Defense R&D Spending Rose During Fiscal Year 2025

Department of Defense research activity increased by 16 percent as civilian federal facility output declined in fiscal 2025.

Updated on Sept. 24, 2026 in Economic Indicators

Isometric editorial illustration of a robotic lab arm next to a concrete column, representing federal research resource allocation. — Department of Defense research and development outlays rose by 16 percent in fiscal 2025, even as spending at civilian federal facilities declined. AI Illustration. Upload story photo >

Live Poll

Should the federal government prioritize defense research funding over civilian research projects?

Research and development performance at Department of Defense facilities increased by 16 percent during fiscal year 2025. Conversely, civilian federal facilities recorded a 14 percent decrease in performance over the same period.

Why it matters

The divergent trends in federal research spending highlight a shift in how the government allocates its R&D resources across defense and civilian sectors. These outlays reflect actual disbursements for prior obligations, providing a clear picture of government research priorities.

Federal facilities reported a 16% rise in DOD research performance, contrasted by a 14% drop in civilian R&D output. These figures are calculated using current dollars and account for internal performance costs.

The players

Department of Defense

The federal executive department responsible for providing the military forces needed to deter war and protect the security of the United States.

The details

Federal facilities measure R&D performance through outlays, which are defined as the actual disbursement of cash, checks, and electronic transfers. The data specifically accounts for internal costs incurred by these facilities rather than money transferred to other agencies.

The R&D performance levels were recorded throughout fiscal year 2025.

Macro View

This data updates the long-term federal funding trajectory previously established by the 2025 NSF federal R&D performance report. The shift mirrors historical cycles where defense priorities often receive larger fiscal focus during periods of changing national security requirements.

The shift in government research funding can influence domestic innovation priorities and the allocation of taxpayer resources toward specific federal projects. These adjustments ultimately affect the pipeline of future technological developments originating from federal institutions.

The takeaway

The data demonstrates a clear prioritization shift toward defense-related research within the federal budget for 2025. Monitoring these allocations provides insight into how the government intends to balance military technological advancement against civilian research initiatives.