More than half of all U.S. R&D is performed in only a few states. Nonetheless, patterns of expenditures for R&D activities vary among the top R&D-performing states. (For a broader range of indicators on state-level S&E activities, see chapter 8.)
In 2007, the 10 states with the greatest R&D expenditure
levels accounted for about 64% of U.S. R&D expenditures
that can be allocated to the states. The top 20 states accounted
for nearly 85% of the R&D total; the 20 lowest-ranking
states, around 5%. California alone represented 22% of U.S.
R&D, exceeding the next-highest state, Massachusetts, by
more than three times. Appendix table
To some degree, state variations in the level of R&D expenditures reflect differences in economic scale. Reporting a state's R&D expenditures as a fraction of its GDP adjusts for these differences and is an indicator of R&D intensity at the state level.
States with the highest R&D/GDP ratios in 2007 included
New Mexico, Massachusetts, and Maryland (table
The proportion of R&D performed in each of the major
R&D-performing sectors (business, universities and colleges,
federal intramural facilities and FFRDCs) varies across
states. States that lead in total R&D tend to be well represented
in each of these sectors (table
In 2007, business-sector R&D accounted for about 74% of the U.S. R&D total that could be allocated to specific states. Of the top 10 states in total R&D performance, 9 are also in the top 10 in industry R&D. Connecticut, 10th in business-sector R&D and home to substantial pharmaceutical R&D activity, surpasses Maryland in the business R&D ranking.
University-performed R&D accounts for 14% of the U.S. total, and it also closely follows state total R&D performance. Among the top 10 states in total R&D, only Michigan, New Jersey, and Washington are not also among the university R&D top 10, being replaced by North Carolina, Ohio, and Florida.
Representing about 11% of the state-distributed U.S. total, federal R&D performance (both intramural and FFRDC) is more concentrated geographically than performance in other sectors—and the relationship between its geographical distribution and that of total R&D is less significant. The top four states (Maryland, California, New Mexico, and Virginia) and the District of Columbia represent 64% of all federal R&D performance. This figure rises to 78% when the other five top 10 states (Massachusetts, Tennessee, Washington, Illinois, and Florida) are included.
Federal R&D accounts for 82% of all R&D in New Mexico, home of the nation's two largest FFRDCs (Los Alamos and Sandia National Laboratories). The high figures for Maryland (54%), Virginia (38%), and the District of Columbia (74%) reflect the concentration of federal facilities and administrative offices in the national capital area. The share for Tennessee (32%) reflects the presence of a large federal facility, Oak Ridge National Laboratory.
In California, Massachusetts, Washington, and Illinois, federal R&D performance accounts for no more than 6% to 7% of the state R&D totals, even though each state is among the top 10 in federal performance. The federal R&D share in Florida was 13% in 2007.
During 2007, companies in the 10 states with the highest
business R&D performance reported aggregate R&D
expenditures of $186.0 billion and accounted for 69% of
the business R&D performed in the United States. Companies
in California alone accounted for 24% of the nation's
business R&D. The types of companies that carry out R&D
vary considerably among these 10 leading states (table
The computer and electronic product manufacturing industries
performed 22% of the nation's total business R&D,
but the shares of this performance were larger in Massachusetts
(45%), Illinois (33%), California (33%), and Texas
(32%). These states have clearly defined regional centers
of high-technology research and manufacturing, including
Cambridge and Route 128 in Massachusetts; Champaign
County, Illinois; Silicon Valley, California; and the Silicon
Hills of Austin. About two-thirds of R&D performed in the
United States by computer and electronic product companies
in 2007 was located in these four states and accounted
for 14% of all business R&D nationwide (table
R&D performed by chemical manufacturing companies
remains prominent in New Jersey, Connecticut, and Pennsylvania,
all home to the pharmaceuticals and the chemicals
industries. According to the American Chemistry Council
(ACC 2009), together these states are host to more than
2,000 chemical manufacturing establishments, an increase
of about 500 since 2005, and rank among the top 18 in chemicals
industry employment. In 2007, chemical manufacturers
accounted for 63% of New Jersey's business R&D, 59% of
Connecticut's, and 55% of Pennsylvania's (table
The R&D and related-services sector, which consists largely of biotechnology companies, contract research organizations, and early-stage technology firms, is also geographically concentrated, with California, Massachusetts, and New Jersey accounting for more than 42% of R&D. The companies in this sector maintain strong ties to the academic sector and are often located near large research universities (Stuart and Sorenson 2003).
Nationally, small companies (those that have from 5
to 499 employees) performed 19% of total U.S. business
R&D in 2007 (appendix table