News of the Week
BATTELLE PREDICTS 8 % RISE IN R&D FUNDING Expenditures for research and development in the U.S. will reach $83.6 billion in 1983, Battelle Columbus Laboratories says in its annual R&D forecast. According to Battelle economists Jules J. Duga and W. Haider Fisher, that amount represents an 8.2% increase from the $77.3 billion that the National Science Foundation estimates actually was to be spent for R&D in 1982. More than half the increase will be absorbed by inflation, which Battelle estimates at 4.5% (for R&D) in 1983. Real growth in R&D will be about 3.5%, slightly higher than the average annual 3.3% increase for the past nine years. Funding and performance patterns won't change much from previous years. However, for the second year in a row, industry R&D funding will exceed government support. Industry is expected to provide $41.4 billion, a 7.6% increase from 1982 and 49.6% of the 1983 total. The federal government is expected to provide $39.3 billion, ah 8.8% increase from this year and 47.0% of the total. The rest will come from academic institutions ($1.8 billion, 2.1% of the total) and other not-forprofit organizations ($1.1 billion, 1.3% of the total). Industry will continue to do most of the work. In 1983, Battelle says, R&D performance by industry is expected to come to $60.7 billion, or 72.5% of the total. In-house federal research will amount to $10.8 billion (13.0%). R&D by academic institutions will account for $9.7 billion (11.6%) and R&D performed by other not-for-profit organizations will come to $2.4 billion (2.9%). Federal funds support R&D performance in all four sectors, Battelle notes. About 25% goes for in-holise work; almost 50% goes to industry; about 20% goes to colleges and universities; the rest, about 5%, goes to other not-for-profit organizations. According to the forecast, four government agencies will account for 91.2% of total federal R&D funding in 1983: the Department of Defense (56.6%), the National Aeronautics & Space Administration (14.9%), the Department of Energy (10.4%), and the Department of Health & Human Services (9.3%). Battelle says that increases in de6
C&EN Dec. 13, 1982
fense R&D spending are related primarily to the acquisition of major weapons systems. However, budgets also increased for space and general science programs. Space research has received à boost from the success of the space shuttle program. The potential use of the shuttle for economical orbital insertion and repair of satellites is seen as justifying continued support, the forecast notes. However, funds for energy R&D will continue to decline, Battelle says, "since there is little evidence that energy will be perceived as a national problem requiring massive federal R&D support." Also, "less em-
R&D funding to reach $83.6 billion in 1983 Source of funds
Industry 49.6% Fédérai government
47.0%
Other nonprofit institutions
1.3%
Colleges and universities 2.1%
Performance of R&D
Industry
715%
Federal government \ 13.0% Colleges and Other nonprofit universities 11.6% institutions
2.9% Source: Battelle Columbus Laboratories
phasis will be placed on 'soft' sciences, except those environmental, ecological, and socioeconomic investigations presently mandated by law." R&D will be heavily self-funded in the manufacturing industries, Battelle says, with, on average, only 32.2% of the total ($58.6 billion) coming from the federal government. In 1983, electrical machinery and communications will displace aerospace as the largest single sector of industrial R&D, with total funding close to $12.9 billion, 40.9% of which will come from the federal government. Total funds for aerospace R&D will amount to $11.8 billion, with about 80% of that amount coming from the federal government. Other major sectors of industrial R&D include machinery ($9.05 billion total, 16.7% federally funded); autos, trucks, parts, and other transportation equipment ($7.19 billion, 14.4%); chemicals ($6.83 billion, 10.0%); professional and scientific instruments ($3.43 billion, 6.4%); and petroleum products ($2.47 billion, 12.5%). Nonmanufacturing industries do relatively little R&D—only about $2.02 billion total in 1983, according to the forecast. Support for those activities will be divided almost equally between industry and the federal government. In general, Battelle says, industry is taking over s h o r t - t e r m R&D projects. It also is reacting to growing pressure from foreign technological competition. The forecast warns, however, that industry R&D commitments tend to lag a year behind cash flows. Battelle also notes that, during the past few years, federal support has shifted toward more development and away from basic and applied research. If that trend continues, "the long-range consequences may pose significant problems in terms of the science base upon which economic vitality grows." That problem may be mitigated by a continuation of the recent resurgence of basic research support by industry. However, adds Battelle, the volatility of indicators that affect industrial R&D budgets—such as sales, profits, and cash flows—precludes stability for long-term planning. D
