In the following ten pages the Battelle/R&D Magazine team presents information on five key industry segments within the U.S. and global R&D enterprise. These five have been examined over the past two forecasts, allowing us to identify and interpret the underlying trends and drivers of these segments’ R&D spending.

The data developed for each of these segments include a detailed look at R&D spending of the leading U.S. firms, a discussion of results from our surveys of these segments’ firms, our U.S. and global R&D forecasts for each of these segments, and brief narratives describing key developments or issues that will shape the segments’ R&D investment plans for 2013.

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Data for the U.S. leading R&D firms is obtained from public financial reports, with fiscal year quarters adjusted to the closest calendar year quarter. The firms were surveyed over the last six months regarding various aspects of their R&D performance and outlook. The specific forecasts are strongly tied to generally flat U.S. and global economic projections. As they are often leading-indicator industries, a number of these segments could return to more robust pre-recession growth rates if the economy improves more than expected in early 2013.

Economic Concern But R&D Commitment Remains
Industry respondents to our surveys are slightly more optimistic about 2013 than they were about 2012, but 54% of the respondents report that the global economic slowdown has caused them to rethink their 2013 R&D budgets. Still, only 29% of the respondents expect their R&D budgets to decline in 2013. Stable budgets are expected by 25%, with 46% expecting budget increases in 2013 (though the majority of those expect increases of less than 5%).

As expected, salaries will account for the largest share of these 2013 budgets at 48%, with supplies and consumables accounting for 13%. Capital equipment and non-capitalized instrumentation and other equipment will account for 10% and 6%, respectively. Outsourcing or external consultants will capture 7% of the budget. Finally, overhead and other expenditures will account for 10% and 6% of the budget, respectively. Within these staffing budgets, industry respondent’s hiring plans are more optimistic than not, with 43% expecting to add R&D staff in 2013, while 24% expect staffing levels to decline.