Development shows that firms spent $118.3 billion on

research and development (R&D) in the United

States during 1993, 1 percent less than during

1992. The 8-percent decline in Federal funding,

from $24.7 billion to $22.8 billion, more than

offset the 1-percent increase in R&D funding

from company and other nonfederal sources,

from $94.4 billion to $95.5 billion. Adjusted for

inflation, funds from both sources dropped,

Federal by 10 percent and nonfederal by 1

percent, resulting in a 3-percent constant-dollar

decrease in total R&D.

Sources of R&D Support

Federal support as a share of total industrial

R&D continued to decline from its recent peak

of 33 percent in 1987 to 21 percent in 1992 and

to 19 percent in 1993. Among specific manufacturing industries, Federal support increased for

R&D performed by petroleum extractors and refiners, drug and medicine manufacturers, and

makers of professional and scientific instruments. The share of total R&D supported by

Federal funds for the first two groups increased

but remained below 1 percent; the Federal share

increased from 23 percent to 27 percent for makers of professional and scientific instruments.

Manufacturers of drugs and medicines, electrical

and transportation equipment, and professional

and scientific instruments performed more company-financed R&D, whereas petroleum extractors and refiners and machinery manufacturers

performed less during 1993 than they did during

1992. The share of total R&D supported by

Federal funds to electrical equipment manufacturers decreased from 29 percent to 11 percent;

from 41 percent to 38 percent for transportation

equipment manufacturers; and from 7 percent to

1 percent for machinery manufacturers. For

nonmanufacturers the share of total R&D supported by Federal funds decreased from 19 percent to 18 percent. Table 1 gives summary statistics from the 1993 survey and compares them

with revised statistics for 1992.

Survey Changes

NSF’s Survey of Industrial R&D has been conducted annually since 1954. During the early

years the focus of the survey was on manufacturing industries, in which R&D performance was

heavily concentrated. Beginning in the early

1970s, the need for more detailed information on

the R&D performed by firms in the nonmanufacturing sector was recognized, and the survey

gradually has been changed to collect more detailed statistics for this sector. The latest

changes, put into place for the 1992 survey, included the addition of 25 new industries from the

nonmanufacturing sector and more small firms

from both sectors to the survey. The previous

Data Brief in this series (NSF 94-317) and the

report Research and Development in Industry:

1992 (NSF 95-324) discuss these survey changes

and their impact on the statistics.

Nonmanufacturing R&D Trends

The trend of U.S. business toward services and

other nonmanufacturing activities is well known.

The NSF survey provides statistical evidence that

increasing levels of R&D also are being performed by nonmanufacturing firms. During

1963-93 the share of R&D grew substantially.

Estimates from the 1963 survey show that only 2

percent of R&D was conducted by nonmanufacturing firms. The share increased to 3 percent

for 1973, 5 percent for 1983, and 11 percent for

1988. During the next 5 years, the reported

share more than doubled, to 26 percent for 1993,

although part of the increase may have resulted

from the NSF survey’s sample redesign. For the

first two decades of the period, 1963-83, the

inflation-adjusted annual rate of increase in the

amount of R&D performed by nonmanufacturing firms was 7 percent; for the last decade,

1984-93, the annual rate was 19 percent.

It is difficult to determine precisely how much of

this expansion resulted from changes in the R&D

activity of firms that have remained within the

nonmanufacturing sector and how much resulted

from movement of firms formerly classified as

manufacturers into the nonmanufacturing

classifications. By comparing sales (not shown

here) and R&D figures from the 1993 survey

with those from the 1992 survey, it appears that

an undetermined number of firms shifted out of

the industry classifications for machinery, which

include manufacturers of office, computing, and
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accounting machines, and into services. Consistent

with this shift, reported R&D for machine manufacturing firms dropped from $15 billion for 1992

to $8 billion for 1993.

