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R&D Remains Concentrated in Few States, but Intensity Changes

April 06, 2001

The latest Issue Brief from the National Science Foundation (NSF) shows research and development (R&D) expenditures remain heavily concentrated in a few states. Ten states -- California, New York, Michigan, Massachusetts, New Jersey, Texas, Illinois, Pennsylvania, Washington, and Maryland -- account for nearly two-thirds of national R&D investments. With the exception of California, which can claim one-fifth of the nation's R&D activity, there has been some movement in rankings of the top ten in the last four NSF reports:

State 1998 1997 1995 1993 California 1 1 1 1 New York 2 3 3 2 Michigan 3 2 2 3 Massachusetts 4 5 4 4 New Jersey 5 4 5 5 Texas 6 6 6 8 Illinois 7 8 7 9 Pennsylvania 8 7 8 6 Washington 9 9 -- -- Maryland 10 10 9 7 Ohio -- -- 10 10

The report also ranks the top ten states by individual component of R&D activity: industrial, federal and academic.

R&D intensity, as measured by the ratio of R&D to the Gross State Product (GSP) standardizes the data to eliminate geographic, demographic, historical, and natural resources among the states. Delaware moved from 11th in 1997 to the top of the states in 1998 for R&D intensity with a R&D/GSP ratio of 7.6 percent. The NSF Issue Brief points out that industrial R&D in Delaware more than doubled between 1997 and 1998.

The remaining top ten states for 1998 for R&D intensity are: New Mexico (6.4%), Massachusetts (5.6%), Rhode Island (5.5%), Maryland (4.9%), the District of Columbia (4.8%), Michigan (4.6%), Washington (4.4%), California (3.9%), and Idaho (3.6%). For comparison, the national R&D intensity was 2.5 percent in 1998.

The new Issue Brief (01-320), R&D Spending is Highly Concentrated in a Small Number of States, and the three previous briefs cited above are available at: http://www.nsf.gov/sbe/srs/databrf/db.htm