Useful Stats: State-level higher education R&D trends

This article was edited on April 19th, 2023, to correct for an error in the original data analysis.

Fiscal Year (FY) 2021 saw higher education research and development (R&D) spending increase by a total of $3.43 billion (3.97%) over the prior year — a higher rate of growth than the 10-year average of +3.53% per year — and $23.99 billion (36.51%) over the past 10-years. Using data from the most recent release of the Higher Education Research and Development (HERD) survey, this article will analyze state-level trends on higher education R&D expenditures, revealing the aforementioned increased expenditures, although strong, are barely keeping pace with the nation’s overall economic growth.

The average rate of growth for total HERD expenditures allows it to hold its relative share of gross domestic product. HERD intensity — total HERD dollars over gross domestic product (GDP) — has been fairly stagnant over the past decade of available data, consistently hovering around 0.39%, and ranging from 0.38% to 0.41%. This means that while overall HERD dollars have been increasing, their proportion of the United States’ economic output has remained nearly constant.

This stagnation begs the question: since the knowledge, scientific findings, technology and patents stemming from R&D conducted within the nation’s community of institutions of higher education has helped drive much of U.S. innovation and global competitiveness since World War II, does a faltering relative level of investment in the academic R&D enterprise bode well for future American economic leadership?

The gradual downward trajectory of HERD intensity suggests a deprioritization of knowledge discovery, basic science and R&D as an educational investment. For example, in 2019 postsecondary institutions in the United States accounted for approximately 11.70% of the total national R&D expenditures, ranking the United States above China (8.10%) and South Korea (8.3%), equal with Japan (11.70%), but well below nations like Germany (17.40%), France (20.10%) and the UK (23.10%) according to NSF.

Relative to prior available data, the U.S. is on a downtrend for postsecondary R&D as a share of the total national level, dropping from 13.00% in 2017 to 11.70% in 2019. Alternatively, nations like China are experiencing an increase over the same timeframes (7.20% to 8.10%) while others are holding steady (e.g., Germany, 17.40% in both 2017 and 2019).

According to the National Center for Science and Engineering Statistics (NCSES), U.S. research institutions are a vital part of the country's R&D system as they play a key role in contributing to innovation and technological advancements, demonstrating the nation’s commitment to the development of knowledge and the growth of the economy.

Within some states, universities have partnered with private industries to help strengthen research capacities, an important element to building state, national economies and developing talent pipelines and strong workforces. SSTI coverage of some recent partnerships can be found here.

FY 2021

In FY 2021, the most recent data available, there was a wide variance in higher education R&D expenditures among states; postsecondary institutions within California had R&D expenditures totaling $11.23 billion — the highest of any state — while those in Wyoming spent $93.20 million, leading to an average total expenditure of approximately $1.72 billion within each state, DC and Puerto Rico. However, the median was significantly less at $930 million, indicating that a subset of states holding institutions with very high expenditures distorted the average (e.g., California, New York and Texas).

Purely in terms of dollars, higher-ed institutions in New York increased spending by the most (+ $405.79 million), followed by California (+ $327.24 million), Ohio (+ $269.03 million) and Texas (+ $229.15 million).

On average, total state postsecondary R&D expenditures increased by 4.42%, led by double digit growths in New Mexico (+25.69%), Tennessee (+15.69%), North Dakota (+15.06%), Montana (+13.70%), Puerto Rico (+11.35%), Alaska and Ohio (both +10.68).

However, states with historically high HERD dollars saw growths within around a percent of the average. Massachusetts (+4.09%), Maryland (+3.57%), Texas (+3.46%) and California (+3.00%) are some examples of high-dollar, average-growth states.

A total of 42 states, Puerto Rico and Washington, D.C., experienced increased postsecondary R&D expenditures, with seven states growing by double digit amounts (mentioned above), and an additional 10 by more than 5%.

On the other end of the spectrum, the remaining eight states experienced a decrease in total postsecondary R&D expenditures, led by South Dakota (-9.12%), Mississippi (-3.06%), New Jersey (-2.93%) and Idaho (-2.74%).

The above map shows the 1-year percent change in total postsecondary R&D expenditures for each state, with a dropdown menu that can be used to select each 1-year period over the last decade.

10-Year

The most recent 10 years of data, from FY 2012-2021, shows a strong overall growth in postsecondary R&D expenditures with double digit increases in 45 states and Washington, D.C., decreases in just three states (South Dakota, -22.19%; Rhode Island, -14.05%; and Hawaii, -12.15%) and Puerto Rico (-18.36%).

On average, states experienced increases of approximately 32.80%, ranging from +101.37% (Nevada) to -22.19% (South Dakota) over that 10-year period. The states with the highest growth in total postsecondary R&D expenditures in addition to Nevada are Montana (+67.79%), Vermont (+64.90%) and Utah (+59.72%).

Click here for the data used in this article.