Overview

Introduction
State Distribution of R&D Performance
Ratio of R&D to Gross State Product
Federal Support for R&D
Technical Note


Introduction

Data from the National Science Foundation (NSF) detail the geographic distribution of the 1993 U.S. research and development (R&D) spending total ($165 billion). The data include R&D performance by industry, academia, and the Federal Government and the federally funded R&D activities of nonprofit institutions. Substantial state-specific information also is available on the Federal agency sources of R&D support and on the R&D-performing sectors that receive Federal funding. These and many more statistics have been compiled in a set of 51 State Science & Engineering Profiles (including one for the District of Columbia). A Profile also is included for Puerto Rico, although statistics on its total and industry R&D performance were not available.

State Distribution of R&D Performance

Roughly one-half of the $165 billion of R&D spending in 1993 occurred in just six states (California, New York, Michigan, New Jersey, Massachusetts, and Pennsylvania) and 10 states (adding Texas, Illinois, Ohio, and Maryland) accounted for about two-thirds of the national effort (chart 1). In each of these 10 states, more than $6 billion was spent on R&D. Performance in California alone reached $34 billion, one-fifth of all U.S. funds. R&D performance in each of the next 10 states totaled more than $2 billion; when combined with the first 10 states, they collectively accounted for 85 percent of R&D conducted nationwide in 1993. In contrast, the 20 states with the smallest instate R&D performance collectively accounted for just $6 billion, 4 percent of nationally performed R&D (table 1).




Not coincidentally, states that are national leaders in total R&D performance usually are leading sites of industrial and academic R&D performance (table 2).

The top 10 sites for R&D performed in Federal labs include 5 of the 10 states ranked highest in total R&D. Washington, DC, and Virginia are listed among the Federal top 10, a fact that-along with the number one ranking for Maryland-reflects the concentration of Federal facilities and administrative offices within the Washington, DC, metropolitan area. Alabama, Florida, and New Mexico-with major space- and defense-related research activity-also were ranked among the Federal R&D top 10, but not among the 10 largest total R&D performers.

Ratio of R&D to Gross State Product

These state rankings change when R&D expenditures are normalized by the size of each state. Just as the ratio of R&D expenditures to GDP is used to gauge a country's commitment to R&D, the ratio of instate R&D performance to gross state product (GSP) measures the R&D intensity of a state's economy and facilitates more meaningful interstate comparisons. For example, whereas the U.S. R&D/GDP ratio was 2.6 percent in 1993, the largest R&D/GSP ratio was achieved in New Mexico (8.1 percent) even though the state ranked 17th in terms of total R&D spending. The high research intensity of New Mexico's economy grew primarily from the considerable Federal support provided by the Department of Energy to the several federally funded R&D centers (FFRDCs) located in the state.

On the other hand, California-ranked first each in total, industrial, and academic R&D spending-ranked seventh in terms of R&D intensity, 4.3 percent. Most small performers, however, have low R&D intensities. There were 19 states with less than $0.5 billion of R&D spending, and 14 of them had an R&D/GSP ratio of less than 1.0 percent.

Federal Support for R&D

As reported by the Federal agencies that fund R&D, the Department of Defense (DOD) and the Department of Health and Human Services (HHS) collectively provided 69 percent of the Federal Government's R&D support in FY 1994 to all performers, including firms, universities, nonprofit institutions, and Federal labs. California and Maryland were the two largest recipients of total Federal R&D support (table 3). Performers-primarily industrial firms-in California received 19 percent of DOD's R&D support, and Maryland received 23 percent of HHS funding primarily in support of the intramural activities undertaken at its National Institutes of Health biomedical research facilities. California also received more of the R&D funds than any other state from the National Aeronautics and Space Administration (the main recipients being firms and FFRDCs) and the National Science Foundation (support going to universities and colleges). Maryland led all other states in receiving 34 percent of R&D funds from the Department of Commerce (DOC). Again, intramural research activities accounted for most of Maryland's DOC funding, here undertaken mostly at the agency's National Institute of Standards and Technology.

Technical Note:

Differences in performer-and source-reported Federal R&D

The National Science Foundation collects, and these Profiles contain, two separate estimates on total Federal funding of R&D. Survey data are obtained from both Federal funding agencies and performers of the work (Federal labs, industry, universities, and other nonprofit organizations). National totals, however, are based on data reported by performers because they are in the best position to (i) indicate how much they spent in the actual conduct of R&D in a given year and (ii) identify the source of their funds. Performer reporting also reduces the possibility of double-counting and conforms to international standards and guidance.

Historically, the two survey systems of funders and performers tracked fairly closely. For example, in 1980 performers reported using $29.5 billion in Federal R&D funding and Federal agencies' reported total R&D obligations of $29.8 billion. In recent years, the two series have diverged considerably: For 1993, performers report $60.3 billion in Federal R&D support, compared with the $67.3 billion reported by Federal agencies (table 4). The difference in the Federal R&D data totals appear to be concentrated in funding of industry: Overall, industrial firms have reported significant declines in Federal R&D support since 1990 while Federal agencies reported level or slightly increased funding of industrial R&D. For 1993, Federal agencies reported $31.8 billion in total R&D obligations provided to industrial performers compared with an estimated $22.8 billion in Federal R&D funding reported by industrial performers (table 5). Consequently, data users are cautioned to use considerable care in comparing the R&D performance data in table 2 (and detailed in the upper half of the Profiles) with that reported by Federal agencies in table 3 (and detailed in the lower half of the Profiles). NSF is investigating causal factors for these divergent trends.