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National Science Foundation (NSF) estimates indicate that U.S. spending on research and development (R&D) totaled $368.1 billion (current dollars) in 2007, up from $347.9 billion in 2006 (table 1). This increase represented growth in 2007 of 5.8% over the 2006 level, or 3.1% in inflation-adjusted year 2000 dollars.

This inflation-adjusted (“real”) pace of growth in R&D expenditures outpaced that for gross domestic product (GDP): 2.2% growth in real GDP in 2007, compared with 3.1% for R&D. These 2007 results followed the pattern of the two prior years: 4.4% growth in real R&D expenditures in 2006, compared with 2.9% for real GDP; 4.3% growth in real R&D expenditures in 2005, compared with 3.1% for real GDP.

Total R&D expenditures in 2007 were some $9.1 billion higher in real dollars than in 2006. Nearly all of this increase reflected greater R&D expenditures by industry. NSF’s estimates indicate that the federal government’s overall spending on R&D declined somewhat in real dollar terms in 2007.