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Public Financing of Research and Development, by State: 2006

NSF 10-321 | June 2010 | PDF format. PDF  

by Melissa F. Pollak[1]

Nearly $350 billion was invested in research and development in the United States in 2006. Government agencies supplied approximately $100 billion of those dollars, or 29% of the total. The federal government is the source of almost all public funds spent on R&D. State and other governments are estimated to provide about 3% of public R&D spending ($3.3 billion in 2006), and almost all of those funds ($3.0 billion in 2006) finance R&D performed by universities and colleges. The remaining state funding (approximately $300 million) supports state agencies' intramural R&D.

California leads all states in both public and private investment in R&D. In 2006, $15.8 billion in public funds was spent on R&D in California. About one-third of California's publicly financed R&D dollars ($5.2 billion) was spent by industry, 27% by universities and colleges, 23% by federally funded research and development centers (FFRDCs), 10% by the federal government; and 7% by other nonprofit organizations (table 1).[2] The federal government provided almost all of those funds; state and other public sources amounted to less than 2% of the $15.8 billion.[3]

TABLE 1. Public financing of R&D, by state and performer: 2006.

  Table 1 Source Data: Excel file

Maryland was the only state other than California in which more than $10 billion in public R&D monies was spent in 2006. Of the state's $11.4 billion government-funded R&D, 70% was federal intramural R&D.

Maryland is also 1 of 11 states in which public R&D funds exceeded private dollars. Neighboring Virginia and the District of Columbia each also had a larger amount of public R&D financing than private financing (table 2).

TABLE 2. States with more public than private R&D funds, ranked by proportion of all R&D: 2006.

  Table 2 Source Data: Excel file

Performers of Publicly Supported R&D

Federal Government

Federal intramural R&D totaled $25.6 billion in 2006. Maryland, Virginia, and the District of Columbia ranked first, second, and third, respectively, in terms of these R&D expenditures (table 3).[4] Together with California, these four states accounted for 63% of total federal intramural R&D in 2006.

TABLE 3. States with the largest amounts of federal intramural R&D funds: 2006.

  Table 3 Source Data: Excel file

At $8.0 billion, Maryland led all states in federal intramural R&D. The source of most of these funds (approximately 70%) was the Department of Health and Human Services (HHS), which includes the National Institutes of Health.

Virginia ranked fourth among all states in public financing of R&D. About half ($3.5 billion) of Virginia's publicly financed R&D supported R&D performed by the federal government. In the District of Columbia, more than 80% ($2.9 billion) of its publicly financed R&D was for federal R&D performance (tables 1, 3).

The Department of Defense (DOD) accounted for 81% of Virginia's federal intramural R&D and was the largest source (83%) of California's $1.6 billion in federal intramural R&D in 2006. In the District of Columbia, the largest source of these funds (44%) was the National Aeronautics and Space Administration (NASA).

Federally Funded Research and Development Centers

FFRDCs are independent laboratories and other organizations administered by universities, industry, or nonprofit organizations that perform work for and receive almost all of their funding from the federal government. In 2006 there were 38 FFRDCs in 19 states (table 4). New Mexico, with federal R&D expenditures totaling $4.0 billion at FFRDCs, and California, with $3.7 billion, accounted for 60% of the total, $12.8 billion. More than three-fourths (78%) of the public R&D monies in New Mexico were spent at its two FFRDCs, Los Alamos National Laboratory and Sandia National Laboratories, and just over half of Tennessee's and Idaho's were spent by the FFRDCs in those states. FFRDCs accounted for about one-third of the public R&D funds in Illinois and Washington.

TABLE 4. Federal expenditures for R&D performed by FFRDCs: 2006.

  Table 4 Source Data: Excel file


A substantial portion of the government's R&D portfolio is contracted to outside organizations, including for-profit businesses. In 2006, companies reported spending $24.3 billion in federal R&D dollars. For example, this sector accounted for nearly $3 of every $4 (73%) of public R&D spending in Connecticut in 2006. In Connecticut and four other states—California, Massachusetts, Florida, and Alabama—industrial firms spent more public R&D dollars than did any other sector (table 1).

