Hardware output grew 26% in 2003, while the two categories communications services and software/services each grew less than 2%. Research and development in the IT sector grew in 2000 and 2001 after dropping between 1998 and 1999. The report estimates IT companies spent $31.2 billion on R&D in 2001, up from $26 billion in 2000 and $22.6 billion in 1999. The report estimates U.S. companies spent a total of $181.6 billion on R&D in 2001, up from $133.6 billion in 1997.