Shifting funding sources have made research more experimental than basic.
Los Angeles, CA (PRWEB) July 27, 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 annualized rate of 4.1% during the five years to 2012 to total $118.4 billion, despite slower 1.4% growth in 2012. According to IBISWorld industry analyst Agata Kaczanowska, “The slower growth signals a dip in government spending in 2011, when federal stimulus money dried up.” Federal spending on scientific research grew at an 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 more than half of industry revenue in 2012.
While still overwhelmingly funded by public sources, a shift toward private funding has changed the focus of the industry's research. Historically, says Kaczanowska, 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 are more inclined to invest in it. While there are no major players in the Scientific Research and Development industry with market shares greater than 5.0%, a number of firms are well known, such as Johns Hopkins University.
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 is expected to increase at rapid annualized rates over the five years to 2012. The industry will also benefit from the green movement currently sweeping across the United States. While legislation on emissions trading or 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 at environmentally friendly jobs, which accelerated this transition. Increasing investment into scientific R&D is forecast to expand industry revenue in the five years to 2017. For more information, visit IBISWorld’s Scientific Research and Development in the US industry report page.
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IBISWorld industry Report Key Topics
This industry is involved in physical, engineering or life sciences research and development (R&D). This industry includes companies, individuals and organizations whose primary purpose is R&D and, therefore, excludes players such as pharmaceutical or manufacturing companies. Government entities are 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
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