Scientific Research and Development Services Industries

Significant Points

Nature of the Industry[About this section] [To Top]

Goods and services. From carbon nanotubes to vaccines, workers in the scientific research and development services industry create today the technologies that will change the way people live and work in the future. The importance of this industry is demonstrated by the considerable attention paid to it by the press, business associations, politicians, and financial markets. Major discoveries are heralded in both the technical and the popular media, and many studies monitor the pace of research and development. New technologies can quickly revolutionize business and leisure, as the Internet has.

Industry organization. Research and development (R&D) comprises three types of activity—basic research, applied research, and development. Basic research is conducted to further scientific knowledge without any direct application. This sort of research typically involves a high level of theory and is very risky; many projects fail to produce useful or novel results. Due to this risk, and because it is difficult to determine in advance what new products, if any will result, most basic research is funded by government, universities, or nonprofit organizations. Applied research is the bridge between science and business. It is directed toward solving some general problem, but may produce several viable options that all achieve some aspect of the goal. Development, which accounts for more than half of all R&D spending, according to the National Science Board, then refines the technologies or processes of applied research into immediately usable products. Most development is done by private industry and is generally oriented toward manufacturing. Nearly everything consumers use, from antibiotics to zoom lenses, is a product of basic research, applied research, and development.

This industry includes diverse fields. The most fundamental division of the scientific research and development services industry is that between R&D in the physical, engineering, and life sciences and R&D in the social sciences and humanities. Important areas of research and development in the physical, engineering, and life sciences fields include biotechnology; nanotechnology; pharmaceutical; chemical and materials science; electronics; aerospace; and automotive. Important fields of research and development in the social sciences and humanities include economics, sociology, anthropology, and psychology.

Biotechnology is among the most active fields of research. Work in this area seeks to understand and use the fundamental processes of cellular life to develop more effective medicines, consumer products, and industrial processes. Advances in biotechnology have led to new drugs and vaccines, disease-resistant crops, more efficient enzymatic manufacturing processes, and novel methods of dealing with hazardous materials. Bioinformatics, a branch of biotechnology using information technologies to work with biological data like DNA, is a particularly vibrant new field. Much of the interest in biotechnology has derived from the medical applications of its basic and applied research.

Nanotechnology is perhaps even more of an emerging field than biotechnology, and they often overlap in their work on the molecular level, such as with DNA tagging. Nanotechnology is the study of new structures roughly on the same scale as individual atoms, or one millionth of a millimeter. At this size, materials behave differently and can be made into new structures such as quantum dots, which are small devices that behave like artificial atoms and can be used to tag sequences of DNA. These materials can also be used to make nanoscopic switches for electronics, or produce extremely small lasers for communications equipment. Because basic and applied research comprise the bulk of work, there are fewer immediate applications of nanotechnology.

Pharmaceutical R&D involves the discovery of new drugs, antibiotics, and vaccines to treat or prevent a wide range of health problems. This field also has benefited greatly from advances in biotechnology, nanotechnology, and chemistry, allowing better models of biochemical processes and more efficient testing. Because a great deal of time is required to develop a new treatment, most companies have several major programs running concurrently, in what is sometimes referred to as the development "pipeline." Because many projects incorporate all aspects of R&D, the pharmaceuticals field tends to do more basic research than other established fields. (See the statement on pharmaceutical and medicine manufacturing.)

Chemical and materials science R&D focuses on the design and creation of new molecules or materials with useful properties. By researching and modeling the properties of molecules under various conditions, scientists in this field can develop new chemical structures that are stable or volatile, rigid or flexible, insulating or conductive. Since chemical R&D is important to many technologies, it can include work on computer chip manufacturing, composite materials development, or pollution reduction through chemical treatment. Research on petroleum derivatives and substitutes continues to be an important part of this field. Chemical R&D also plays a large role in both biotechnology and nanotechnology R&D.

Electronics R&D incorporates a broad range of technologies, including computer hardware, telecommunications, consumer electronics, automated control systems, medical equipment, and electronic sensing. R&D in this field leads to advances that make electronic systems faster, and more reliable, compact, useful, powerful, and accessible. Development of new technologies and the integration of these technologies into new systems account for much of the R&D in this field. Basic research in areas like electromagnetics and photonics also is a significant part of the work.

Aerospace R&D relates to aircraft, spacecraft, missiles, and component parts and systems. A significant portion of aerospace R&D is federally funded, with the Department of Defense and the National Aeronautics and Space Administration (NASA) supporting most of the work. Civil aerospace R&D ranges from developing more efficient passenger aircraft to designing private spacecraft to launch satellites or transport humans into space.