Further revisions to the survey’s sample design are

planned using knowledge gained from the 1992 and

1993 surveys. While maintaining and possibly

expanding the level of detail available for manufacturers, the survey will continue to be strengthened

and refined to capture more information on the

R&D performance by the increasingly important

nonmanufacturing industries.

This Data Brief is the first publication of statistics

and information from the 1993 Survey of Industrial

Research and Development. The annual report,

Research and Development in Industry: 1993, will

contain the full data set (approximately 50 tables)

available from the survey. While the annual report

is being prepared, a selected data set (18 tables) is

available from the address below. Both the selected

data tables and the annual report will present

statistics by industry and by size of company on the

sources of funds for and character of industrial

R&D; historical trends in R&D; R&D as a percent

of sales; R&D contracted out and performed

outside the United States; sales and total employment of R&D-performing companies; and employment and cost of R&D scientists and engineers.

The annual report also will present statistics on

total R&D by State, type, and size of R&D

program as well as technical information on the

survey sample and processing and additional

analysis of the statistics.

For free printed copies of SRS Data Briefs or to be

placed on the mailing list for a free copy of the

annual report, write to the National Science

Foundation, Division of Science Resources Studies,

Table 1. Funds for industrial R&D, by source, industry, and

size of company: 1992-93

(703) 306-1773; or send an e-mail

request to databrief@nsf.gov.

4201 Wilson Boulevard, Suite 965,

Arlington, VA 22230; call

Source of funds, industry, and size of 

company

1992 1993

Percent 

change 

1992-93

1992 1993

Percent 

change 

1992-93

Millions of current dollars Millions of 1987 dollars

 Total.......................................................... 119,110 118,334 -0.7 98,519 95,817 -2.7

By source and performing industry:

 Company and other non-Federal, total...................... 94,388 95,521 1.2 78,071 77,345 -0.9

 Drugs and medicines........................................7,934 9,133 15.1 6,562 7,395 12.7

 Petroleum refining and extraction.......................... 2,268 2,103 -7.3 1,876 1,703 -9.2

 Machinery (including computers)......................... 13,903 8,182 -41.1 11,500 6,625 -42.4

 Electrical equipment................................................ 9,516 11,285 18.6 7,871 9,138 16.1

 Transportation equipment...................................... 16,292 17,063 4.7 13,476 13,816 2.5

 Professional/scientific instruments....................... 7,321 7,521 2.7 6,055 6,090 0.6

 Nonmanufacturing industries................................ 23,363 25,538 9.3 19,324 20,679 7.0

 Federal, total................................................................ 24,722 22,813 -7.7 20,448 18,472 -9.7

 Drugs and medicines......................................... 11 15 36.4 9 12 33.5

 Petroleum refining and extraction.......................... 9 14 55.6 7 11 52.3

 Machinery (including computers)......................... 1,035 88 -91.5 856 71 -91.7

 Electrical equipment............................................... 3,844 1,402 -63.5 3,179 1,135 -64.3

 Transportation equipment................................................ 11,202 10,438 -6.8 9,266 8,452 -8.8

 Professional/scientific instruments....................... 2,221 2,767 24.6 1,837 2,240 22.0

 Nonmanufacturing industries................................ 5,570 5,784 3.8 4,607 4,683 1.7

By size of company:

 Fewer than 500 employees........................................................ 13,557 15,481 14.2 11,213 12,535 11.8

 500 to 999 employees................................................................. 7,958 3,198 -59.8 6,582 2,589 -60.7

 1,000 to 4,999 employees........................................................... 11,886 13,277 11.7 9,831 10,751 9.4

 5,000 to 9,999 employees........................................................... 8,258 9,023 9.3 6,830 7,306 7.0

 10,000 to 24,999 employees....................................................... 15,744 15,105 -4.1 13,022 12,231 -6.1

 25,000 or more employees.......................................................... 61,707 62,250 0.9 51,040 50,405 -1.2

SOURCE: National Science Foundation/SRS, Survey of Industrial Research and Development