Of the $290.7 billion spent in 2008 on business R&D, $232.5 billion was paid for by the companies themselves (own R&D expense). These expenditures reflect company priorities and strategies and are not controlled directly by customers or business partners. The remainder of this Infobrief reports on companies' own R&D expense.
Application Areas of Company R&D
BRDIS collected information on the following five application areas, listed here in order of most to least funds spent on R&D by companies themselves.
Companies classified by BRDIS as being in the pharmaceuticals and medicines industry accounted for two-thirds ($44.4 billion) of the health or medical R&D performed by businesses in 2008 ( However, almost all (98%) of the R&D reported in the pharmaceuticals and medicines industry was for health or medical applications, indicating that pharmaceutical companies tend not to diversify into lines of business with nonmedical applications. In contrast, over one-third of the R&D performed by companies classified in the electromedical apparatus industry went toward applications other than health or medical.
TABLE 1. R&D performed and paid for by companies in the United States, by application area and selected industry: 2008 (Millions of U.S. dollars)
Internet service providers/Web search/data processing services, 518
Professional/scientific/technical services, 54
Architectural/engineering/related services, 5413
Computer systems design and related services, 5415
Scientific research and development services, 5417
Health care services, 621–23
Nonmanufacturing nec, other 21–23, 42–81
D = data withheld to avoid disclosing operations of individual companies; * = amount < $500,000.
NAICS = North American Industry Classification System; nec = not elsewhere classified.
NOTES: The application area totals are not additive, mutually exclusive, or exhaustive. The same R&D could be reported in multiple application areas, and some R&D is not included in any of the five application areas listed in the table. Detail within application areas may not add to total because of rounding. Industry classification was based on dominant business code for domestic R&D performance where available. For companies that did not report business codes, classification used for sampling was assigned.
SOURCE: National Science Foundation/National Center for Science and Engineering Statistics, Business R&D and Innovation Survey, 2008.
Although most of the R&D with health or medical applications is conducted by companies classified as being in manufacturing industries, several nonmanufacturing industries perform sizeable amounts of health or medical R&D. The scientific R&D services industry, which includes many biotechnology companies as well as contract research organizations, performed $5.6 billion of R&D with health or medical applications in 2008. In addition, companies in the software publishers industry and the computer systems design and related services industry performed a total of $2.9 billion of R&D with health or medical applications.
R&D with energy applications was less concentrated by industry than was R&D with health or medical applications. The two industries estimated to have performed the most R&D with energy applications in 2008 ($3.0 billion each) were the automobile/bodies/trailers/parts industry and the semiconductor and other electronic components industry (table 1)
As noted earlier, the majority of defense-related R&D in the business sector is directly paid for by the federal government, but companies themselves paid for and performed $9.7 billion of R&D that had defense applications. Most of this R&D with defense applications is performed by companies classified in the computer and electronic products or aerospace industries. Although this R&D is not paid for directly by the federal government, many defense-oriented companies are able to recoup a portion of their own R&D expense from future government contracts.
Environmental Protection Applications
Three industries performed over $1 billion of R&D with environmental protection applications in 2008: the machinery industry, the automobile/bodies/trailers/parts industry, and computer and electronic products. The machinery industry—which includes manufacturers of heating and air conditioning equipment; air purification/scrubbing equipment; and steam, hydraulic, gas, and wind turbines—accounted for one-quarter of all business environmental protection R&D. The automobile/bodies/trailers/parts industry, which faces the possibility of stricter emissions requirements in the future, devoted 9% of its R&D to environmental protection applications. Computer and electronic products devoted 2% of its R&D to environmental protection applications. Of the remaining industries, the soap/cleaning compound/toilet preparation industry and the electrical equipment/appliances/components industry each had environmental protection applications account for more than 10% of their total U.S. R&D performance.
Companies performed $3.9 billion of R&D with agricultural applications in 2008. The chemicals industry and the agricultural implements industry accounted for about one-half of this agricultural application R&D.
Data Sources and Limitations
The sample for BRDIS was selected to represent all for-profit companies with five or more domestic employees, publicly or privately held, that perform or fund R&D or engage in innovative activities in the United States. For 2008 a total of 39,553 companies were sampled, representing 1,926,012 companies in the population. Because the statistics from the survey are based on a sample, they are subject to both sampling and nonsampling errors.
The BRDIS questionnaire asked companies to report the percentage of their R&D that supported five specific application areas (health and medical, defense, energy, environmental protection, and agriculture). If a company's R&D supported multiple applications, it could be reported in more than one application area; that is, the application areas are not mutually exclusive. Further, companies could have R&D that supported application areas other than those asked on the survey; that is, the application areas are not exhaustive.
For an overview of worldwide R&D data collected by BRDIS see the following InfoBrief from the National Center for Science and Engineering Statistics: Business R&D Performed in the United States Cost $291 Billion in 2008 and $282 Billion in 2009 (NSF 12-309) at /statistics/infbrief/nsf12309/. Detailed tables for the 2008 and 2009 BRDIS are forthcoming and will be available at /statistics/industry/. Individual tables may be available in advance of publication of the full report.
National Science Foundation, National Center for Science and Engineering Statistics Health and Defense Applications Account for 40% of Business R&D in the United States
Arlington, VA (NSF 12-329) [August 2012]