Automotive R&D creates new vehicles and systems that are more efficient, powerful, and reliable. While automotive R&D may be directed toward the integration of new technologies into vehicles, much research also is done on improving the individual components such as LED headlights or fuel injectors. As electronic technology has advanced, so have automotive designs. The incorporation of computer systems both for monitoring performance and as separate features has added a new dimension to R&D in this field. With the demand for more efficient vehicles that provide more power while using less fuel, a good deal of time and many resources are devoted to developing new powertrains, such as those for hybrid-electric vehicles.

R&D in the social sciences and humanities is more closely aligned with specific occupations than it is in the physical, engineering, and life sciences. Economic research typically involves monitoring and forecasting economic trends relating to issues such as business cycles, competitiveness of markets, or international trade. Sociological research analyzes the institutions and patterns of social behavior in society, and the results are used mainly by administrators to formulate policies. Anthropological research focuses on the influence of evolution and culture on all aspects of human behavior. Psychological research studies human thought, learning, motivation, and abnormal behavior.

Recent developments. Since the scientific research and development services industry is continuously on the cutting edge of knowledge, it is constantly evolving. New technologies and research methods, such as nanotechnology and biotechnology in recent years, have opened new avenues of research. Similarly, recent advances in fundamental understanding of genetics, chemistry, and physics have led to the development of new technologies.

Working Conditions[About this section] [To Top]

Hours. In 2008, workers in scientific research and development services averaged 38.6 hours per week, compared with 33.6 for workers in all private industries. The average for research and development in the physical, engineering, and life sciences was 39.2, while the average for research and development in the social sciences and humanities was only 33.5.

Work environment. Most workers in this industry work in offices or laboratories; the location and hours of work vary greatly, however, depending on the requirements of each project. Experiments may run at odd hours, require constant observation, or depend on external conditions such as the weather. In some fields, research or testing must be done in harsh environments to ensure the usefulness of the final product in a wide range of environments. Other research, particularly biomedical research, is conducted in hospitals. Workers in product development may spend much time building prototypes in workshops or laboratories, while research design typically takes place in offices.

Although there generally is little risk of injury or illness due to the working conditions, certain fields require working with potentially dangerous materials. In such cases, comprehensive safety procedures are strictly enforced.

Employment[To Top]

Scientific research and development services provided 621,700 jobs in 2008. Research and development in the physical, engineering, and life sciences accounted for about 90 percent of the jobs; the rest were in research and development in the social sciences and humanities.

Workers in this industry conduct much, but not all, of the scientific research and R&D in the economy. Under the North American Industrial Classification System (NAICS), each establishment is categorized by the activity in which it is primarily engaged; an establishment is defined as a single physical location where business is conducted or services are performed. This means that much of the R&D conducted by companies in a wide range of industries—such as pharmaceuticals, chemicals, motor vehicles, and aerospace products—is conducted within the scientific research and development services industry, because many companies maintain laboratories and other R&D facilities that are located apart from production plants and other establishments characteristic of these industries. While workers in separate R&D establishments are classified in the scientific research and development services industry, some R&D occurs in establishments that mainly engage in other activities, such as manufacturing or educational services. The latter type of R&D is not included within the scientific research and development services industry.

Although scientific research and development services can be found in many places, the industry is concentrated in a few areas. Just seven states—California, New York, Massachusetts, Illinois, Maryland, Pennsylvania, and New Jersey—account for more than half of all employment in the industry. Although there are many small establishments in this industry, 55 percent of employment was in establishments with more than 250 workers in 2008.

Occupations in the Industry[To Top]

Professional and related occupations account for 60 percent of employment in this industry, including 13 percent in computer and mathematical sciences occupations, 12 percent in engineering occupations, 10 percent in life science occupations, and 6 percent in physical science occupations (table 1).

Life, physical, and social science occupations. These workers form the core of the research operations in the industry. Biological scientists conduct research to understand biological systems, develop new drugs, and work with genetic material. Many work for pharmaceutical or biotechnology companies; others perform their research in Federal or academic laboratories. Medical scientists research the causes of health problems and diseases, and then use this information to develop medical treatments and preventive measures. Their work is similar to that of biological scientists, but with a specific emphasis on research to benefit human health. Chemists and materials scientists research the nature of chemical systems and reactions, investigate the properties of materials, and develop new products or processes using this knowledge. They perform research used by a broad array of industries to develop new products. Along with chemists, physicists and materials scientists conduct basic and applied research on nanotechnology. Social scientists, such as economists, market and survey researchers, sociologists, and anthropologists, perform research on human behavior and social interaction. Science technicians, sometimes called research assistants, assist scientists in their research and typically specialize in an area of research. They may set up and maintain lab equipment, monitor experiments, record results, or interpret collected data.

