- Restructuring of the major corporate R&D approaches in industry
- Significant growth of the practice of off-shore out-sourcing of R&D
- Shift in federal government priorities as a result of world events
- Growth of the federal deficit.
"There is little doubt that there are some basic problems facing the U.S. research environment, not the least of which include consideration of energy, environment, and the economy," said Battelle Senior Researcher and study co-author Jules Duga.
"And to a degree not seen in recent years, the average person on the street is calling for long-term relief from high energy costs, improved (but non-intrusive) security, and resolution of environmental problems," Duga said.
Funding by sector
- The federal government is expected to spend $25.2 billion funding R&D efforts in 2008, a 1.16 percent increase over the $24.9 billion spent in 2007
- Industrial investments in R&D are expected to reach $258.7 billion in 2008, an increase of 3.4 percent over 2007 levels of $250.3 billion
- Academia and other non-profits are expected to expend $70.5 billion on R&D in 2008. Academia is forecasted to increase by 5.3 percent from $51.9 billion in 2007 to $54.6 billion in 2008. Non-profit expenditures on R&D are expected to increase by 4.3 percent from $15.3 billion in 2007 to $16 billion in 2008
- Federally Funded Research & Development Centers (FFRDC) is a new category to the annual R&D Forecast. The 36 centers are established by various government agencies and are designed to carry out special long-term research programs on behalf of their parent agencies. Funding for 2007 was $12.7 billion which is expected to drop by 2.3 percent to $12.4 percent in 2008.
Federal Outlook
Federal support has continued to grow in absolute terms although still lags behind the rapidly growing industrial support. According to federal budget analysis performed by the American Association for the Advancement of Science (AAAS), the following funding issues are in play:
- Department of Defense: Overall R&D funding is essentially flat and with a decline of .5 percent or $414 million. However, an additional war supplemental currently before Congress will likely include an additional $3.9 billion for development R&D, which would ultimately provide a 3.2 percent increase over FY 2007. Air Force and Army will see increases while Navy will decline
- Department of Homeland Security will see a 9 percent increase
- National Institutes of Health (NIH) increased its R&D budget by less than 1 percent, or $245 million, to $29.5 billion with increases seen for the National Institute of Allergy and Infectious Disease (NIAID) and the National Cancer Institute (NCI)
- Department of Energy: Increase by 7.4 percent largely in the area of renewable energy and energy efficiency technology development
- The American Competitiveness Initiative is expected to have impact in greater funding of the physical sciences and STEM (science, technology, engineering and math) educational programs designed to create a broader and deeper teaching of these disciplines throughout the federal government and educational system.
Industrial Outlook
- Because of the dominance of industrial funding as a source for the overall R&D enterprise, it is particularly important to pay special attention to industrial attitudes and practices
- Offshore outsourcing has become a complex weave of relationships, facilities, practices, opportunities and threats, that is changing the manner in which technical services are provided
- Every indication is that the move toward off-shore outsourcing will continue and grow over the next few years
- According to data from Schonfeld & Associates, the following major industries will see significant increases in R&D support: Biological and Diagnostics, Pharmaceutical Preps, and Chemicals and Allied Products Declining R&D support will be felt in industries such as Motor Vehicles and Car Bodies, Electronic Measuring and Testing Instruments, Other Electronics, and Agricultural Chemicals.
