Special Report

10 Universities Spending Billions on R&D

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U.S. universities and colleges spent a combined $68.8 billion on research and development in 2015. R&D spending is highly concentrated among the top research universities, with the top 20 schools accounting for more than 30% of all research expenditure among institutions of higher education in the U.S.

To identify the universities investing the most in research and development, 24/7 Wall St. reviewed R&D expenditure by university for the 2015 fiscal year with data from the National Science Foundation. Of the 1,871 major colleges and universities reviewed, 10 schools spent more than $1 billion on R&D.

Before World War II, university research was primarily funded by local industry, nonprofits, and the university’s internal funds. World War II, however, created a need for increased scientific research. The National Defense Research Committee was formed in 1940, funding such notable research as the Manhattan Project and establishing the current model of federal funding for university research. Today, a range of departments, including the Department of Health and Human Services, the Department of Defense, and the National Science Foundation, fund university research.

Click here to see the 10 universities spending billions on R&D.

Federal funding currently accounts for the largest portion of R&D funding for many of the largest research universities. In seven of the 10 universities spending more than $1 billion on R&D, federal funding accounts for more than 50% of all R&D expenditure.

The reliance on federal funding for universities has been declining, however. In 1972, the federal government funded 69% of university research budgets. By 2015, federal R&D funding accounted for just 55% of total university research spending, the lowest share on record.

The decline is not due to reduced federal R&D funding, but is rather the result of an expansion of nonfederal funding sources. R&D funding from businesses, nonprofits, and university coffers has increased at twice the rate of federal funding since 1972.

R&D at the top research universities is heavily concentrated in the life sciences and engineering. Of the $68.8 billion spent on R&D by all U.S. colleges and universities in 2015, 56.5% was dedicated to the life sciences — primarily medicine — and 16.1% to engineering.

Universities receiving the most federal funding for engineering R&D often have a University Affiliated Research Center on campus. The Applied Physics Laboratory at Johns Hopkins University, for example, was established by the Department of Defense in 1942 and accounted for $1.3 billion of the university’s $2.3 billion R&D expenditure in 2015. While most universities that receive large amounts of federal R&D funding do so through grants, the APL at Johns Hopkins is primarily a defense contractor. Other DoD-funded UARCs exist at the University of Washington, Penn State, Georgia Tech, and 10 other universities.

R&D spending tends to correlate with innovation. Seven of the 10 universities spending more than $1 billion on research annually are also among the 10 universities that were awarded the most patents in 2015. The University of California system, which contains three universities that each spend more than $1 billion on R&D, was awarded 489 patents in 2015 — at least 200 patents more than any other university.

To identify the universities receiving the most federal funding, 24/7 Wall St. reviewed the total R&D expenditure for 1,871 major universities for the 2015 fiscal year from the National Science Foundation. Total R&D spending by each university, the academic departments receiving funds, and the sources of federal funds by federal agency also came from the NSF. University endowment data came from the National Association of College and University Business Officers and are for the 2016 fiscal year. Enrollment figures were gathered on a case by case basis from university websites, and are the most recent fall enrollment figures provided by each institution.

These are the 10 universities spending billions on R&D.

Source: Thinkstock

10. Harvard University
> Annual R&D expenditure: $1.01 billion
> 2015 enrollment: 29,652
> 2016 endowment: $34.54 billion

Harvard University spent a total of $1.0 billion on R&D in 2015, more than nearly any other institute of higher education. While most university research is funded by government and private sources and is dedicated to science and engineering, Harvard’s $34.5 billion endowment — the largest of any school — may allow the university more independence in its academic pursuits. Harvard dedicated 9.6% of its total R&D budget to social sciences in 2015, nearly three times the 3.4% average share for all colleges and universities. Most of Harvard’s social science R&D is in the field of political science and financed by the university’s internal funds. Harvard spent $284.1 million of its own money on R&D in 2015, more than all but two other universities.

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9. University of California, Los Angeles
> Annual R&D expenditure: $1.02 billion
> 2015 enrollment: 41,908
> 2016 endowment: $1.80 billion

The largest of the 10 schools in the University of California system, UCLA spent over $1 billion on R&D in 2015. Roughly $7 in every $10 spent on R&D by the university went to life sciences research, one of the highest such proportions of any higher education institute. The lab receiving the most funding on campus is the UCLA Clinical and Translational Science Institute, a biomedical research partnership that has attracted more than $150 million from the National Institutes of Health since 2011. LIke many large research universities, UCLA recently founded a campus nonprofit — the Westwood Technology Company — to help transition student and faculty research projects into licensed commercial products. The UC system was awarded 489 patents in 2015, more than any other academic body worldwide.

Source: Thinkstock

8. Stanford University
> Annual R&D expenditure: $1.02 billion
> 2015 enrollment: 16,980
> 2016 endowment: $22.40 billion

Stanford University spent over $1 billion on R&D in 2015. An estimated 63% of the university’s R&D budget was dedicated to life sciences, 13% to engineering, and 9% to physical sciences. Roughly $675.9 million of the school’s R&D expenditure was funded by the federal government, the second most of any private university. The Department of Health and Human Services accounted for 66% of Stanford’s federal funding, and the Department of Defense accounted for 12%. The high R&D spending has likely yielded a number of patents and inventions. Stanford students and faculty were awarded a total of 205 patents in 2015, more than any university body other than MIT and the University of California system.

