Useful Stats: Higher Education R&D expenditures distributed unevenly across metro areas

The growth and intensity of higher education R&D (HERD) expenditures varies considerably across metropolitan areas, a recent SSTI analysis of National Science Foundation data finds. New York ($4.3 billion), Boston ($3.2 billion), and Baltimore ($2.9 billion) had the highest overall levels of HERD expenditures in 2016. In that same year, Ithaca, New York (19.1 percent), State College, Pennsylvania (9.5 percent), and College Station, Texas (9.4 percent) had the highest levels of HERD intensity – measured as the share of HERD expenditures to gross metropolitan product. While overall HERD expenditures increased by nearly $7.5 billion nationwide from 2011 to 2016, more than half of this total (50.6 percent) went to the 10 metro areas with the most HERD expenditures in 2016.

This analysis uses data from the National Science Foundation’s Higher Education Research and Development (HERD) Survey. For the survey, each university responds with a five-digit ZIP code that can match with a corresponding metropolitan statistical area. At this unit of measurement, HERD data can also pair with the Bureau of Economic Analysis’s data on gross domestic product by metro (GMP), a proxy for the size of a region’s economy. SSTI then used the GMP data to categorize regions into four quartiles – extra-large, large, small, and very small – each containing 55 metropolitan areas.

In 2016, the regions with the highest levels of HERD expenditures in the extra-large quartile were New York ($4.3 billion), Boston ($3.2 billion), and Baltimore ($2.9 billion). Durham-Chapel Hill ($2.1 billion), Madison ($1.1 billion), and New Haven ($888.8 million) had the highest levels among the second quartile. Ann Arbor ($1.4 billion), Gainesville ($791.3 million), and Urbana-Champaign ($625.1 million) had the highest overall levels of HERD expenditures among the third quartile, while Ithaca ($781.7 million), College Station, Texas ($892.7 million), and State College, Pennsylvania ($825.6 million) led among the smallest regions.

An analysis of HERD intensity, as measured by the proportion of a region’s HERD to its GMP, finds considerable variation among metropolitan areas. Unsurprisingly, while overall HERD levels were much higher among the largest regions, HERD intensity was highest among smaller metropolitan areas. The figure below presents HERD intensity for the 10 most HERD-intensive metropolitan areas in each quartile. Data on the other metropolitan regions can be found in the excel file attached at the bottom of this document.

Overall HERD expenditures increased by nearly $7.5 billion from 2011 to 2016, but more than half of this total (50.6 percent) went to the 10 metro areas with the most HERD expenditures in 2016. The New York City ($838 million increase), Boston ($798.3 million increase), and Philadelphia ($568.0 increase) metropolitan areas saw the largest dollar amount increases from 2011 to 2016.

Among large metro areas, the regions that saw the largest percent increase from 2011 to 2016 were Grand Rapids (274.6 percent increase), Orlando (121.9 percent increase), and Las Vegas (64.1 percent increase). Generally, these regions also experienced the fastest increases in R&D intensity during that same time. Growth in each of these metropolitan areas – and many of the other areas with fast growing HERD expenditures – is generally a result of increases in biomedical research.

For example, Grand Rapids’ growth is largely attributable to the nonprofit Van Andel Institute, which did not report HERD data prior to 2015. Founded in 1996, the Van Andel Institute focuses on biomedical R&D and anchors the city’s “Medical Mile.” The growth in Orlando and Las Vegas is attributable to R&D increases at the University of Central Florida and the University of Nevada, Las Vegas, respectively. Both of those universities expanded their medical schools and overall R&D portfolios during the 2011 to 2016 period. In smaller metros like Augusta, Georgia, and Tyler, Texas, where HERD growth was also very high, new medical schools also played a pivotal role.

On the other hand, the large metro areas with the largest percent declines in HERD expenditures from 2011 to 2016 were Indianapolis (82 percent), Jacksonville (45 percent), and Bridgeport, Connecticut (37 percent). Indianapolis’ decline is less dramatic than it looks and can largely be explained by a change in reporting from Indiana University. Hundreds of millions of dollars in HERD expenditures at Indiana – Purdue University Indianapolis (IUPUI) from 2010 to 2014 transferred to Indiana University in Bloomington in 2015 and 2016. As a result, Bloomington also experienced one of the most dramatic increases from 2011 to 2016 of any metropolitan area (156 percent).

Jacksonville and Bridgeport had the lowest levels of HERD expenditures among the largest metropolitan areas in 2016. Each is home to just one university reporting R&D expenditures – the University of North Florida and Fairfield University, respectively. At each of these schools, HERD-levels fluctuated throughout the period after having similar 2011 expenditures ($9.3 million).

The chart below shows data on HERD expenditures and intensity for each metropolitan area where data is available. Additional information can be found in the excel file attached at the bottom of this document.

HERD by Metro Area.xlsx