Research Funding

There are several sources for funding research and development (R&D). Private and public sectors are major sources of funding R&D. The benefits and the significant impacts of research funding are invaluable assets in research and innovations. In contrast, lack of research funding is detrimental to R&D and perhaps deters continuous advancement of novel innovations. The public sector is an essential unit in research funding, which includes federal or state or regional funded projects.

The US government by far is the largest funding source of R&D than any other country in the world. In 2009, the US spent $401.6 billion in research funding, while the European Union and China spent $297.9 billion and 154.1 billion in dollar amount in research funding respectively (Kennedy, 2012). However, based on the percentage GDP estimation, South Korea spent 3.4%, Japan 3.3%, the US 2.9%, European Union 1.9% and China spent 1.7% of its national GDP in research funding (Kennedy, 2012). Nonetheless, research spending fluctuates yearly. The US private industry and government spending accounts for 93% of R&D spending. About 62% of the spending totaling $247.4 billion was from private sectors while 31% totaling $124.4 billion came from the federal government (Kennedy, 2012). Majority of the R&D have been conducted by private industries in the US since 1950s. In 2009, approximately 70.5% ($248.4 billion) of private funds and 7.7 % ($30.9 billion) of federal funds were invested in R&D. Federally Funded Research and Development Centers (FFRDCs) accounts for 3.8% ($15.2 billion), university and college funding accounts for 13.6% ($54.4 billion) and the non-profit organizations account for 4.4% ($17.5 billion) in research funding (Kennedy, 2012). In other words, private industries outpaced the US federal government in research funding. However, the essential roles of government funding in R&D should not in any way be diminished or underestimated.

The US federal government is by far the largest source in funding R&D in universities and colleges. In 2009, institutional funding by the federal government to universities and colleges was $31.6 billion which is about 58.1% of all institutional research funds (Kennedy, 2012). In addition, the federal funding for R&D stimulates the economy and create jobs. One good example is the human genome project. The US government invested $3.8 billion from 1988 to 2003 in the human genome project, and about $300 million went to Washington University for the human genome project research. Overall, the human genome project facilitated approximately $796 billion in the US economy and created/supported more than 310, 000 jobs (Shapiro, 2012).

Among capitalists, some of the concerns regarding federal funding are not limited to the fear of price-control and bureaucracy delay process involved in federal funding. Furthermore, price regulation is not a favorable option in the private industry’s portfolio. Opponent of federally funded projects argues that one of the demerits of federal grant is that some grant regulations allow funding only at a particular stage of the research project (Harris, 2009). In furtherance, they argued that the delay process associated with federal funding creates delay in R&D progress.

However, without government funding, scientific innovation will incur substantial drawbacks in scientific research both the institutional and private level because universities and colleges cannot support or fund the totality of R&D projects. Thus, the volume of institutional investigators will decrease, and tuition fees for universities/colleges will increase (Harris, 2009). Overall, the reduction of government funding in R&D will create a decline in the economy and academic competitiveness. Thus, in the absent of federal funding for R&D, the rate at which research innovation declines will depend on the availability, accessibility, feasibility, and sustainability of any other alternative funding options.


Harris, G. (2009). Debate flaring over grants for research. The New York Times. Retrieved from

Kennedy, J. (2012). The Sources and Uses of U.S. Science Funding. The New Atlantis, 36, pp. 3-22. Retrieved from

Shapiro, L. (2012). Federal cuts to medical research would be devastating. Retrieved from