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News Release 16-118

Half of U.S. business R&D concentrated in five states

California alone accounted for 30 percent, according to latest figures

California alone accounted for $77 billion, or 30 percent, of self-funded business R&D.

California alone accounted for $77 billion, or 30 percent, of self-funded business R&D.


October 3, 2016

This material is available primarily for archival purposes. Telephone numbers or other contact information may be out of date; please see current contact information at media contacts.

Five states accounted for just over half of the $255 billion of research and development (R&D) companies paid for and performed in the United States in 2013, according to a new report from the National Center for Science and Engineering Statistics.

Business R&D is geographically concentrated in the United States to a greater degree than either gross domestic product (GDP) or population. The five states with the highest levels of business R&D performance -- California, Massachusetts, Michigan, Texas and Washington -- accounted for $133 billion, or 52 percent, of the total.

California alone accounted for $77 billion, or 30 percent, of self-funded business R&D -- up from 25 percent five years ago. Between 2008 and 2013, California's R&D performance grew at a faster pace than its economy as a whole, resulting in its R&D intensity -- its ratio of business R&D to GDP -- increasing from 2.8 percent to 3.5 percent.

Texas and New York had R&D intensities substantially below that of the nation as a whole, reflecting their higher concentration of less-R&D-intensive industries: oil and gas extraction in Texas and financial services in New York.

The top 10 states for R&D paid for and performed by U.S. companies are:

  • California -- $77 billion.
  • Massachusetts -- $14 billion.
  • Michigan -- $14 billion.
  • Washington -- $14 billion.
  • Texas -- $13 billion.
  • Illinois -- $12 billion.
  • New Jersey -- $12 billion.
  • Pennsylvania -- $10 billion.
  • New York -- $9 billion.
  • Minnesota -- $6 billion.

In four of the top 10 states, a single industry dominated business R&D. For Michigan, that industry was automobile manufacturing, which accounts for 74 percent of its total. Software publishers accounted for 62 percent of Washington's total, and the pharmaceutical industry for 53 percent and 48 percent of New Jersey's and Pennsylvania's totals, respectively.

In addition to state data, the report also contained data on geographic areas with the largest amount of self-funded business R&D performance. The top three areas are:

  • San Jose-San Francisco-Oakland.
  • Los Angeles-Long Beach.
  • Seattle-Tacoma-Olympia.

The largest R&D industries represented in these areas vary. Computer and electronics manufacturing dominated the San Jose-San Francisco-Oakland area, while information technology and aerospace companies dominated the Seattle-Tacoma-Olympia area. For Los Angeles-Long Beach, no single industry accounted for a disproportionately large share of its R&D performance.

For more information, including the business R&D performance levels for all 50 states, read the full report.

-NSF-

Media Contacts
Rob Margetta, NSF, (703) 292-2663, email: rmargett@nsf.gov

Program Contacts
Raymond M. Wolfe, NSF, (703) 292-7789, email: rwolfe@nsf.gov

The U.S. National Science Foundation propels the nation forward by advancing fundamental research in all fields of science and engineering. NSF supports research and people by providing facilities, instruments and funding to support their ingenuity and sustain the U.S. as a global leader in research and innovation. With a fiscal year 2020 budget of $8.3 billion, NSF funds reach all 50 states through grants to nearly 2,000 colleges, universities and institutions. Each year, NSF receives more than 40,000 competitive proposals and makes about 11,000 new awards. Those awards include support for cooperative research with industry, Arctic and Antarctic research and operations, and U.S. participation in international scientific efforts.

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