3.1 Research & Development Expenditures
Research and development expenditures play important roles in the larger context of states’ research ecosystems.
According to the National Science Foundation’s Higher Education Research and Development Survey, in 2013 U.S. higher education institutions spent $67 billion on research and development. When adjusted for inflation and accounting for the American Recovery and Reinvestment Act of 2009, increases in total research and development expenditures have slowed in the most recent years, and the percentage of expenditures from federal funding agencies has actually declined.17
Moreover, as the National Institutes of Health’s Data Book details, the average success rate for National Institutes of Health grants continues to fall.18 The combination of these pressures—less overall research and development money to distribute and more intense competition for that money—
has forced universities and states to a) be more strategic about which research areas they invest in, b) collaborate and pool together funds to enable larger projects,19 and c) showcase their research strengths to improve their applications and chances of winning those grants.
In the face of these pressures, some states have been more successful than others when maintaining and even growing their total research and development expenditures.
From 2004–2013, the top states in terms of total research and development expenditures were: California ($80.6 billion), New York ($48.5 billion), Texas ($43.1 billion), Maryland ($31.6 billion), Pennsylvania ($30.7 billion) and Massachusetts ($28.5 billion). These six states accounted for 42.8 percent of all U.S. higher education research and development expenditures over this period.
The top five states in terms of growth in research and development expenditures were: Rhode Island (6.90 percent), South Dakota (5.42 percent), North Carolina (4.53 percent), Washington (3.71 percent) and Delaware (3.61 percent).
As Figure 3.1 shows, North Carolina and Massachusetts both secured high levels of total research and development expenditures and also grew those levels significantly.
Given these differences in total research expenditures, which states tend to produce the highest number of publications relative to their level of Research and development funding?20 As a benchmark, U.S. universities as a whole produced 6.5 publications per million $USD of research and development (in 2013 dollars) from 2004–2013. Massachusetts universities21 produced 12.7 publications per million $USD of research and development funding. The rest of the top five states were: Delaware (11.4 publications), Minnesota (10.5 publications), Wyoming (10.3 publications) and Connecticut (10.3 publications).
The distribution of the sources of a state’s research and development funding is another important consideration, affecting how exposed or insulated that state’s research ecosystem is to federal or state funding pressures.
For the U.S. in 2013, about 58.9 percent of total research and development expenditures came from federal funding agencies.
The top five states in terms of federal funding as a percentage of their total research and development expenditures were: Wyoming (82.4 percent), Maryland (79.0 percent), Colorado (74.5 percent), New Hampshire (73.8 percent) and Vermont (73.6 percent).
North Dakota (38.8 percent) and Arkansas (39.1 percent) had the lowest relative levels of federal funding. On the other hand, North Dakota and Arkansas ranked first and second, respectively, in terms of the relative levels of state/local funding as a percentage of their total research and development expenditures (21.3 percent and 25.4 percent).
The states with the highest percentages of their total research and development originating from neither federal nor state/local funding sources were Rhode Island (53.2 percent) and Nebraska (52.8 percent). These states led all others in terms of relativeinstitutional contributions to research and development funding (44.7 percent and 42.1 percent, respectively).
Although funding from business and industry comprises only 5.2 percent of total research and development expenditures at U.S. universities, they play an increasingly important role, especially as funding from federal and state/local sources become more competitive. As Figure 3.2 shows, across all states, North Carolina attained the highest relative level of research and development funding from business at 9.8 percent.
Figure 3.1—Compound Annual Growth Rate, Total Research and Development Expenditures Versus Total Research and Development Expenditures by Percentile for U.S. States, 2004–2013. Research and development expenditures calculated and normalized to 2013 dollars. Source: National Science Foundation, Higher Education Research and Development Survey
Figure 3.2— Percentage of Total Research and Development Expenditures from Business Versus Total Research and Development Expenditures Across All States, 2013. Source: NSF Higher Education Research and Development Survey
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