R&D funding levels: how they affect engineering opportunities

Because of their roles in fostering design innovation, engineers naturally have a strong interest in research and development (R&D). Although over 68 percent of R&D is spent by industry, industrial R&D focuses on short-term payoffs, so it is mostly directed toward product improvement or more efficient manufacturing processes. In economic downturns, industrial R&D budgets may suffer, even though there is general acknowledgement that steady, ongoing research spending is crucial to long-term survival. This paper discusses the variation in industrial R&D expenditure and the role of government laboratories and the defense department in R&D. The basic R&D categories are defined and the activities of DARPA are outlined. Although no single preferred methodology exists for identifying high-technology industries, most calculations rely on a comparison of R&D intensities. R&D intensity, in turn, is typically determined by comparing industry R&D expenditures or the number of technical people employed with industry value added or the total value of its shipments.