U.S. research and development (R&D) spending rose to $477.7 billion in 2014—an increase of $21.1 billion over the previous year—and is estimated to have hit $499.3 billion in 2015, according to a new report from the National Center for Science and Engineering Statistics (NCSES).

The NCSES report examines two different aspects of the U.S. system: the "performance" of R&D by businesses, government agencies, higher education institutions and other organizations, and the funding sources used by these sectors to perform that R&D.

U.S. R&D spending by businesses, government agencies, higher education institutions and other organizations is estimated to have reached almost $500 billion in 2015. Image credit: Pixabay. Adjusted for inflation, growth in U.S. total R&D performance averaged 1.2% annually between 2008 and 2014, NCSES reports, matching the average pace of U.S. gross domestic product. The NCSES data show increases of $20.4 billion in 2013, $21.1 billion in 2014 and an estimated $21.6 billion in 2015. Broken down by category, U.S. R&D performance in 2014 comprised experimental development ($300.1 billion), applied research ($93.6 billion) and basic research ($84 billion).

The business sector was by far the largest performer of U.S. R&D, accounting for $340.7 billion, or 71% of the total in 2014. The higher education sector was the second-largest performer, with universities and colleges performing $64.7 billion of R&D, or 14% of the total in 2014. The federal government conducted $52.3 billion, or 11%, of U.S. R&D.

NCSES reports that the business sector was the largest funder of R&D, accounting for $318.6 billion of the 2014 total of $477.7 billion. Nearly all of the business sector's funding—98%—was directed at R&D performed by businesses.

The federal government was the second-largest funder, at $119.8 billion. The federal government directed $34.4 billion of its funding to R&D at agencies, $34.1 billion to academic institutions, $26.6 billion to businesses and $17.5 billion to federally funded research and development centers.