Appendix
Note on Sources of Data

This report relies primarily on a series of annual surveys conducted by the National Science Foundation’s Division of Science Resources Studies (NSF/SRS). The following descriptions of these surveys emphasize the information collected that is relevant to the subject of this report. Privately collected data on charitable foundation giving supplement these surveys.

SURVEY OF FEDERAL FUNDS FOR RESEARCH AND DEVELOPMENT

(http://www.nsf.gov/sbe/srs/sffrd/start.htm)

The Federal Funds Survey is conducted annually and includes retrospective reports of 32 federal agencies and their major subdivisions on obligations actually incurred during the past fiscal year and those expected to be incurred during the current and following fiscal years. The information is collected in a number of categories (i.e., research field, character of research, and performer) that can be cross-tabulated in useful ways for an analysis of trends in federal research spending. Obligations are commitments to spend money, regardless of when the funds were appropriated and of whether actual payment may be made later, for example, under multiyear contracts. In most cases respondents are agency budget analysts who consult with R&D program managers in their agencies.

Character and field of research. Obligations for research are classified as basic research or applied research in seven broad research fields and in 26 narrower natural and social science and engineering fields, called subfields in this report. Although the nomenclature corresponds to academic disciplines and departments, in the Federal Funds Survey it also is applied to research performed in industry and government laboratories and by other nonprofit institutions. The field categorization used by the Federal Funds Survey is further discussed in Chapter II. NSF/SRS does not try to collect information on obligations for “development” by research field because of the difficulty of categorizing highly applied work that may draw on many disciplines (for example, in the development of a military aircraft).

Uncharacterized research. The agencies also report funding of research “not elsewhere classified” or “n.e.c.” for each broad field (i.e., life sciences, n.e.c.; engineering, n.e.c.) and for research that cannot be attributed to any broad field (i.e., other sciences, n.e.c.). These may be multidisciplinary or interdisciplinary projects that do not fall within any of the broad fields or subfields. The n.e.c. categories represent the majority of research in the social sciences and psychology (60.4 percent and 86.6 percent, respectively) and are quite large in engineering (28.3 percent) and environmental sciences (19.4 percent), but they are much smaller in other major fields. They have been growing in most major fields but not very rapidly. All n.e.c. research combined was 15.5 percent in 1993 and 16.8 percent in 1999.

Two-year projections. The survey asks agencies to estimate future research allocations for the current and next fiscal years for the seven broad fields but not for the 26 subfields. For the fiscal year in which the survey is administered agencies’ estimates reflect enacted appropriations levels and are presumably fairly realistic. For example, the latest survey was conducted between February and September 2000, when agencies were in the middle or late stages of obligating the FY 2000 budget and had a good idea of what the final amounts would be. For the subsequent fiscal year (FY 2001 in the case of the latest survey reported), the estimates reflect probable administration budget request levels, which frequently differ from actual appropriations. In the case of the National Institutes of Health, for example, congressional appropriations have consistently exceeded executive branch requests.

Performers. Agencies report how much they obligate for basic and applied research by performer (i.e., industry, universities, nonprofit institutions, and in-house and



