R&D: Industry Leaves Government In The Dust

Backyard inventors make better headlines, but the true engines of discovery in the U.S. are its industrial, government, and academic labs. The flow of money into these research and development centers has never been greater. This year, a record $277.5 billion will pour into labs' coffers, 5.1% more than in 2000, according to a study by the Battelle Memorial Institute, a nonprofit research organization based in Columbus, Ohio, in cooperation with R&D Magazine.

R&D: Industry Leaves Government in the Dust

Just 20 years ago, industrial and federal investment in R&D were on a par. Industry outlays have since more than tripled in real terms, to more than $190 billion. Meanwhile, federal R&D funding has grown much more slowly, increasing by just 28% in real terms since 1981, for a grand total of $72.1 billion this year.

Critics may worry that the soaring importance of industry-funded R&D hurts the pursuit of pure science. But Jules J. Duga, a senior analyst and author of the study at Battelle, disagrees. "Industry does more basic research than it's given credit for," he says. In addition, as the ongoing flood of data from the Human Genome Project shows, the federal government is becoming adept at publishing its findings. "That shift allows for faster commercialization of new discoveries," says Duga.

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