Useful Stats

Fewer of the youngest and later stage innovation-driven companies are receiving private venture capital at a time when the country needs more of both to retain our global economic leadership, according to data released in the latest report from PitchBook and NVCA. Across 2024, United States VC has seen an increase in overall deal value (+$47 billion) despite a decrease in deal count (-936) since the prior year, reveals the Q4 2024 Venture Monitor report. Values for each metric still sit below the pandemic-induced highs in 2021 and 2022. By stage, 2024 has, to date, a larger proportion of early-stage and venture growth deals, balanced by a lower proportion of pre-seed/seed and late-stage deals.

This edition of Useful Stats will explore 10-year trends, from 2015 through 2024, in venture activity by stage and state using the Q4 2024 Venture Monitor report’s data.

Higher education R&D expenditures, while continuing to steadily increase, have not grown evenly across state lines. This matters to successful TBED policymakers because a strong R&D enterprise within a state’s public and private institutions of higher education can and should provide a consistent source of skilled workers, new technology, and sources for innovation-driven business growth. So where is R&D growing?

The most recent  Higher Education R&D (HERD) survey revealed the largest year-over-year percentage increase in higher education R&D since 2002 to 2003 and dollar increase across all fiscal years (FYs) captured by the survey. HERD expenditures breached the $100 billion mark in 2023, having grown 11% from $97.8 billion in 2022 to $108.8 billion in 2023 (7% in constant 2017 dollars, from $82.9 to $89 billion). Federally funded HERD expenditures continue to increase in dollars, but decrease in overall share, while business and institution funds grow as a proportion.

As seen in Figure 1, since 1973, the earliest data available, HERD expenditures have shown a consistent upward trend in both constant and current dollars. However, growth in current dollars has been more pronounced due to inflation. Expenditures reflect real growth when adjusted for inflation (constant 2017 dollars).

Personal income[1] has increased from $1.25 trillion in 1974 to $23.38 trillion in 2023 nationwide, a nearly nineteen-fold increase over the past 50 years. Meanwhile, per capita personal income (PCPI), a metric of personal income standardized by population, has only seen a twelvefold increase from $5,836 to $69,810 over the same period. SSTI reveals these numbers from its analysis of new U.S. Bureau of Economic Analysis (BEA) data.

SSTI also found that, since 1974, both the average and median annual percentage change in personal income are 6%, with just one drop (-3%) in the last half-century at the onset of the Great Recession from 2008 to 2009. PCPI follows a similar trend at a 5% average and median percentage change with just one drop (-4%) during the same years.

The United States Department of the Treasury’s (Treasury) new 2022-2023 State Small Business Credit Initiative (SSBCI) 2.0 Annual Report highlights the nearly $10 billion program to enhance access to capital for small businesses, particularly those in underserved communities. Data from the participating jurisdiction’s first 18 months—from August 5, 2022 through December 31, 2023—reveals approximately $750 million expended SSBCI dollars, resulting in $3.1 billion in overall new financing, including $2.6 billion in private investments, and 46,200 jobs reported expected to be created or retained (20,600 created and 25,600 retained). These funds have supported nearly 3,900 loans or investments, with 75% of transactions directed toward underserved businesses, including 40% for minority-owned and 31% for women-owned or controlled companies.

Manufacturing industries accounted for approximately $372 billion, or 54%, of all domestic business enterprise R&D (BERD) expenditures in 2022, up 36% from $274 billion in 2018. Despite this increase of nearly $100 billion over the past five years, the share of BERD expenditures in manufacturing industries has decreased eight percentage points from its 2018 value of 62%. Meanwhile, companies in nonmanufacturing industries captured by the BERD survey outpaced their counterpart’s growth, having increased $152 billion, or 91%, over the same period, leading to an eight percentage point increase in share of total—from 38% to 46%.

While both gross domestic product (GDP) and population have steadily increased across the United States over the last decade, the growth of business enterprise R&D (BERD) expenditures has surged ahead at an even faster pace. Nationwide, BERD as a percentage of GDP has jumped over 0.75 percentage points over the past decade, rising from 1.91% in 2013 to 2.66% in 2022, while BERD per capita has more than doubled from approximately $1,020 to $2,075 over the same time. This edition of Useful Stats will explore in depth the varied changes in BERD intensity metrics at the national and state levels over the most recent decade of available data.

The data used in this article is from the most BERD survey for business R&D values and the U.S. Bureau of Economic Analysis for GDP and population.

The Treasury Department has recently approved an additional $106 million in SSBCI dollars for tribal governments: $102 million as part of the Capital Program and $4 million as part of the Technical Assistance (TA) Grant Program. With this most recent wave of announcements, and including two $2 million Small Business Opportunity Program (SBOP) awards made to tribal governments, Treasury has now approved applications for over $520 million in overall SSBCI dollars to tribal governments.

As business R&D expenditures continue to increase nationwide, disparities between states deepen, an SSTI analysis of new Business Enterprise Research and Development (BERD) survey data reveals. States with the largest BERD values, including California, Washington, and Massachusetts, have all increased their share of overall domestically performed BERD values almost every year since 2013. Nearly 50% of the nation’s domestic business R&D expenditures occurred within the borders of these three states in 2022, up from 39% just a decade prior in 2013. California contained over a third of the nation's total value in 2022, totaling more than the bottom 43 states and Washington, D.C. combined.

Domestic business R&D expenditures have jumped 15% ($89 billion) from 2021 to 2022. This jump continues a decade-long trend of year-over-year increases, as a new 2022 Business Enterprise R&D (BERD) survey shows. Despite concerns over high inflation, with annual rates of 7% in 2021 and 6.5% in 2022, domestic BERD expenditures have also increased in constant USD each year. Adjusted to 2013 USD, expenditures increased 6% ($32.5 billion) from 2021 to 2022 and 71% ($228 billion) over the past 10 years since 2013.

SSTI sourced data for this article from the BERD survey’s 2013 to 2022 data releases. Inflation adjustments were performed by SSTI using the Federal Reserve Bank of Minneapolis’ Inflation Calculator.

State support for higher education in the United States over the last four decades can best be characterized as having fluctuations and shifts in priorities. Using fiscal year (FY) 1980 as a starting point, while overall state support for higher education has grown, it has done so with volatility driven in part by decreased revenue as a result of recessions, and it has frequently taken years for state support to recover to pre-recession levels. In four states, state support on a constant 1983-dollar basis is still less than was spent in 1980. Looking back at the impacts of the Great Recession of 2008 is even more illustrative of the long recovery period after recessions; in FY2024, just 20 states and Washington, D.C., spent more in constant dollars than they did in FY2008. An additional nine states surpassed their FY2008 spending levels at some point after FY2011 but did not maintain that through FY2024. In fact, just one state, North Dakota, has provided support for higher education above FY 2008 values in every year since.

In the last 20 years, college tuition has doubled, making tuition and required fees the major component of the rising costs of attending college. Figure 1 shows that the average tuition and fees at public four-year schools increased by 84% between the 1999-2000 and 2019-2020 academic years, far faster than the 15.7% increase in median household income during that period (note this period was chosen to avoid pandemic era swings in data).

Figure 1: Percentage change from reference year (1999) for bachelor’s tuition and required fees at 4-year universities and real median household income, fall 2000-2019.