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Trends in Federal Support of Research and Graduate Education Appendix Note on Sources of Data This report relies primarily on a series of annual surveys conducted by the National Science Foundation’s Division of Science Resources Studies (NSF/SRS). The following descriptions of these surveys emphasize the information collected that is relevant to the subject of this report. Privately collected data on charitable foundation giving supplement these surveys. SURVEY OF FEDERAL FUNDS FOR RESEARCH AND DEVELOPMENT (http://www.nsf.gov/sbe/srs/sffrd/start.htm) The Federal Funds Survey is conducted annually and includes retrospective reports of 32 federal agencies and their major subdivisions on obligations actually incurred during the past fiscal year and those expected to be incurred during the current and following fiscal years. The information is collected in a number of categories (i.e., research field, character of research, and performer) that can be cross-tabulated in useful ways for an analysis of trends in federal research spending. Obligations are commitments to spend money, regardless of when the funds were appropriated and of whether actual payment may be made later, for example, under multiyear contracts. In most cases respondents are agency budget analysts who consult with R&D program managers in their agencies. Character and field of research. Obligations for research are classified as basic research or applied research in seven broad research fields and in 26 narrower natural and social science and engineering fields, called subfields in this report. Although the nomenclature corresponds to academic disciplines and departments, in the Federal Funds Survey it also is applied to research performed in industry and government laboratories and by other nonprofit institutions. The field categorization used by the Federal Funds Survey is further discussed in Chapter II. NSF/SRS does not try to collect information on obligations for “development” by research field because of the difficulty of categorizing highly applied work that may draw on many disciplines (for example, in the development of a military aircraft). Uncharacterized research. The agencies also report funding of research “not elsewhere classified” or “n.e.c.” for each broad field (i.e., life sciences, n.e.c.; engineering, n.e.c.) and for research that cannot be attributed to any broad field (i.e., other sciences, n.e.c.). These may be multidisciplinary or interdisciplinary projects that do not fall within any of the broad fields or subfields. The n.e.c. categories represent the majority of research in the social sciences and psychology (60.4 percent and 86.6 percent, respectively) and are quite large in engineering (28.3 percent) and environmental sciences (19.4 percent), but they are much smaller in other major fields. They have been growing in most major fields but not very rapidly. All n.e.c. research combined was 15.5 percent in 1993 and 16.8 percent in 1999. Two-year projections. The survey asks agencies to estimate future research allocations for the current and next fiscal years for the seven broad fields but not for the 26 subfields. For the fiscal year in which the survey is administered agencies’ estimates reflect enacted appropriations levels and are presumably fairly realistic. For example, the latest survey was conducted between February and September 2000, when agencies were in the middle or late stages of obligating the FY 2000 budget and had a good idea of what the final amounts would be. For the subsequent fiscal year (FY 2001 in the case of the latest survey reported), the estimates reflect probable administration budget request levels, which frequently differ from actual appropriations. In the case of the National Institutes of Health, for example, congressional appropriations have consistently exceeded executive branch requests. Performers. Agencies report how much they obligate for basic and applied research by performer (i.e., industry, universities, nonprofit institutions, and in-house and

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Trends in Federal Support of Research and Graduate Education contract laboratories) but with one exception do not separately report these figures by field of science and engineering. The six largest R&D supporting agencies report research performed by universities and colleges by field and also by whether it is basic or applied research. However, research performed in industry or government laboratories is not reported by field. Anomalies. Unexplained discontinuities in the data usually prompt NSF/SRS or its contractor to inquire about the source of anomaly, which may be a genuine change in priorities or a reclassification. Beginning with FY 1996, the reporting unit for NSF, for example, changed its procedures for classifying research obligations by field. The change most affected engineering, where the amount classified as “n.e.c.” by NSF jumped from 20 percent to 40 percent of engineering research, while mechanical engineering dropped from 13 percent to 2 percent of NSF engineering research funding. Because NSF is the second largest funder of mechanical engineering (after the Department of Defense), the total amount of funds for mechanical engineering appeared to drop by 30.1 percent from FY 1995 to FY 1996, although almost certainly any shift in NSF’s portfolio was not as significant. A similar shift into the n.e.c. category occurred in the classification of physical science research, which especially affected physics. The NSF-reported increase in oceanography research and drop in geology research from 1995 to 1996 may also have involved reclassification of some activities from one category to another rather than a real change. Features of our analysis. In this report, the current dollar expenditure data from the Federal Funds Survey are converted to constant 1999 dollars, using the official deflators issued by the Office of Management and Budget (OMB) in February 2001.1 Subfields of the social sciences and psychology are not considered in this report because of the high proportion of research in both major fields reported as “n.e.c.” “Engineering, n.e.c.,” called other engineering in this report is included in the analysis because it encompasses a series of discrete fields (e.g. biomedical, nuclear, etc.) constituting a significant part of the discipline rather than a residual category for unclassifiable or multidisciplinary research. Accordingly, our analysis is based on trends in 22 subfields, counting social sciences and psychology as subfields. Most of the analysis is based on actual obligations through FY 1999, the last year for which subfield data are available. In some instances, trends in broad fields are reported through FY 2000, because of the reliability of the estimations for that year in contrast to the estimations for FY 2001. In describing trends in the affected fields the report tries to take into account the affects of the 1996 changes in NSF classification criteria affecting reported obligations in certain fields. SURVEY OF RESEARCH AND DEVELOPMENT EXPENDITURES AT UNIVERSITIES AND COLLEGES (http://www.nsf.gov/sbe/srs/sseeuc/start.htm) The university R&D expenditures survey has collected data annually from a sample of education institutions that grant science and engineering degrees and perform a minimum level of separately budgeted R&D. Three years ago the survey was expanded to a census of all research universities. Respondents are usually central administrative staff who consult with their academic departments that are receiving support. Character and field of research. The major fields and subfield classifications used in this survey are virtually the same as those used in the Federal Funds Survey, but institutions are not asked to disaggregate R&D into basic, applied, and development categories. Thus, funds for research and funds for development cannot be distinguished as they are in the Federal Funds Survey. Unclassified research. Academic respondents may avail themselves of the same “not elsewhere classified” categories in each major field and overall. “N.e.c” research is highest in engineering (22 percent in a recent survey), lowest in the life sciences (4 percent), and about 10 percent overall, or lower than reported in the Federal Funds Survey. Sources of support. NSF asks for total expenditures by field and federal expenditures by field. This enables one to derive data on nonfederal sources of support but not to disaggregate these data further, for example, to determine how state government or industry or philanthropic support varies by field and over time. Discrepancies between the surveys. The university survey results show higher levels of support for academic research overall and in most fields than do the Federal Funds Survey results. For example, federal obligations for academic electrical engineering research declined in constant dollars by more than 30 percent between 1993 and 1997. But according to the academic R&D survey, federally funded R&D expenditures in that field increased 1   Office of Management and Budget. 2001. Historical Tables, Budget of the United States Government: Fiscal Year 2002, Table 10.1. Washington, D.C.: U.S. Government Printing Office. 2   National Research Council. 2000. Measuring the Science and Engineering Enterprise: Priorities for the Division of Science Resources Studies, pp. 94–95. Washington, D.C.: National Academy Press. The National Academies’ report observes that the gap between federal obligations to universities and the level of federally funded R&D expenditures by universities opened in 1992 and has been growing, to about $1.9 billion in 1997. A much larger discrepancy exists between the results of the Federal Funds Survey and NSF’s Survey of Industrial R&D with respect to the size of federally funded R&D expenditures in industry (p. 47).

