Health R&D Still Getting Top Priority

A quick look through Obama’s proposed 2011 budget shows that nondefense health R&D is still getting top priority over nondefense nonhealth R&D–that is, pretty much everything else. Take a look at this chart:

The Obama budget continues the trend of the Bush years–a rising share of GDP going for health R&D, while federal nonhealth nondefense R&D is basically flat as a share of GDP. Nonhealth R&D includes space, energy, environment, information technology, physics, chemistry, and pretty much the whole range of science and technologies, outside of the life sciences.

Since FY 2001, funding for health R&D has exceeded funding for nonhealth nondefense R&D, and the gap has been growing. The President’s proposed budget for 2011 calls for nondefense health R&D to exceed nondefense nonhealth R&D by 31%.

Given that the Obama Administration has made green technologies a priority, it’s worth looking at federal funding for potentially ‘green’ R&D: Transportation, energy, natural resources, and environment.

This chart shows federal nondefense R&D spending in these key areas, as a share of GDP. Certainly it’s on an uptick compared to the 2006-2008 lows. But even then, the 2011 level of funding for transportation/energy/environment R&D, measured as a share of GDP, is roughly half where it was in 1992.

If you believe that the U.S. is falling behind in nonhealth science and technology, these charts suggest one reason why.

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About Michael Mandel 126 Articles

Michael Mandel was BusinessWeek's chief economist from 1989-2009, where he helped direct the magazine's coverage of the domestic and global economies.

Since joining BusinessWeek in 1989, he has received multiple awards for his work, including being honored as one of the 100 top U.S. business journalists of the 20th century for his coverage of the New Economy. In 2006 Mandel was named "Best Economic Journalist" by the World Leadership Forum.

Mandel is the author of several books, including Rational Exuberance, The Coming Internet Depression, and The High Risk Society.

Mandel holds a Ph.D. in economics from Harvard University.

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