Los Angeles, CA (PRWEB) December 08, 2013
Increased funding from the government, corporations and academia has benefited the Scientific Research and Development industry. Federal funding accounts for about 61.3% of industry revenue, while other government funding generates about 4.0%. However, while still overwhelmingly funded by public sources, there has been a shift toward private funding that is slowly changing the focus of industry research. “Historically, government money has been devoted to basic research, or research without a specific goal, but private and corporate money is often devoted to experimental and developmental research that builds upon an existing idea that has already been developed by basic research,” according to IBISWorld Industry Analyst Jeremy Edwards. This type of research and development (R&D) is far more financially viable, with companies more inclined to invest in it to gain a competitive advantage over the past five years. As a result, IBISWorld expects industry revenue to increase at an annualized rate of 3.8% over the five years to 2013 to total $134.4 billion.
Industry revenue is projected to contract 1.0% in 2013. In stark contrast to the past five years, the industry's current status is characterized by a high degree of uncertainty. Government budget enforcement procedures known as sequestration (set out in the Budget Control Act) came into effect in March of 2013, following the US Congress' failure to reach a budget agreement. “Whether a new budget will be put forward and adopted remains uncertain, as does the level of R&D spending that would appear in any new budget,” says Edwards. A report by the Information Technology and Innovation Foundation projects that federal funding for R&D will decrease by 8.7% ($12.5 billion) in 2013 as a result of the sequestration.
Over the next five years, the industry will continue to benefit from growing environmental concerns throughout the public and private sector, particularly as corporate profit margins increase and create room for additional investment in research. However, the budget sequestration that began 2013 will mitigate growth opportunities in the industry. A new bipartisan budget agreement that puts an emphasis on new R&D spending is essential to the industry's future growth prospects.
For more information, visit IBISWorld’s Scientific Research and Development in the US industry report 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
The Scientific Research and Development 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
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.