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Trends in Federal Support of Research and Graduate Education by 27.2 percent.2 The omission of development funds from the Federal Funds data on university research and the inclusion of development funds in the data reported by academic institutions account for some of the difference between the results of the two surveys, especially in fields such as engineering where development comprises about 60 percent of academic R&D compared with 13 percent of academic R&D in science. A second and possibly larger contributor to the difference is that the academic R&D survey counts twice some funds that derive from the federal government but are transferred from one institution to another.3 Third, obligations (reported in the Federal Funds Survey) differ from actual expenditures (reported in the academic R&D survey) from year to year. Fourth, Federal Funds Survey respondents tend to assign more research to n.e.c. categories than do academic respondents, perhaps in part because it is easier for institutions to identify departments receiving the funds than for federal officials to assign a field of research. Features of our analysis. Because of double counting of federal dollars, we rely on the Federal Funds Survey data to analyze the field distribution of government support. Nevertheless, the Academic R&D Expenditures Survey provides the only data on university funds by research field from other sources (e.g., state government and industry), and the latter are cited in Chapter 5. SURVEY OF GRADUATE STUDENTS AND POSTDOCTORATES IN SCIENCE AND ENGINEERING (GSPSE) (http://www.nsf.gov/sbe/srs/sgss/start.htm) The graduate student survey collects data on the number and characteristics of graduate science and engineering students and postdoctorates enrolled in U.S. institutions offering postbaccalaureate programs in science and engineering. The final 1998 survey universe consisted of 722 responding units at 601 master’s- and doctorate-granting institutions in the United States. Survey questionnaires are completed for each department in each responding unit at an institution either centrally or by departmental staff. Variables. Data variables drawn on for our analysis include enrollment status, postdoctorate status, primary source of support, mechanism of support, and field of study. Field of study. The major fields and subfield classifications are in some respects more detailed than those in the Federal Funds and Academic R&D Expenditures Surveys. For example, there are 14 instead of 7 engineering fields, 17 biological sciences fields, and 23 “health” fields. In two cases, subfields in the Federal Funds Survey are combined in the GSPSE data. “Aerospace engineering” indicates both aeronautical and astronautical engineering. “Biological sciences” incorporates environmental biology. Unclassified students. In GSPSE there are departments that are classifiable by broad, but not fine, field. Thus there are residual categories such as “physical sciences (and biosciences, psychology, engineering, etc.), other.” These residual categories comprise from less than 1 percent to more than 25 percent of their broad field category. Primary source and mechanism of support. Respondents are asked to identify the primary source of support for each graduate student and postdoctorate. For graduate students, sources of support include federal agencies (e.g., Department of Defense, National Institutes of Health, other HHS, National Science Foundation, Department of Agriculture, NASA, etc.) and nonfederal sources (institutional support, self support, other U.S. and other foreign). GSPSE also asks respondents to cross-tabulate source of support against the following mechanisms of support: graduate fellowships, graduate traineeships, graduate research assistantships, graduate teaching assistantships, and other types of support. Features of our analysis. In this report we have aggregated subfields in the GSPSE to arrive at a classification closely corresponding to that of the R&D data. We use the GSPSE category of “Health Fields” as most comparable to the Federal Funds category of “Medical Sciences.” SURVEY OF EARNED DOCTORATES (SED) (http://www.nsf.gov/sbe/srs/ssed/start.htm) The doctoral survey is a census of individuals receiving research doctorate degrees from U.S. institutions since 1958. Graduate schools are responsible for collecting questionnaires from doctoral recipients and submitting them to be compiled in the Doctorate Records File (DRF), which maintains data on the number and characteristics of all recipients since 1958. The population for the 1999 survey consisted of all individuals receiving a first research doctorate from a U.S. academic institution in the 12-month period ending on June 30, 1999. The total 3   Reporting on a workshop requested by the Senate Commerce, Science, and Transportation Committee, the Congressional Research Service of the Library of Congress concluded: There is general agreement among the workshop participants that the source of the discrepancy is a result of a changing research environment—such as more cooperative research ventures under which a significant fraction of the funds received by universities can be counted twice. As funds get transferred between different academic institutions involved in joint research efforts or between different parts of the same institution, tracking the funds becomes more difficult and can lead to double counting….The (federal) agencies believe that they can accurately account for R&D funds obligated to universities. Michael E.Davey and Richard E.Rowberg. January 31, 2000. Challenges in Collecting and Reporting Federal Research and Development Data, p. 17. Washington, D.C.: Congressional Research Service.

