Are academic science & engineering resources growing more concentrated?

Colleges and universities that conduct research and development around science and engineering are central to technology-based economic development strategies and are at the core of America’s innovation hubs. The distribution of science and engineering R&D at colleges and universities (S&E R&D) – already distributed unevenly across the country— appears to have grown radically more so since the Great Recession. In fact, SSTI analysis using data from the National Science Foundation’s National Center for Science and Engineering Statistics reveals that approximately 60 percent of all new funds for S&E R&D at colleges and universities from 2008 to 2016 went to institutions in just three states: Maryland, California and New York.   

Earlier this summer, SSTI highlighted research from the University of Michigan that found the boost in federal R&D funds as a result of the 2009 stimulus package had a significant impact on local economic development. Unlike traditional ARRA spending, which targeted areas heavily impacted by the recession, the authors note that ARRA R&D spending mostly went to regions with elite research universities. The result helped perpetuate an uneven distribution of federal R&D dollars.

The chart below looks at the change in distribution of total federal obligations for S&E R&D at colleges and universities between 2002 and 2016, indexed to 2002 levels. The inflection point during the ARRA years is particularly visible. In 2002, 20.8 percent of the total went to the top 10 schools, while schools outside of the top 100 accounted for 24.0 percent. By 2016, however, the top 10 accounted for 22.4 percent, and schools outside of the top 100 accounted for 20.4 percent. The middle portion, schools ranked between 11 and 100, remained relatively constant during this period.

The schools that make up the top ten in any given year are academic powerhouses, including Johns Hopkins and its Applied Physics Laboratory (APL), the University of Michigan, and the University of Washington in Seattle. Meanwhile, more than 1,300 schools fall outside of the top 100 range. Nearly 30 of the 115 large, R1 universities fall outside the top 100, including institutions that anchor extended innovation hubs, such as Clemson and the Universities of Nebraska, Oklahoma or Missouri.

The table below highlights the schools that saw the largest increases in S&E R&D increases from 2008 (the year prior to ARRA funds) and 2016 (the most recent year where data is available), as measured by their share of total new funds. More than one in four new dollars went to Johns Hopkins and the APL; in 2016, the APL represented roughly 58.3 percent of Johns Hopkins’ total R&D. All of the top 10 schools by share of total new funds ranked in the top 30 of total S&E R&D funds in 2016, including five of the top 10.

At the state level, these effects are even more pronounced. Approximately 60 percent of the new funds for S&E R&D at colleges and universities from 2008 to 2016 went to just three states – Maryland, California, and New York.

Ultimately, as the unevenness between regional have’s and have-not’s gains national attention, it is worth considering whether the way the federal government funds research and development intrinsically favors those regions already in the best position for success.

While smaller tech-hubs like Ann Arbor and Boulder are especially reliant on academic R&D expenditures, larger hubs also receive an impressive influx of federal funds for science and engineering. Over time, communities like New York City, the Bay Area, or Boston, which have many economic assets, have seen their federal investment in S&E R&D increase. Numerous states and major metropolitan areas, home to major research universities and strong anchors for their economies, are competing for the dwindling remainder.

As SSTI has discussed previously, federal funds for R&D can be important to local economic development for three main reasons. First, the funds act as a “traded industry” to a region by bringing in outside dollars and attracting talent. Second, these funds help build a pipeline of future STEM workers. Third, R&D grants help pay for locally purchased equipment, but more importantly, the salaries of knowledge workers. Several researchers have also pointed to the importance of research universities in supporting the continued redevelopment of heartland communities. Ultimately, to help develop more innovation hubs around the United States, more attention should be paid to the basic building blocks of technology-based economic development – the billions of dollars spent every year by the federal government to support S&E R&D, and where these funds go.

For more information on S&E R&D, visit the accompanying Useful Stats article.