Engineers and computer specialists. Engineers and computer specialists usually are involved in applied research or in development. Engineers design, produce, and evaluate solutions to problems, either by creating new products or refining existing ones. They apply the most current research findings to develop more efficient products or processes of manufacture. Engineering technicians assist engineers in preparing equipment for experiments, recording and calculating results, or building prototypes. Their work is similar to that of the engineers with whom they work, but is more limited in scope. Computer specialists, such as computer scientists, computer programmers, and computer software engineers, develop new computer technologies, programming languages, operating systems, and programs to increase the usefulness of computers. Their work may include integrating advances in computing theory into more efficient processing techniques.

Management, business, and financial occupations. These occupations account for 20 percent of the industry. Engineering and natural sciences managers plan, coordinate, and direct the activities of engineers, natural scientists, technicians, and support personnel to conduct research or develop new products. As with engineers and natural scientists, engineering managers tend to be involved in development, while natural science managers tend to be involved in basic research. Both use their technical expertise and business acumen to bridge the gap between goals set by top executives and the incremental work done by engineers and scientists.

Office and administrative support occupations. These workers comprise 12 percent of the industry's jobs and primarily handle general business administration and clerical work. Interviewers, except eligibility and loan, are particularly prevalent in research and development in the social sciences and humanities. They may be involved in soliciting and verifying information from individuals or groups for sociological, psychological, or market survey research, either in person or by phone. In the life sciences, they may collect and verify participant information for medical research.

Since the scientific research and development services industry deals mainly in innovation and design, there are relatively few jobs in production, installation, maintenance, repair, transportation, sales, or service occupations.

Table 1. Employment of wage and salary workers in scientific research and development services by occupation, 2008 and projected change, 2008-2018. (Employment in thousands)
Occupation Employment, 2008 Percent Change,
Number Percent
All Occupations 621.7 100.0 25.3
Management, business, and financial occupations 124.7 20.1 25.0
  General and operations managers 14.9 2.4 11.1
  Computer and information systems managers 6.0 1.0 24.8
  Engineering managers 9.0 1.5 25.3
  Management analysts 6.0 1.0 22.3
  Accountants and auditors 7.5 1.2 27.5
Professional and related occupations 371.8 59.8 27.1
  Computer software engineers 33.5 5.4 37.8
  Engineers 74.7 12.0 24.6
  Engineering technicians, except drafters 17.4 2.8 20.8
  Biological scientists 18.2 2.9 38.3
  Medical scientists, except epidemiologists 34.4 5.5 50.0
Office and administrative support occupations 74.9 12.1 17.6
  Financial clerks 7.0 1.1 21.3
  Information and record clerks 11.7 1.9 13.2
  Office clerks, general 10.9 1.8 21.2
NOTE: Columns may not add to totals due to omission of occupations with small employment.

Training and Advancement[About this section] [To Top]

Scientific research and development services rely heavily on workers with extensive postsecondary education. A larger percentage of workers in this industry have bachelor’s or graduate level degrees than in all other industries.

For most science and engineering occupations, a bachelor's degree is generally the minimum level of education, and a master's or Ph.D. degree is typically necessary for senior researchers. Some fields require a Ph.D. even for entry-level research positions, particularly in basic research. A bachelor's degree is sufficient for many types of work in development outside of the life sciences, but a master's degree is also common. Continuing training is necessary for workers to keep pace with current developments in their fields. It may take the form of on-the-job training or formal training, or it may consist of attending conferences or meetings of professional societies. Workers who fail to remain up to date in their field and related disciplines may face unfavorable job prospects if interest in their current area of expertise declines.

Science and engineering technicians may enter the industry without a bachelor’s degree, but some bachelor's degree holders begin as technicians before advancing to become researchers or pursuing additional education. Technicians usually begin working directly under a scientist, engineer, or more senior technician and advance to working with less supervision. Continuing on-the-job training is important in order to learn to use the newest equipment and methods. Some technicians become supervisors responsible for a laboratory or workshop.

For those with a Ph.D., a period of academic research immediately after obtaining the degree—known as a post-doctoral fellowship or "postdoc"—is increasingly preferred by employers. These postdocs may last several years with low salaries and little independence, effectively increasing the cost of doctoral degrees in time and forgone income. Once in the industry, workers with doctorates typically begin as researchers, conducting and designing research projects in their field of expertise with a fair degree of autonomy. With their research training and specialized expertise, scientists or engineers with doctoral degrees design, conduct, and analyze experiments or studies. To keep current in their fields, researchers often attend conferences, read specialized journals, and confer with colleagues in industry and academia.