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Trends in Federal Support of Research and Graduate Education universe consisted of 41,140 persons in approximately 392 institutions. Variables. The DRF contains a wide range of data on the demographic characteristics, citizenship status, educational history, field of study, financial support, and planned employment of doctorate recipients. Field of study. Major fields and subfields in the SED are roughly comparable to those of the Federal Funds Survey with one exception. The SED collects data on fine fields within the major field of earth, atmospheric, and ocean sciences. However, published tables on citizenship status do not disaggregate this major field. Citizenship status. The DRF provides five citizenship categories: native-born U.S. citizen, naturalized U.S. citizen, permanent resident, temporary visa holder, and unknown citizenship. Trends in permanent and temporary visa holders can be divergent, as they were in the 1990s, for idiosyncratic political reasons. The Chinese Student Protection Act of 1992, which allowed Chinese students in the U.S. at the time of the Tianamen Massacre to become permanent residents, generated a dramatic shift in Chinese Ph.D.’s away from temporary to permanent visa status. The overall trend in foreign students’ enrollment in doctorate programs is best observed by looking at the larger category of non-U.S. citizens. The citizenship variable has also been clouded in recent years by a significant increase in the “citizenship unknown” category.4 Features of our analysis. For cross-survey comparison, the component fields of geology, atmospheric sciences, and oceanography in data from the Federal Funds Survey and the Survey of Graduate Students and Postdoctorates have been aggregated to match the DRF data. We also aggregate the native born and naturalized citizens into one U.S. citizen category and temporary visa holders and permanent residents into one non-U.S. citizen category. SURVEY OF STATE RESEARCH AND DEVELOPMENT EXPENDITURES: FY1995 The state R&D survey was a one-time NSF/SRS-sponsored survey conducted and published by the State Science and Technology Institute of the Battelle Memorial Institute in Columbus, Ohio (STTI/BMI). The survey identified only directly targeted R&D funds, not general education purpose funds used by universities for research expenses or to cover the indirect costs of research. Previous intermittent NSF surveys of state agency R&D excluded funds directly appropriated to academic institutions, making comparisons over time difficult if not impossible. Character and field of research. The SSTI/BMI survey asked respondents to categorize research into major fields but not subfields, to characterize research as basic, applied, or development, and to further distinguish research by budget function such as health, agriculture, economic development, and support of the science and technology infrastructure. Thus, respondents reported the share of engineering research directed at economic development (20 percent) and the share of biological research directed at agricultural production (35 percent). Uncharacterized research. State respondents were able to employ a “not elsewhere classified” category, overall representing about 21.1 percent of research reported in the 1995 survey. FOUNDATION GIVING TRENDS The private nonprofit Foundation Center compiles reports from a sample of approximately 1,000 large independent, corporate, and community foundations, most recently in 2000. The sample was expanded in 1991 to include more smaller and corporate foundations, introducing a discontinuity in the data series. Excluded from the sample are grants by wealthy individuals and expenditures of private research institutes (e.g., Howard Hughes Medical Institute) whether or not established by philanthropic bequests. Classification of grants. Expenditures are classified by function such as art and culture, education, and health. “Science and technology” is further distinguished as general science, physical science, technology, life science, and “other;” but general science includes grants to improve science education below the college level. “Medical research” is a subcategory of health rather than science and technology. In general, interpretation of the data is complicated by the fact the same expenditures may be reported under two or several categories. In the case of the physical sciences, year to year fluctuations are common and attributable to the fact a number of large foundation donors (e.g., Keck, Kellogg) primarily fund large capital projects. SURVEY OF INDUSTRIAL RESEARCH AND DEVELOPMENT (http://www.nsf.gov/sbe/srs/srs01410/start.htm) NSF/SRS has sponsored and the Bureau of the Census has conducted an annual industry survey since 1953. The survey is directed to the central corporate headquarters of U.S.-based public and privately held, U.S.- and foreign-owned corporations and asks them to report separately annual corporate domestic spending on R&D regardless of business unit or product or service lines, together with sales, employment, numbers of employed scientists and engineers, and cost of R&D per scientist/engineer. Respondents are asked to identify funds from the federal government, the principal source of non-self-financed R&D. But 4   A.Sanderson and B.Dugoni. Summary Report 1997: Doctorate Recipients from United States Universities, p. 18. Chicago: National Opinion Research Center.

