Public research and development
Public research and development (Public R&D) is research done by public sectors like governments, colleges, and nonprofits. It also includes grants and contracts to private companies, known as R&D subsidies. So Public R&D can be something that funds research or something that does research.
Key numbers from the United States in 2015
- Public R&D expenditures by sector: federal government $54B; local governments $0.6B; colleges $64B; nonprofits $20B.
- Private industry spent $356B on R&D.
- R&D expenditures funded by public sectors: federal $121B; local $4.3B; colleges $17B; nonprofits $19B.
- R&D expenditures funded by industry: $333B.
- Public R&D funding relative to private R&D was about 0.5 (roughly half as much from public sources as from private).
Global leaders and what they spend
- Israel is the world leader in public R&D spending as a share of GDP.
- The United States spends the most in total dollars on R&D.
What economists say about Public R&D
- Public R&D can raise industrial productivity and create spillovers to private firms.
- It may also cause researchers to move between sectors or encourage cooperation, which can be good or bad.
- A big question is whether public R&D stimulates private R&D (crowding in) or dampens it (crowding out). There is no clear consensus yet.
- Some studies also link higher public R&D to stock returns for industrial firms, suggesting investors view it as affecting cash flow risk and growth prospects.
Europe and the United States today
- The European Union spent €352B on R&D in 2022, about 2.22% of GDP.
- Within the EU, R&D intensity (R&D as a share of GDP) was highest in Belgium (3.44%), followed by Sweden (3.40%), Austria (3.20%), and Germany (3.13%).
- Israel leads the world in R&D as a share of GDP, at 6.02%.
- The United States spends the most in pure terms. In 2020, the U.S. federal R&D budget was $156B.
This page was last edited on 3 February 2026, at 18:04 (CET).