Federal research and development (R&D) funding has increased since 2012—most recently because of COVID-19 stimulus funding.
The Government Accountability Office (GAO) reports that five agencies obligated the majority of federal R&D funding with the Departments of Defense (DOD) and Health and Human Services (HHS) accounting for nearly 80 percent in fiscal year 2021. HHS has mainly funded research, while DOD mainly funds development. However, HHS has become a major funder of development in recent years because of COVID-19 stimulus funding. HHS averaged less than 1 percent in development funding through fiscal year 2019 but reported 37 percent of its R&D obligations were for development in fiscal year 2021. Of the estimated $179.5 billion in federal R&D obligations in fiscal year 2021, about two-thirds went to organizations outside the federal government. In fiscal year 2021, industry, universities, and colleges received the majority of these external R&D obligations—almost $90 billion.
Federal funding also includes four multi-agency initiatives in areas identified as having long-term national importance, such as quantum information science and nanotechnology. These initiatives coordinate activities in areas that are too broad or complex to be addressed by one agency alone. For example, GAO found that more than 60 agencies participate in an initiative on network and information technology, which includes investments in artificial intelligence and machine learning. Not all participating agencies contribute funding to such initiatives. Funding for these initiatives increased over the previous decade, and accounted for roughly $14 billion in fiscal year 2020, just under 9 percent of the total federal R&D budget.