Several industries (computer and electronic products; aerospace; software; and professional, scientific, and technical services) dominate the R&D activity taking place in those states. Many companies performing R&D on behalf of the government are classified in those industries.

Virginia, Texas, and Maryland round out the top eight states having the largest amounts of federally financed R&D performed by industry (table 5). These states also have a heavy concentration of firms classified in the professional, scientific, and technical services industry. Together, the top eight states accounted for approximately two-thirds of all government support of R&D performed by companies in 2006.

TABLE 5. States with the largest amounts of federal financing of industry-performed R&D: 2006.

  Table 5 Source Data: Excel file

Universities and Colleges

Universities and colleges receive more public R&D dollars than any other sector, $31.8 billion in 2006. Most of those funds ($28.8 billion in 2006) are provided by federal agencies to the academic sector primarily in the form of grants to support research. Research performed by universities and colleges is instrumental in training future scientists and engineers.

In 32 of the states shown on table 1, academic institutions receive the highest percentage of public (both federal and state) R&D monies among all sectors. In 23 states, the academic sector accounted for half or more of all public R&D monies. Generally, the states with smaller amounts of public R&D funds were most likely to have received those funds to support research performed by universities and colleges (table 1).

In 2006, nine states had more than $1 billion in public support of academic R&D. These states accounted for more than half (55%) of the 2006 total in publicly supported R&D performed by universities and colleges. The top 25 states accounted for 86% of the total (table 6).

TABLE 6. Public support for R&D performed by universities and colleges, by state and source of funds: 2006.

  Table 6 Source Data: Excel file

Table 7 displays each state's ranking in 2006 for the six largest federal agencies that provide R&D funds to universities and colleges. States vary considerably in patterns of federal support.

TABLE 7. Federal support for R&D performed by universities and colleges, ranked by state total and by state rank within the six largest funding agencies: 2006.

  Table 7 Source Data: Excel file

  • California institutions received more R&D dollars than those in any other state from five of the six agencies.
  • Texas universities and colleges were the largest recipients of R&D dollars from the USDA, followed by those in Colorado and Mississippi.
  • Colorado's higher education campuses ranked fourth in R&D support from NASA after those in California, Maryland, and Texas. Rounding out the top 10 for NASA support were universities and colleges in Massachusetts, Arizona, Virginia, New York, Alabama, and Utah.
  • Institutions in Georgia ranked fifth in DOD R&D funding; those in California, Pennsylvania, Texas, and Massachusetts took the top spots.
  • Academic institutions in Nevada received more funding from the Department of Energy (DOE) than those in every state but California, New York, Massachusetts, and Illinois.

In all but five states, HHS is the leading federal source of funding for R&D performed by academic institutions. California ($2.4 billion), New York ($1.6 billion), and Texas ($1.1 billion) led all other states in total HHS funding for academic R&D. In 20 states, HHS accounted for more than half of the total, and in Connecticut, Missouri, Vermont, and the District of Columbia HHS accounted for at least 70% (table 6).

The five exceptions are Hawaii (where DOD is the leading supplier of R&D funds to academic institutions), Nevada (DOE), North Dakota (DOD), Alaska (DOD), and Wyoming (NSF).

The National Science Foundation (NSF) ranks second as a source of public R&D dollars to institutions of higher education more often than does any other federal agency. California institutions received $566 million in 2006, followed by institutions in New York ($303 million) and Massachusetts ($269 million). In 2006 NSF provided 27% of the public funds spent on R&D performed by academic institutions in Wyoming. NSF was Wyoming's largest source of such support, and this percentage was the highest recorded for NSF for any state. At 21%, Alaska had the second highest percentage (table 6).

