New York, NY (PRWEB) April 28, 2014
Firms in the Scientific Research and Development industry provide physical, engineering or life sciences research and development. Firms in the industry are those whose primary purpose is research and development; however, companies such as pharmaceutical firms that undertake research and development to support primary operations, are not included.
Over the past five years, the industry has performed well despite challenging conditions presented by the recession that caused many industries to decline. The onset of the recession caused the US federal government to increase spending to limit the effects of plunging private investment. As a result, the industry posted strong growth in 2009 and 2010. However, more recently, the industry has begun to struggle as federal funding is waning. Budget sequestration came into effect in 2013 as a result of the US government being unable to reach a new budget agreement. Consequently, industry operators experienced a fall in demand due to the fact that the federal government accounts for more than half of total industry revenue. This decline was exacerbated by continued budget cuts to defense programs as the federal government brought troops home that were stationed overseas, therefore reducing demand for new technologies required for war.
Government funding for environmentally friendly technologies and stronger private investment due to increasing corporate profit have prevented the industry from declining over the past two years. In the five years to 2014, according to IBISWorld Industry Analyst Jeremy Edwards, "industry revenue is projected to grow at an average annual rate." However, "conditions are expected to be difficult in 2014 as reduced federal spending causes the industry to contract," says Edwards.
The Scientific Research and Development industry is characterized by a low level of market share concentration. Industry growth is expected to be limited in the next two years before strengthening in the second half of the next five-year period. Falling federal funding for defense and weak government investment will mitigate industry growth; however, improving private investment from major industries such as oil and health will help long-term growth. Additionally, investment in new technologies, such as nanotechnology, will benefit industry firms. As a result, the industry is projected to continue to grow at an average annual rate over the five years to 2019.
For more information, visit IBISWorld’s Scientific Research & Development in the US industry report page.
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IBISWorld industry Report Key Topics
The Scientific Research & 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.