Useful Stats: State business R&D investment (1999-2017)

While business investments towards research and development have varied among states, the overall trend throughout the country has been a positive one. Business R&D funding has weathered two recessions over the past 20 years, with many states seeing investments grow beyond their pre-recession levels. While the scope of COVID-19’s economic impact continues to grow, business R&D investment has shown a strong history of recovering from, and building beyond, national financial downturns.

While SSTI has recently reviewed business R&D investments, it is revisited here to examine longer-term trends and to help build an idea of how business R&D spending was affected by both the 2001 and 2008 recessions. Despite these economic downturns, states across the country prior to the pandemic had begun to see their business R&D investments grow beyond their pre-recession levels. Although the economic impacts of COVID-19 continue to grow, an understanding of how states’ business R&D funding reacted to previous financial downturns may prove helpful moving forward. The data, gathered from the National Science Foundation’s National Center for Science and Engineering Statistics, covers the years 1999 through 2017, where available.

Far West states have continued to excel in business R&D investment; this success has been spearheaded by California (not pictured due to scale, grew from $38 billion to $132 billion over the two decades), but both Washington and Oregon have also experienced an increase in investments within their borders.

Growing business R&D investment has not been limited to the Pacific Coast. The Great Lakes region (Illinois, Indiana, Michigan, Ohio, Minnesota, and Wisconsin) has also witnessed a steady rise in investment, with each state experiencing growth in business R&D that has surpassed its pre-Great Recession levels.

The Great Plains region has witnessed a plateau in business R&D spending. While Iowa and Kansas have continued to experience a rise in investments, the neighboring states of Nebraska, North Dakota, and South Dakota have leveled out post-recession. Additionally, Missouri has seen a continued decrease in business R&D funding since 2013.

Missouri Business R&D Investment Data was unavailable for the years 2008, 2009, and 2011

States within the Rocky Mountain region have also experienced varied levels of investment throughout the past 20 years. While the majority of states in the region have recovered from the funding decrease experienced during the Great Recession (Montana has recently dropped below the state’s business R&D spending in 2008 and 2009), the only state that has maintained a consistent growth in investment is Idaho. Colorado, Utah and Wyoming business spending has fluctuated, yet none of the states have dipped below their respective 2009 levels.

New England states have experienced varied levels of post-recession business R&D investments. Rhode Island and Massachusetts have maintained continued growth, while Maine, New Hampshire and Vermont have reached a plateau in investments. Business R&D funding in Connecticut has experienced investment increases, yet in 2017 had not yet reached pre-recession levels.

New Hampshire Business R&D Investment Data was unavailable for the year 2009

Mid-Atlantic states have seen continued growth in business research and development spending. New Jersey and New York lead the region in total funding, while Maryland and Pennsylvania maintain strong levels of investment. Delaware experienced a decline in spending in both 2016 and 2017, however investment within the state has remained above the pre-2009 levels.

Delaware Business R&D Investment Data was unavailable for the year 2008

Southwestern states have seen varying levels of business investment in R&D. Texas remains the leader of the region as the state continues to experience a significant rise in business R&D funding. Arizona has also seen a steady climb in business R&D spending and has surpassed the state’s pre-recession levels. Investment levels in both New Mexico and Oklahoma have remained consistent throughout the past 20 years, with both states’ 2017 spending being its highest within the previous decade.

States within the Upper South have either experienced continuing growth in business R&D investment or have seen investments level out over the past 20 years. North Carolina has witnessed rising levels of business R&D spending, while the business funding for research and development within Kentucky, Tennessee, Arkansas, and West Virginia has plateaued, with spending levels remaining consistent throughout the past two decades. Virginia’s business R&D investment has been on a steady decline since peaking in 2009. While the state’s 2017 total is higher than 2016, it has yet to reach the levels of spending experienced in 2008 and 2009.

The Lower South states have also experienced varied levels of business R&D investment throughout the past 20 years. Florida and Georgia have both seen increasing levels of business R&D spending, while the R&D business funding within Alabama, Louisiana, Mississippi, and South Carolina has reached a plateau in recent years.

The data used is available from the National Science Foundation’s National Center for Science and Engineering Statistics.