the total amount of funding, 22.7% comes from the federal government, about 69% of R&D is done by industry,

and less than 4% is done by universities and colleges. (The percentages below do not add up to exactly 100%

due to rounding.)

Sources of R&D Funding Amount ($ billions) Percent of the Total

Federal government

Industry

Universities and colleges

Nonprofits

Nonfederal government

Total

$129.6

$426.0

$20.7

$25.0

$4.8

$606.1

21.4%

70.3%

3.4%

4.1%

0.8%

TABLE 13.3 U.S. Research and Development Expenditures, 2018

(Source: https://ncses.nsf.gov/pubs/nsf21324)

In the 1960s the federal government paid for about two-thirds of the nation’s R&D. Over time, the U.S. economy

has come to rely much more heavily on industry-funded R&D. The federal government has tried to focus its

direct R&D spending on areas where private firms are not as active. One difficulty with direct government
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