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Trends in Federal Support of Research and Graduate Education R&D performed in-house is not distinguished from contract R&D or grants to non-profit institutions. As a Census Bureau survey the identity of respondents is strictly confidential. Data are not reported where their publication might reveal the identity of the single or a small number of respondents. Character of research. Activity is classified as basic research, applied research, or development according to standard definitions that are uniform across NSF/SRS R&D surveys. Classification. Respondents and responses are classified according to the U.S. Standard Industry Classification (SIC) code at the three- and four-digit levels. From one survey to another, a firm may shift from one classification to another either because of acquisition or because of a shift in business emphasis (e.g., computer manufacturing to computer services), but all of its R&D falls in a single classification regardless of how diversified its business operations. Because of the confidentiality requirement, reclassifications of firms are not made public. In 1999 firms were classified under a new scheme, the North American Industry Classification System (NICS). To avoid a sharp discontinuity in the data series, NSF/SRS reclassified the data from the previous two calendar years, 1997 and 1998, but cannot assure users that the adjusted data are strictly comparable to the 1999 results. COMPUSTAT R&D DATABASE An alternative source of industrial spending data is the the Standard and Poor’s Compustat database, which contains information required to be reported annually to the U.S. Securities and Exchange Commission (SEC) on so-called 10K forms by publicly held firms headquartered in the United States. Banks, utilities, and insurance companies are not required to report R&D expenditures. In addition to domestic and foreign R&D spending, the information includes other characteristics such as corporate sales, employment, exports, foreign sales, profits, and capital investment. Because the data are mandatory and public, they are available more quickly than NSF survey results and the respondents can be identified. On the other hand, basic and applied research and development are not distinguished and therefore the data are not used in this analysis.5 5   For a Compustat-based analysis of the distribution of R&D by field see Carl Shepherd and Steven Payson. 1999. U.S. Corporate R&D Vol. I: Top 500 Firms in R&D by Industry Category. Washington, D.C.: U.S. Department of Commerce and National Science Foundation. This analysis is being updated.

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