• Restrictions on federal spending from earlier sequestration spending programs are continuing. The presidential election results had no effect on these laws.
• Throughout 2016, the Federal Reserve Bank has
continued its hesitance to enact additional short-term interest rate hikes, although there are signs at the time of
this writing that these rates will be increased at the Fed’s
December 2016 meeting. The rate increase, if it occurs,
is still expected to be relatively minor—likely equal to
the rate imposed in 2015. The Fed’s hesitance in putting
these rate increases in place has been to minimize their
effect on slowing potential economic growth.
• The U.S. dollar has seen continued strong growth.
The resultant effects of a strong dollar is to lower trade
(U.S.-produced products are more expensive in foreign
markets) and the interest paid on foreign debt is more
expensive, which is especially troublesome for smaller
countries with large
long-term debts tied
to the dollar.
• There is a continued growth in the
exploitation of U.S.
natural gas resources and an increased
ability to export it,
which provides a
positive trade balance. The U.S. became
a net exporter of energy resources in
late 2016 for the first time in nearly 60
• Federal funding for academic R&D
continues to shrink each year; however,
there are indications that this trend may
• Strong federal support of defense spending and defense R&D is likely to be continued with the new administration and
congress. There are indications from
the new administration that spending in
these areas could be slightly enhanced.
• There is considerable uncertainty about
President-elect Trump’s plans other than
a repealing of Net Neutrality, scale-back/
elimination of the Affordable Healthcare
Act, dramatic scale-back/deportation of
illegal immigrants and the creation of
infrastructure spending goals. Trump
also discussed several times, during his
campaign that he wanted to rewrite or
even eliminate many previously created
treaties including that for climate change.
• Another concern over Trump’s statements has been on
his trade protectionism stance and its overall effect on
global trade. As witnessed in the past, any overtures for
putting new trade tariffs or taxes on foreign-produced
imports are often met with equal actions on U.S. produced exports. These trade-war actions result in higher
consumer costs and a further slowing of global economic growth. While the purpose of putting tariffs in place
is to protect or create more home-based jobs, the actual
result has often been just the opposite.
• Most of Trump’s budgetary and program proposals
are likely to face little or weak opposition in light of the
strongly Republican-controlled Congress and marginally controlled Senate. The polarization seen during the
presidential election is likely to continue in congressional
debates with strongly motivated minority discussions and
actions, with little net effective results.
All of these factors create an environment with mixed messages
for R&D investments. A growing
economy is the strongest indicator for R&D growth and there
are numerous indications that
the U.S. economy will expand in
2017 and possibly beyond. Limitations on government spending
act to restrict R&D growth and
The U.S. became a net
exporter of energy resources
in late 2016 for the first
time in nearly 60 years.
Unless otherwise noted, all charts are results of IRI /R&DMagazine Surveys.
Importance of R&D Operations
High Medium Low
Attract, retain R&D staff 55% 30% 15%
Balance short/long term R&D 46% 43% 11%
Build an innovation culture 57% 34% 9%
Comply with regulations 50% 35% 15%
Management technology support 38% 44% 18%
ID disruptive technologies 40% 40% 20%
Improve efficiency 58% 34% 8%
improve knowledge management 50% 41% 9%
Improve sustainability 41% 42% 17%
Integrate tech planning & business 42% 43% 15%
Develop leadership 37% 47% 16%
Manage global innovation 24% 40% 36%
Measure R&D value 30% 52% 18%