Useful Stats: Business R&D Intensity by State (2011-2016)

Since 2011, more than half of the nation's new investment in business research and development has come from California companies, and more than three-quarters has come from the top five states, according to an SSTI analysis of recently released NSF data. For the second time this year, the National Science Foundation’s (NSF) National Center for Science and Engineering Statistics (NCSES) has updated the data for the Business R&D and Innovation Survey (BRDIS),  a primary source of information on domestic and global business research and development expenditures. In 2016, companies reported nearly $317.7 billion in self-funded and self-performed domestic R&D, a $20 billion (7.0 percent) increase from the previous year, according to the updated data. This type of business R&D represented 4.0 percent of the gross state product in California and Washington in 2016, the most of any states.

Using NSF data, this article focuses only on domestic R&D that is paid for and performed by a company. The interactive map below includes data on self-funded business R&D by state, the intensity of this R&D, and how this changed over the five-year period from 2011 to 2016. For additional information, an Excel spreadsheet is downloadable at the bottom of this page. 

In 2016, companies in the median state (Kansas) paid-for and performed approximately $1.5 billion in R&D.  The states where companies spent the most on self-performed research and development in 2016 were California ($105.8 billion), Washington ($19.0 billion), Massachusetts ($18.1 billion), Michigan ($17.5 billion) and Texas ($14.9 billion). In less populous states like Alaksa ($27 million), Hawaii ($114 million), and Montana ($121 million), companies spent the least on self-performed R&D that year.

The states where companies perform the most self-funded R&D are also the states where these activities tend to be the most concentrated. Business R&D intensity, measured by self-funded business R&D as a share of gross state product (GSP), is one measure of concentration. In the median state (Ohio) in 2016, business R&D represented approximately 1.0 percent of GSP.

In 2016, business R&D intensity was the highest in California (4.0 percent of GSP), Washington (4.0 percent of GSP), and Massachusetts (3.6 percent of GSP), Michigan (3.6 percent of GSP), and Oregon (2.8 percent of GSP). Business R&D made up just 0.1 percent of GSP in Alaska, Hawaii, and Lousiana in 2016, the least of any state.

Business R&D intensity increased in half of the states from 2011 to 2016, meaning that business R&D grew to become a larger contributor in these state’s economy during that period. Business R&D intensity grew by the most in California (0.9 percentage point increase), Oregon (0.6 percentage point increase), and Massachusetts and Michigan (0.5 percentage point increases) from 2011 to 2016.  New Hampshire (0.5 percentage point decrease), Vermont (0.5 percentage point increase), and Indiana (0.4 percentage poind decrease) saw the largest declines in business R&D intensity from 2011 to 2016.

For more information on business R&D by state, a supplemental spreadsheet is downloadable below.