Source page: McKinsey & Company
Commentary
Defensive measures
Defense | R&D
May 15, 2024 – In the 1950s and 1960s, the US government accounted for nearly 70 percent of global R&D spending. Over the past several decades, however, the private sector has replaced the US government as the driving force behind R&D, accounting for 73 percent of overall R&D spending in 2020. Partner Matt Waters and coauthors show that venture capital investment in 2023 was equivalent to about 450 percent of Department of Defense investment in advanced computing and software and about 800 percent of the department’s investment in biotechnology.
To read the article, see “Evolving federal R&D to meet the challenges of tomorrow,” April 26, 2024.
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Visual form
Multi-panel bar chart.
Layout / body structure
The chart is laid out as a grid of technology-area panels. Read the largest categories across the top row first and then continue through the smaller technology areas beneath them.
What is being compared
It compares US Department of Defense spending with additional venture-capital investment across critical technology areas in 2023.
Measurement system
The values are millions of dollars. In each panel, the dark-blue base represents DOD spending and the lighter blue top segment represents additional venture-capital investment, while the total sits above each combined block.
Visible structure inside the graphic
Each technology area is shown as a two-layer block with labels inside the DOD base and the added VC segment. The panels vary in size, making the biggest totals and biggest venture-capital overhangs stand out immediately.
Main takeaway from the visual
The visual shows that venture capital often materially exceeds DOD funding across many technology areas, especially in software, biotechnology, and network-related systems, rather than merely complementing federal spend at the margin.
Key standout values or extremes
Future-generation wireless technology totals $9,281 million, including $6,394 million of DOD spending and $2,887 million of additional venture capital. Space technology totals $7,252 million, while advanced computing and software shows one of the biggest VC overhangs with $3,740 million on top of an $811 million DOD base.
Controls / sequence, when applicable
This is a static chart image with no in-chart controls to operate.
Companion media, when applicable
There is no separate companion audio or video; the chart image is the full visual on this page.