U.S. R&D: Slow Growth and Opportunities
The U.S. economy grew in 2016, albeit slowly. U.S. GDP is only forecast to grow 1.6% in 2016, consider- ably below the robust 2.6% growth in 2015, according to the International Monetary Fund (IMF). However,
U.S. GDP is expected to rebound a small amount in 2017
to 2.3%. How much a country invests in R&D is loosely
linked to that country’s economy. For 2017, President-elect
Donald Trump’s policies are added factors that also could
affect overall R&D investments. Few of those policies will be
able to have much of an impact on early 2017 R&D investments due to the momentum of ongoing R&D created in
2016, but some Trump programs could affect R&D spending by mid- to late-2017.
President-elect Trump is likely to put many of his programs in place within his first 100 days in office (January 20,
2017 to April 30, 2017). Some of those early programs affecting R&D operations and investments include 1) the scale-back of some parts of the H-1B visa
program; 2) refocusing of some NASA
space programs (decisions on Mars,
asteroid and Moon astronaut landings,
climate change); 3) repealing of the
Net Neutrality Act; 4) implementation
of a one-time repatriation of corporate
profits being held overseas; 5) injection
of free-market policies into healthcare
systems; and 6) an overall review and
reinforcement of cyber security policies.
For 2017, total U.S. R&D spending is expected to increase by 2.9% to
$527.5 billion or a 1% increase after
accounting for 2017’s expected 1.9%
inflation rate (EIU/OECD). The 2017
R&D growth forecast is down slightly
from the 3.1% growth seen in 2016
over the R&D spent in 2015. This is
the fourth consecutive year of R&D
spending growth, following flat R&D
growth during the recession and reces-sion/recovery years.
Factors Influencing U.S. R&D Outlook
There are many factors that affect a country’s investment
on R&D. Some of these factors (both positive and negative)
that have influenced the 2017 U.S. R&D outlook include:
• The data revealing researcher interests and plans in this
report reflect researcher attitudes and recollections dur-
ing the summer of 2016—prior to the U.S. presidential
election. The election results and comments made since
then are unlikely to have any substantive effect due to
their highly speculative nature.
• The global economy is in a continued slowdown,
including that of China, which is now forecast to grow
about 6.2% in 2017, its slowest annual growth since
1990 when its GDP was about $400 billion.
• Some of the post-Presidential election polls on economic
growth have shown a slight improvement in both U.S.
and global economic growth for 2017 and 2018 from
similar forecasts provided before the U.S. presidential
election. The head of one of these polls, the Organization for Economic Cooperation and Development
(OECD), stated in the release of their report that the
global economy could be at an “inflection point” with
these latest growth forecasts.
• There have been record-high stock market valuations
following the U.S. Presidential election which produces
more monies available for R&D investments.
2017 U.S. Source-Performer Matrix
Billions, US$/Percent changes from 2016
Gov’t Industry Academia FFRDC (Gov’t) Non- Profit Total
$336.8 $5.2 $3.6 $2.1 $347.7
2.6% 4.0% 23.3% 5.0% 2.7%
Academia $19.0 $0.3 $19.3
5.6% 0.0% 5.5%
$5.5 $0.1 $14.7 $20.3
10.0% 0.0% 2.1% 4.1%
Total $43.2 $366.8 $75.2 $19.5 $22.8 $527.5
0.5% 2.6% 3.7% 6.0% 0.4% 2.9%
There are numerous
indications that the U.S.
economy will expand in
2017 and possibly beyond.