See the complete list of trends that we analyze.

1.Introduction to the Engineering & Research Industry

On a global basis, spending on R&D has increased rapidly. In industrialized nations, R&D investment has risen from an average of about 1.5% of Gross Domestic Product (GDP) in 1980 to more than 2.2% today. Large numbers of university students around the globe are enrolled in engineering and scientific disciplines-many of them dreaming about potentially vast rewards if their research efforts become commercialized. Global research collaboration (between companies, and between companies and universities) is booming, as is patenting; in fact, it is difficult for patent authorities in the U.S. and elsewhere to keep up with demand. Globalization and cross-national collaboration have such a dramatic effect on research and design that nearly one-half of all patents granted in America list at least one non-U.S. citizen as a coinventor. Major U.S. universities, like the University of Texas and the University of Wisconsin, are eager to patent their inventions and to reap the benefits of commercialized research. Top research universities earn millions of dollars each in yearly royalties on their patents.

The U.S. continues to lead the world in terms of total investment in research and development, at about $360 billion during 2007. However, it ranks second in terms of R&D as a percent of GDP at 2.6%, behind Japan's 3.2%. Massive research outlays by the U.S. federal government play a large part. The proposed federal research budget for 2008 was $138.3 billion, including $82.3 billion for defense and $29.2 billion for health. Government research dollars feed projects at universities throughout the U.S. and at many types of private corporations.

California launched an interesting initiative in research funding at the state level when voters there approved, in November 2004, $3 billion in stem cell research funding. By 2007, California's stem cell research program was slowly getting underway after combating lawsuits questioning the authority of the state government to create such a program. Other states across the U.S. quickly began discussing the potential of launching such initiatives of their own. In 2007, voters in the State of Texas approved a $3 billion cancer research initiative spearheaded by former cancer patient and globally recognized athlete Lance Armstrong. The end result may be heightened competition between tech-savvy states for leading-edge research efforts, at both corporate and university facilities.

Meanwhile, U.S. corporations continue to fund massive engineering projects and research budgets of their own. Top research investors among U.S. companies include Ford, General Motors, IBM, Johnson & Johnson, Microsoft and Intel. Unfortunately, the continuing financial strife and declining market share of U.S. car makers will likely lead to a significant decline in their funding available for R&D.

Engineering, science, research and development provide large numbers of well-paying jobs in America. Officially, as of its mid-2006 survey (the latest data available), the U.S. Bureau of Labor Statistics counts 2.4 million people employed in architecture and engineering occupations; 1.2 million in life, physical and social sciences; and 3.0 million in computer and mathematical occupations.

Rapidly growing sectors in U.S., Japanese, Indian and Chinese research include virtually all sectors within the energy field, from renewable energy such as solar power, to oil exploration technologies, to superconductivity, to nuclear generation. The energy sector will receive even more R&D emphasis due to extremely high global demand for electricity and transportation fuels. The convergence of information technology, biotechnology and nanotechnology is fueling the imaginations and the research budgets of scientists and engineers. Likewise, the convergence of information technology, entertainment and telephony is booming. Great research emphasis is also placed on chemicals, health care, defense, transportation, telecommunications, chips, computer hardware and computer software.

In the U.S., due to the long-term boom in construction, including residential, commercial and government projects, building and infrastructure design and engineering firms have been charging and receiving high rates. Even with the recent slowdown in residential construction, certain types of commercial and government construction projects, such as schools and health care facilities, continue at a high rate.

Companies know that they must invest in R&D in order to stay competitive, but in many cases their R&D strategies are evolving. One change is the way this funding is allocated. Strategies are shifting to include more alliances and joint ventures with other companies; more subsidiary spin-offs based on established technologies; more contracts and cooperative efforts with federal labs and agencies; and higher grants and projects of greater scope at the university level. Companies are also looking for ways to leverage their R&D investments in order to get more bang for their bucks.

Historically, corporate America's R&D dollars were spent at labs within the bounds of the U.S., but today, more and more projects are going to company-owned or outsourced labs overseas. The outsourcing and offshoring of research and engineering projects are skyrocketing to say the least. Due to low costs and large talent pools (including large numbers of new graduates with engineering and scientific degrees), the nations of Eastern Europe, China and India in particular are attracting more and more of the total research dollars invested by major companies.

China has one of the fastest-growing research budgets in the world, and by 2020 the government's goal is to invest 2.5% of GDP annually in research, which will cause China to rank third in the world in terms of total annual investment. In 2007, China's government invested $52.4 billion in R&D (about 1.49% of GDP, up from $29.4 billion in 2005). This does not include R&D expenses at labs owned by foreign companies.

India's government, according to its Ministry of Science and Technology, invested about 0.77% of GDP in R&D during the fiscal year ending in March 2005. This amount totaled $4.9 billion, up about 9.7% over the previous year. Meanwhile, for each of 2006, 2007 and 2008, India's national budget increased the amount going to education by 20%. The 2008 budget included funds for two new schools of planning and architecture along with three new institutes of technology.

Certain countries have the lion's share of R&D activity. Corporations with the largest R&D budgets are nearly all headquartered in the U.S. and Canada in North America; in the U.K., France, Germany, Switzerland, The Netherlands, Sweden and Italy in the European region; and in the Asia-Pacific nations of Taiwan, Japan, Korea and Singapore.

Many American employers are frustrated in their efforts to hire either U.S. citizens or eligible immigrants who have specific degrees and experience suitable to fill niche jobs that are vital for corporate R&D. These employers feel that the current H1-B immigration program is much too restrictive. Temporary, job-related immigration status under the H1-B program has, in recent years, been limited to 65,000 people per annum, plus a special additional allotment of 20,000 expressly for immigrants who hold advanced degrees from U.S. universities.