In 2006, state and other nonfederal governments provided a total of $3.0 billion in support for R&D performed by academic institutions. Universities and colleges in Texas reported the highest dollar amount of state government funding of R&D in 2006, $409 million, followed by California and New York universities and colleges, at $267 million and $202 million, respectively. The other states with more than $100 million were Florida, Ohio, North Carolina, Pennsylvania, Louisiana, and Virginia. Eleven states—Connecticut, New Hampshire, Hawaii, Maine, Rhode Island, Nevada, Vermont, Delaware, West Virginia, Wyoming, and Alaska—and the District of Columbia had less than $10 million in state funding of academic R&D (table 8).

TABLE 8. State and other nonfederal public support for R&D performed by academic institutions, ranked by total nonfederal public support: 2006.

  Table 8 Source Data: Excel file

In all but 12 states, state and other nonfederal public funding of academic R&D amounted to less than 10% of total academic R&D spending. At 23%, Idaho led all other states in the percentage of state funding. At the other extreme, Alaska, Connecticut, New Hampshire, Rhode Island, West Virginia, Wyoming, and the District of Columbia ranked among the bottom 12 both in actual state dollars and in the percentage of total academic R&D expenditures. Alaska ranked lowest in both categories, providing $2 million in R&D support—about 1% of its academic institutions' R&D expenditures in 2006 (table 8).

Nonprofit Organizations

In Maine, Minnesota, Massachusetts, Pennsylvania, and Washington, a relatively large proportion of publicly financed R&D is performed by nonprofit organizations (table 1). For example, in Maine 42% of public R&D funds were spent in the nonprofit sector. Massachusetts leads all other states in the level of funding in this category with $1.2 billion, followed by California at $1.0 billion (table 9). Together, these two states accounted for 40% of all government R&D support of nonprofit organizations; the top 12 states accounted for 83%.

TABLE 9. States with the largest amounts of public support for R&D performed by nonprofit organizations: 2006.

  Table 9 Source Data: Excel file

Data Sources and Availability

The R&D statistics presented in this report result from summing the R&D performance for all sectors of the economy for which information can reasonably be assembled. The data come chiefly from NSF national surveys of R&D expenditures: the Survey of Industrial Research and Development, 2006; the Survey of Federal Funds for Research and Development, FY 2006–08; the Survey of FY 2006 State R&D Expenditures, and the Survey of Research and Development Expenditures at Colleges and Universities, FY 2006. No adjustments were made to convert data from fiscal year to calendar year estimates.

The figures for university and college R&D expenditures in 2006 are based on final figures from the 2006 Survey of R&D Expenditures at Colleges and Universities. These data are based on academic fiscal years. R&D expenditures performed by FFRDCs are collected annually by NSF as part of the Survey of R&D Expenditures at Colleges and Universities. Further information on each of these surveys and links to survey data are available at http://www.nsf.gov/statistics/survey.cfm.

The data on federally funded R&D discussed in this report were derived from surveys of organizations that perform R&D, such as companies, universities, and federally funded research and development centers (FFRDCs). These amounts can differ substantially from the R&D that federal agencies have reported funding.


[1] Melissa F. Pollak (retired), Research and Development Statistics Program (RDS), Division of Science Resources Statistics, National Science Foundation, 4201 Wilson Boulevard, Suite 965, Arlington, VA 22230. Please contact John Jankowski, RDS, for information related to this report (jjankows@nsf.gov; 703-292-7781).

[2] Data for Kansas, New Hampshire, Rhode Island, Arkansas, North Dakota, and South Dakota are included in U.S. and state totals but are not shown separately to avoid disclosure of confidential information on federal R&D support to industry.

[3] State funding of R&D in California totaled $283 million in 2006; $267 million of that amount financed R&D performed by universities and colleges. State intramural R&D was $16 million in that year.

[4] Intramural activities cover not only actual intramural R&D performance but also the costs associated with planning and administration of both intramural and extramural programs by federal personnel.

National Science Foundation, Division of Science Resources Statistics
Public Financing of Research and Development, by State: 2006
Arlington, VA (NSF 10-321) [June 2010]

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