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Six States Account for Half of Nation's R&D

July/August 1998

In 1995, the United States spent $183 billion dollars on research and development (R&D), according to a recent report by the Division of Science Resource Studies (SRS). Of that total amount, $177 billion can be attributed to individual states. Based on analysis of the data, SRS has identified the states that expended the most R&D dollars, and the sources and performers of the funds.

The most prominent finding is that the distribution of R&D expenditures was substantially concentrated in only six states. California is the clear leader, accounting for over $36 billion, or one-fifth of the total. The other five states, in descending order, were Michigan, New York, Massachusetts, New Jersey and Texas. Taken together, the six states account for approximately one-half of the $177 billion state-specific total.

The SRS report also shows expenditures by type of performer--industry, federal government, academia, federally funded research and development centers (FFRDCs), and other nonprofit organizations. Findings revealed, not surprisingly, that those states appearing on the list of total R&D leaders generally also appeared on the lists for top industrial and academic R&D.

According to the study, expenditure levels of individual states are often closely related to economic size of the states. R&D expenditures can be examined as a proportion of the Gross State Product (GSP), a measure of the total economic activity occurring within the state. This proportion is referred to as each state's R&D "intensity." In 1995, New Mexico had the highest R&D intensity at 8.1%. The United States' total R&D intensity is 2.5%.

Additional breakdowns show that the Department of Defense (DoD) and the Department of Health and Human Services (HHS) together provided 68% of total Federal support for FY 995 R&D. California and Maryland were the two largest recipients of Federal R&D funds. Performers in California, primarily industrial firms, received 21% of DoD's R&D support. Maryland received 20% of total HHS funding largely from the National Institutes of Health.

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