Shifting funding sources have made research more experimental than basic
Los Angeles, CA (PRWEB) December 11, 2012
“Increased funding from the government, corporations and academia has benefited the Scientific Research and Development industry,” according to IBISWorld industry analyst Kevin Boyland. As a result, IBISWorld expects industry revenue to increase at an annualized rate of 4.1% over the five years to 2012 to total $118.4 billion. However, revenue growth is expected to slow to 1.4% in 2012 following a dip in government spending in 2011 and an ongoing budget dispute on Capitol Hill. Federal funding is expected to contribute about 61.3% of industry revenue in 2012; other government funding is expected to contribute 4.0%.
While still overwhelmingly funded by public sources, a shift toward private funding is slowly changing the focus of industry research. Historically, government money has been devoted to basic research, or research without a specific goal. However, private and corporate money is often devoted to experimental and developmental research that builds upon an existing idea often already developed by basic research. This type of research and development (R&D) is far more financially viable, and companies have been more inclined to invest in it to gain a competitive advantage over the past five years. Nonetheless, there are no major players in the Scientific Research and Development industry, and the multitude of research topics undertaken by the industry precludes any one firm from gaining a dominant position. “Although players in the industry have made some acquisitions over the five years to 2012, concentration has only slightly increased,” says Boyland.
The industry will continue to benefit from growing environmental concerns throughout the public and private sector. A significant slice of recent stimulus spending was targeted at renewable energy jobs, highlighting this growing concern. Over the five years to 2017, increasing investment into scientific R&D is forecast to expand industry revenue at a steady rate. Continued interest in R&D from the private sector is also expected to increase investment in the industry moving forward. Nevertheless, the industry will remain largely dependent on funding from the federal government. This dependence is highlighted by the impending sequestration of federal funds (known as the fiscal cliff) that will come into effect in January 2013 if Congress and the President cannot agree on a deficit reduction plan. If the sequestration takes effect, the industry stands to lose tens of thousands of jobs and a dramatic amount of funding. For more information, visit IBISWorld’s Scientific Research & Development in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes companies and organizations that are involved in physical, engineering or life sciences research and development (R&D). The industry only includes firms whose primary purpose is R&D and excludes players such as pharmaceutical or manufacturing companies that may undertake R&D to support their primary operations. Government entities are also excluded from this industry, although these entities may contract and fund the research this industry undertakes.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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