As scientists or engineers gain expertise in a particular field of R&D, they may advance to more senior research positions or become managers. Those who remain in technical positions may undertake more creative work, designing research or developing new technologies at a higher level. Those in science and engineering management usually coordinate work in several disciplines or components of a project. As their careers progress, they manage larger projects and ensure the work aligns with the strategic goals of their organization. Nearly all managers are responsible for some aspect of funding and for meeting deadlines.

Self-employment is uncommon in scientific research and development services because of the high cost of equipment, but opportunities to start small companies do exist. These opportunities are particularly prevalent in rapidly growing fields, partly due to the availability of investment capital. Self-employed workers in scientific R&D typically have advanced degrees and have worked in academia or other research facilities and form companies to develop commercial products resulting from prior basic or applied research.

Outlook[About this section] [To Top]

Overall prospects for scientists and engineers should be favorable, although competition for basic and applied research funding is expected in many fields.

Employment change. Wage and salary employment in scientific research and development services is projected to increase by 25 percent between 2008 and 2018, compared with 11 percent employment growth for the economy as a whole. Demand for new R&D is expected to continue to grow across all major fields, although growth will be particularly strong in biotechnology and other life sciences research as increased demand for medical and pharmaceutical advances driven by an aging population will lead to increased R&D spending in these areas.

Significant job growth is expected among computer specialists, scientists, and engineers—particularly those in the life and medical sciences. With the aging of the population, the demand for lifesaving new drugs and procedures to cure and prevent disease will drive this demand. Biological scientists, for example, may be employed in biotechnology or pharmaceuticals, both growing areas. Many other scientists and engineers will be employed in defense and security R&D, also a growing field. As information technology continues to be an integral component of R&D, employment of computer specialists is expected to grow rapidly, particularly for those with some biological science background working in bioinformatics.

Job growth for office and administrative support occupations should be slower than growth of the industry as a whole as technology leads to greater efficiency in general office functions. Projected employment growth among professional occupations, on the other hand, is faster than overall industry growth, reflecting demand for scientists and engineers.

Job prospects. Overall prospects for scientists and engineers should be favorable, with better opportunities for scientists who have doctoral degrees, which prepare graduates for research. However, competition for basic and applied research funding is expected in all fields. Creativity is crucial, because scientists and engineers engaged in R&D are expected to propose new research or designs. For experienced scientists and engineers, it also is important to remain current and adapt to changes in technologies that may shift interest—and employment—from one area of research to another.

Most R&D programs have long project cycles that continue during economic downturns. However, funding of R&D, particularly by private industry, is closely scrutinized during these periods. Since the Federal Government provides a significant portion of all R&D funding, shifts in policy also could have a marked impact on employment opportunities, particularly in basic research and aerospace.

Earnings [About this section] [More salary/earnings info] [To Top]

Industry earnings. In 2008, nonsupervisory workers in scientific research and development services earned $1,269 per week on average, substantially higher than the $608 average for all private industries. The earnings of those engaged in research and development in the physical, engineering, and life sciences differ markedly from the earnings of those in research and development in the social sciences and humanities, with respective averages of $1,309 and $932.

Earnings also varied considerably by occupation, with workers in management and professional occupations earning more. This was similar to other industries. Occupations in the industry with higher earnings typically require higher levels of education and experience. Hourly wages for specific occupations in the industry are shown in table 2.

Table 2. Median hourly wages of the largest occupations in scientific research and development services, May 2008
Occupation Scientific research and development services All industries
General and operations managers $67.42 $44.02
Natural sciences managers 65.53 54.23
Computer software engineers, systems software 49.08 44.44
Computer software engineers, applications 45.01 41.07
Mechanical engineers 42.77 36.02
Medical scientists, except epidemiologists 38.08 34.90
Chemists 36.75 31.84
Business operations specialists, all other 34.60 28.81
Executive secretaries and administrative assistants 22.52 19.24
Biological technicians 20.55 18.46

Benefits and union membership. Workers in scientific research and development services generally receive standard benefits, including health insurance, paid vacation and sick leave, and pension plans.

In 2008, only 4 percent of all workers in the scientific research and development industry were union members or covered by union contracts, compared with about 14 percent of all workers throughout private industry.

*Source: Bureau of Labor Statistics, U.S. Department of Labor. Used by permission.

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