The closely watched study also predicts that overall European R&D will grow by about 3.5 percent while North American R&D will grow by 2.8 percent. 

Experts from Battelle and R&D Magazine forecast that a 2.1 percent growth in United States R&D expenditures will be balanced against an estimated 2 percent inflation rate, suggesting that U.S. R&D investments will remain flat in real terms over the next year. That $436 billion in forecasted spending is expected to be broken down in the following way:  U.S. private industry will spend by far the largest amount with a projection of $279.6 billion in R&D in 2012, up 3.75 percent over 2011; U.S. federal government spending will reach $125.6 billion in 2012, a decrease of 1.16 percent; academia in the United States will spend $12 billion on research in 2012, up 2.85 percent over last year; non-profits will increase spending in 2012 by 2.7 percent to $14.5 billion; and other government entities in the United States will round out total R&D expenditures by increasing 2.72 percent to $3.8 billion. 

Another notable trend the forecast reveals is the increased expectation that R&D investments will provide financial returns and positive commercial outcomes. Several years ago, only 10 percent of U.S. industries calculated return on investment (ROI) from R&D efforts, while data from a survey that is part of the forecast now indicates that 40 percent measure that figure. 

With 18 U.S. corporations among the top-50 firms ranked by R&D spending, the United States remains dominant in manufacturing R&D. However, translating this level of R&D and innovation into output, products and jobs is a challenge faced by both U.S. corporations and government. There is wide agreement that technology collaborations are important to growth, with many manufacturers planning on increasing collaborative activity such as knowledge sharing, shorter development cycles and the availability of proprietary technologies. 

Survey respondents identified the top three ways government could help support manufacturing R&D as: providing tax credits to companies with active R&D programs, supporting academic R&D in manufacturing and increasing tech transfer support from U.S. national labs to industry. 

R&D in the broadly defined chemicals and materials industry is expected to grow by 11.4 percent in the United States to $9.3 billion in 2012, while growing by 3.8 percent globally to $33.8 billion. 

Nanotechnology and its applications continue to pervade all industrial applications with biomedical applications beginning during the past two years. More than 15 U.S. government agencies propose funding $2.13 billion in nanotechnology research including DOE at $611 million, the National Institutes of Health at $465 million, the National Science Foundation at $456 million and the Department of Defense at $368 million. 

An emerging priority in advanced materials is a heightened focus on developing alternative sources or processes related to rare earth metals because of China's recent export limits on supplies. In the industrial sector around the world, closed non-Chinese rare earth mines are being re-opened; however, the environmental requirements for operating these mines have increased since they closed, making additional R&D and capital expenditures necessary to develop new and improved processing programs. 

Hard copies of the full R&D Funding Forecast report are available by contacting Sandy Walker at 614/424.7619 or at walkers@battelle.org. The full Global R&D Funding Forecast can be found at http://www.battelle.org/ABOUTUS/rd/2012.pdf.