7. Duke University
> Annual R&D expenditure: $1.04 billion
> 2015 enrollment: 15,984
> 2016 endowment: $6.84 billion

Duke University received $240.6 million, or nearly a quarter of its R&D budget, from private businesses in 2015, more than any other college or university in the country. One of the largest recipients of corporate funding on campus is the Duke Clinical Research Institute. The DCRI, a contract research organization that has conducted more than 970 clinical trials in medical areas such as cardiovascular, respiratory, and pediatric research, receives 65% of its funding from private industry sources. In addition to the $856.0 million Duke spent on research in the life sciences, the university dedicated $85.6 million to engineering and $25.7 million on the social sciences.

Source: Thinkstock

6. University of Wisconsin-Madison
> Annual R&D expenditure: $1.07 billion
> Enrollment: 43,338
> 2016 endowment: $2.42 billion

The University of Wisconsin-Madison spent nearly $1.1 billion on R&D in 2015. The Department of Energy funds over $60 million of the school’s R&D expenditure, more than nearly any other university. One of the largest recipients of funding on campus is the Great Lakes Bioenergy Research Center, a DOE-funded institute housed within the Wisconsin Energy Institute dedicated to the study of advanced cellulosic biofuels. The center has received $265 million in DOE grants since its founding in 2007, and has yielded more than 50 patents. As a whole, the University of Wisconsin-Madison was awarded 161 patents in 2015, the sixth most of any university system nationwide.

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5. University of California, San Diego
> Annual R&D expenditure: $1.10 billion
> Enrollment: 35,816
> 2016 endowment: $536.13 million

The University of California, San Diego spent $1.1 billion in R&D in 2015. Private funds and charitable gifts accounted for 10% of the school’s total R&D expenditure that year, one of the largest shares of any university. The school recently embarked on a campaign to raise a record $2 billion in private donations over the next decade. The effort received a boost in March 2017, when UCSD alumnus Taner Halicioglu donated $75 million to his alma mater to establish the Halicioglu Institute of Data Science on campus. Recent private support has also helped to launch the Microbiome and Microbial Sciences Initiative and the Contextual Robotics Institute on campus. The school dedicated 4.1% of its total R&D budget to math and computer sciences, 15.4% to environmental sciences, and 58.3% to life sciences — larger shares than at a majority of U.S. universities.

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4. University of California, San Francisco
> Annual R&D expenditure: $1.13 billion
> Enrollment: 3,141
> 2016 endowment: $1.14 billion

The smallest of the 10 schools in the UC system, the University of California, San Francisco is the only UC school without an undergraduate program and is focused exclusively on the health sciences. Despite having only 3,141 students enrolled as of Fall 2016, UCSF spent $1.1 billion in R&D that year. Most of the university’s R&D activity occurs at the UCSF School of Medicine. Some 95% of UCSF’s R&D expenditure is dedicated to medical research, and 61% is funded by the Department of Health and Human Services. The collaboration has spawned a number of startups and inventions by UCSD faculty and students. UCSF research has yielded more than 185 startup companies and over 1,700 health-related inventions. The University of California system was awarded 489 patents in total in 2015, the most of any school system worldwide.

Source: Thinkstock

3. University of Washington
> Annual R&D expenditure: $1.18 billion
> Enrollment: 44,786
> 2016 endowment: $2.97 billion

The University of Washington spent $1.2 billion on R&D in 2015. Approximately 10% of the university’s research budget was dedicated to the environmental sciences, one of the larger shares of any university. More than half of all spending on environmental science R&D occurs at the UW School of Oceanography, which in 2014 completed construction of the nation’s first underwater cabled observatory. The project was started in 2009 with a $239 million grant from the National Science Foundation. While the NSF funded 11% of the school’s total R&D expenditure in 2015, the Department of Health and Human Services funds another 50%. UW received a total of $906.8 million in R&D funding from the federal government in 2015, the second most of any university.

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2. University of Michigan
> Annual R&D expenditure: $1.37 billion
> Enrollment: 44,718
> 2016 endowment: $9.74 billion

The University of Michigan spent $1.4 billion on R&D in 2015. The school dedicated $149.8 million to research in the social sciences, more than any college or university nationwide. The UM Institute of Social Research has made a number of significant contributions to the field in its 68-year history, among them the trials that confirmed the Salk polio vaccine was safe for public use and the foundation of the study of organizational behavior. In addition to the 11% of the school’s R&D expenditure that was dedicated to social science research, 57% went to the study of life sciences such as medicine and biology. Michigan received a total of $735.5 million in federal R&D funding in 2015 from a range of agencies, including the Department of Health and Human Services, the Department of Defense, and NASA.

Source: Thinkstock

1. Johns Hopkins University
> Annual R&D expenditure: $2.31 billion
> Enrollment: 24,277
> 2016 endowment: $3.38 billion

The federal government funded $1.9 billion of Johns Hopkins University’s $2.3 billion R&D expenditure in 2015, making it the largest university research partner of the United States. Most R&D activity on campus takes place at the Applied Physics Laboratory. Primarily a federal contractor, the APL has conducted research in missile defense, space, and weapons systems for the Department of Defense since the lab’s founding in 1942. The APL spent $1.3 billion on R&D in 2015, accounting for 58% of Johns Hopkins’s total research budget. Roughly 35% of Johns Hopkins R&D is funded by the DoD, and 9% by NASA. The collaboration has yielded some of the university’s most significant research accomplishments, including the first spacecraft to land on an asteroid and the first full color photograph of the Earth.

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