Research & Development Funding To Increase 2.9% In 2006

In 2006 R&D funding should hit $329 billion, up from $320 billon in 2005, according to Columbus, Ohio-based Battelle-R&D Magazine's annual forecast. Industrial expenditures are expected to reach $211.9 billion in 2006, an increase of 3.5% over the $204.8 expended in 2005.

The trend throughout the report "is that the support of research and development runs the risk of being viewed as an expense and a luxury, rather than an investment, and one that can be shelved until more funds are available," said Battelle's Jules Duga, a senior research leader and co-author of the forecast.

A trend of note is the difference between how much industrial support will increase and how it is distributed between domestic and foreign performers. Major increases in the funding of offshore R&D performance, coupled with the expansion of offshore facilities, will have an impact on the U.S. R&D enterprise. While earlier data showed a favorable "balance of trade" in the funding of R&D -- with foreign company support of R&D performed in U.S.-located facilities outdistancing the amount of R&D funded abroad by U.S. companies -- the gap had been narrowing over the past few years. Recent studies reveal that the total amount of foreign direct investment is shifting heavily toward India and China, and that the R&D component of this investment is increasing as well. In addition, Eastern Europe is expected to be a growing actor in this field.

It is expected that pharmaceuticals, automotive and information technology will continue their traditional roles as leaders in funding.

The anticipated across-the-board reduction in federal support for R&D "does not bode well for the support of initiatives that have been touted to return the U.S. to prominent positions in different areas of science and technology," Duga said.

A projected shortfall of scientists, engineers and researchers remains an area of concern that is exhibited in trends in the industrial market as well as in the federal government.

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