United States Falls Behind in University Research Funding

On Oct 22, 2019

Despite boasting world-leading research universities that have been key to driving American technological supremacy since World War II, a new report from the Information Technology and Innovation Foundation (ITIF), the world’s top-ranked think tank for science and technology policy, finds that the United States continues to fall further behind world leaders in funding for university research. Using data from the OECD and the National Science Foundation, the report shows that the United States has slid to 28th in government funding as a share of GDP, with the 12 leading governments investing more than double the U.S. investment. The report recommends that the United States significantly increase university research funding and provide stronger incentives for businesses to also increase their research investments.

“Other nations are increasing their investments in university research because they understand the critical role research universities play in generating innovation-based economic growth. Research drives innovation, and innovation drives long-run economic growth—creating jobs and improving living standards in the process,” said ITIF President Rob Atkinson, lead author of the report. “The United States can’t rest on its laurels. To once again lead the world in innovation, policymakers must make the necessary investments in university research.”

The report shows that, as of 2017, governments in the United States collectively invested 0.2 percent of GDP on university research, ranking 28th out of 39 nations.

The report also shows that, between 2011 and 2017, U.S. government funding for university research as a share of GDP fell by nearly a quarter—0.06 percentage points. The U.S. decline during this period is nearly unrivaled, with only Ireland and Estonia seeing larger funding reductions. On average, nations decreased 0.03 percent of GDP.

The report recommends that Congress commit to increasing university research support by $45 billion per year, which would place the United States among the top seven nations in the world in funding for university research. In addition, the report recommends that Congress expand the energy-related collaborative research and experimentation tax credit to apply to any field of university research investment—not just energy research—made by businesses.

“The private sector alone does not and cannot invest in university research funding at the levels society needs,” said ITIF Research Assistant Caleb Foote, co-author of the report. “The university system plays an important role in filling the gap between the current levels of private R&D and the optimal levels for economic growth. Without public investment, the rates of economic growth, job creation, and improvements in living-standards won’t meet their full potential.”

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