- Federal R&D funding has steadily declined over six decades as a percentage of GDP, and from 2010 to 2019 the federal share of total R&D funding dropped by nearly a third.
- The paper argues that private R&D remains vital for commercialization, while federal R&D should provide patient capital for public-good and national-security priorities with longer development timelines.
- China increased total R&D investment by more than ten percent to approximately $421 billion in 2022 and uses state-directed mechanisms to align funding with national technology goals.
- The paper recommends increasing overall federal R&D spending to one percent of GDP by 2030 and fully appropriating CHIPS and Science Act authorized funding levels.
- The paper endorses a non-defense AI R&D target of $32 billion in Fiscal Year 2026, with funding rising to $8 billion and doubling annually for the next three fiscal years.
This January 2024 paper frames federal research and development funding as a central requirement for U.S. technological leadership, national security, and economic growth. It builds its argument through historical examples, including the Apollo Program and Operation Warp Speed, then contrasts current U.S. funding trends with China’s expanding R&D investments and state-directed technology priorities. The paper argues that federal R&D funding has declined as a share of GDP over six decades and that government support remains necessary for basic research, patient capital, and public-good investments that private R&D is less likely to sustain. It identifies AI and AI-enabled scientific discovery as especially important because the technology cuts across strategic sectors and intensifies global competition. The paper recommends three main pathways: increasing overall federal R&D spending to one percent of GDP by 2030, bolstering non-defense AI R&D to reach $32 billion in Fiscal Year 2026, and improving the federal funding process through more agile, risk-tolerant, and flexible mechanisms. Its policy relevance lies in linking appropriations, interagency coordination, and funding-process reform to the United States’ ability to invent, adopt, and shape emerging technologies.
History has a powerful message: when the United States has the proper resources and political will, it can conquer any technological challenge.
SCSP
- Increase overall federal R&D funding to one percent of GDP by 2030. It is imperative that the United States fully appropriates the authorized funding levels outlined in the CHIPS and Science Act.
- Bolster non-defense AI R&D funding to reach $32 billion in Fiscal Year 2026. Federal funding for non-defense AI R&D should increase to $8 billion and continue to double annually for the next three fiscal years.
- Continue to explore ways to improve the federal funding process. It is time for a revitalized federal funding process that is agile and matches the new, quick-paced era of scientific discovery.
Published by the Special Competitive Studies Project. Co-publishers and external authors, where they exist, are credited in the byline above.