Shifting funding sources have changed the type of research from basic to experimental
Los Angeles, CA (PRWEB) March 24, 2012
Increased funding from all economic sectors, including the government, corporations and academia, is benefiting the Scientific Research and Development industry. As a result, IBISWorld expects industry revenue to increase at an average annualized rate of 4.1% during the five years to 2012 to total $118.4 billion, despite slower growth in 2012. According to IBISWorld industry analyst Agata Kaczanowska, “The slower growth signals a dip in government spending as stimulus money dried up early in 2011.” Federal spending on scientific research grew at an average annualized rate of 0.3% over the five years to 2012, with a 9.7% jump in 2010 when some stimulus spending was channeled to the industry. Federal funding is expected to contribute the majority of industry revenue in 2012.
While still overwhelmingly funded by public sources, Kaczanowska says, a shift toward private funding has changed the focus of the industry's research. Historically, government money has been devoted to basic research, meaning 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 are more inclined to invest in it. Despite relying heavily on government funding, a growing private interest in R&D is expected to translate into increasing investment in the near future. Indeed, commercial and nonprofit investment are expected to increase grow rapidly over the five years to 2012. IBISWorld expects total corporate investment in scientific R&D to generate a larger share of industry revenue in 2012. With no major players, or firms that account for 5.0% or more of the industry’s total market, the Scientific Research and Development industry is highly fragmented.
The industry will also benefit from heightened interest in “going green” across the United States. While legislation on emissions trading or other green initiatives may still be pending, the private sector has been moving toward green technology for some time. A significant slice of recent stimulus spending was targeted toward environmentally friendly jobs, which accelerated this transition. Increasing investment in scientific R&D is forecast to expand industry revenue in the five years to 2017. For more information, visit IBISWorld’s Scientific Research & Development report in the US industry page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
This industry is involved in physical, engineering or life sciences research and development (R&D). This includes companies, individuals and organizations whose primary purpose is R&D and, therefore, excludes players such as pharmaceutical or manufacturing companies. Government is also excluded from this industry, although it does contract and fund 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
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.