Useful Stats: Total research and development performance by state (2002-2016)

Despite its limitations, publicly available data on research and development (R&D) expenditures remains one of the best metrics for measuring state progress in the innovation economy. Defined as the sum of multiple National Science Foundation (NSF) measures – including business and industry R&D, higher education R&D, and R&D at federally funded centers – total R&D has skyrocketed nationwide over the past 15 years, though some states have experienced an outsized portion of this growth. Where has total R&D performance increased the most over the past 15 years? How has the composition of total R&D performance changed over this time? Perhaps most importantly, how has the intensity of R&D performance changed? Over the next three weeks, the Digest will explore the answers to these questions and more.

Data on total research and development stems from the NSF’s National Center for Science and Engineering Statistics’ (NCSES) National Patterns of R&D Resources series. In this article, SSTI has analyzed the available data for the most recent 15-years.

Although eight states performed more than $10 billion in total R&D in 2002, only California ($51 billion) exceeded the $15 billion mark. By 2016, however, 13 states had performed more than $10 billion in total R&D, including eight states performing more than $20 billion. The additional $83 billion in total R&D performed in California between those periods was more than one-third of the nation’s total increase during that time. 

The map below highlights total R&D in 2016, as well as changes over the previous 5-year, 10-year, and 15-year periods.

Even though Wyoming was the state that performed the smallest amount of R&D in 2016, it led all states in growth over 5-year, 10-year, and 15-year periods, a testament to its low base levels in 2002. Meanwhile, R&D expenditures have been stagnant or declined in West Virginia, Vermont and Alaska over the past 15-years.

Over the 15-year period, total R&D expenditures more than doubled in 12 states, led by Wyoming (265 percent increase), Missouri (190.7 percent), and Iowa (181.4 percent). Three states saw increases greater than 100 percent over the 10-year period, led by Wyoming (126.4 percent increase), Idaho (106.6 percent), and Iowa (101.2 percent). The states with the largest increases in total R&D expenditures over the most recent five-years of data were Wyoming (175.5 percent), Iowa (45.4 percent), and North Carolina (43.0 percent).

The chart below shows changes in overall R&D spending and in state rank for each year from 2002 to 2016. Iowa went from the 34^th ranked state in 2002 to the 28^th ranked state in 2016, the largest positive increase of any state, followed by North Carolina (16^th to 11^th) and Missouri (26^th to 21^st). Meanwhile, New Mexico went from 17^th to 24^th over that same time-period. 

Although data on total R&D expenditures are useful for practitioners as a proxy for innovation, there are several limitations. First, the data lag by several years, which may limit its usefulness for making present-day decisions. Furthermore, the data are reliant on surveys, so not all firms conducting R&D are necessarily included. This is especially true among the private sector, which accounts for the majority of R&D in the United States. Overall, R&D is a useful statistic for considering one aspect a state’s innovation economy strengths, but it should be complemented by other metrics to provide a more holistic view.

The table below shows high-level information for each state over the past 15-years. For more insight, stay tuned to future Digest issues.