Useful Stats

Home to the Research Triangle Park and top-tier research universities like Duke University and the University of North Carolina at Chapel Hill, the Durham-Chapel Hill metropolitan area led all regions in per capita NIH funding in FY 2018 and placed sixth in total funding that year, according to a new analysis by SSTI. This edition of Useful Stats looks at all NIH awards at the regional level over the five-year period between FY 2014 and FY 2018. Boston led all regions in total NIH funding in FY 2018, while NIH funding in the Washington, D.C., region increased by the greatest percentage over the five-year period among major metropolitan areas.

As the largest public funder of biomedical research in the world, NIH awards are of particular importance to the technology-based economic development community. Including new data for FY 2017 and FY 2018, this edition of Useful Stats serves as an update to an August 2017 article highlighting NIH awards by state over the past decade. In FY 2018, NIH awarded a total of $28.3 billion in funds to the 50 states and territories. Of the total amount awarded in 2018, slightly less than two thirds (65.3 percent) went to the top 10 states. This share is slightly lower than in 2017 (65.6 percent), the same as in 2014 (65.3 percent) and slightly higher than in 2009 (66.1 percent).

This month, SSTI research has examined changes in total R&D and total R&D intensity for each state over a 15-year period from 2002 to 2016. In this final installment of the series, this article looks at how the performance of R&D in the states changed over time. In half of the states (25 states), the share of total R&D performed by colleges and universities increased more than any performer (e.g., industry, federal government) from 2002 to 2016. Meanwhile, 20 states saw industry’s share of total R&D performance increase more than any other performer. The share of total R&D performed by industry increased the most in Wyoming (32.7 percentage point increase), followed by Iowa (19.6 percentage point increase) and Missouri (18.5 percentage point increase).

How has the intensity of research and development (R&D) performance changed across states and over time? As a follow up to an article in last week’s Digest that examined changes in total R&D expenditures for each state over the 15-year period from 2002 to 2016, this week’s Useful Stats focuses on R&D intensity. Overall R&D intensity is defined as total R&D expenditures (the sum of all R&D performed by industry, federal labs and agencies, colleges and universities, and other research institutions in a state) as a share of each state’s gross domestic product in a given year.  Notably, five states stand out for exceeding the national average in both R&D intensity and increases in R&D intensity from 2002 to 2016: Oregon, Delaware, California, Maryland, and Massachusetts.

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 North Dakota’s per capita gross domestic product (GDP) has declined since 2013, the energy boom in earlier years gave the state the fastest increase over the past 10- and 20-year periods, according to an SSTI analysis of recently updated state GDP data from the Bureau of Economic Analysis. Beyond North Dakota, the 10 years from 2008 to 2018 benefitted per capita GDP in states with a prominent knowledge economy, led by New York, California, Washington and Massachusetts. In general, per-capita gross product serves as a useful metric because it can show a state’s relative economic performance against its peers and over time. This article examines state GDP per capita over the past 20 years.*

Many regional economic development strategies emphasize employment in manufacturing or high-tech, as these industries tend to provide well-paying jobs. Through an analysis of American Community Survey five-year data for 2013-2017, SSTI assessed state-level employment concentration within these sectors.

The portion of a state’s employment based high-tech sectors ranged from 3.8 percent to 13.6 percent (or 14.4 percent for D.C.), from 2013-2017 (see “methodology” for a detailed description of what industries are included). Nationally, approximately 8.2 percent of the public is employed in high-tech industries.

The distribution of states is slightly skewed, with 35 states below the national benchmark and 16 states (and D.C.) above 8.2 percent. Washington (13.6 percent), Massachusetts (13.1 percent), Virginia (12.3 percent), and Colorado (12.0 percent) are at the high end of the spectrum. The concentration of state employment share in the high-tech sector is visible in the map, below.

The U.S. unemployment rate is near its 50-year low, but the portion of the population in the labor force is also near a 40-year low. Because business expansion is difficult during periods of extremely low unemployment, a key economic development question is how much the labor force participation rate may increase — bringing more potential employees to the job market and easing the hiring crunch for employers.

An SSTI analysis of American Community Survey (ACS) data from 2013-2017 suggests that there may not be much potential growth for the labor force, at least among those in the prime working ages of 25-54. The participation rate for this group is approximately 82 percent across the country, according to the analysis, and only an additional one percent consider themselves willing to work in the near future (e.g., after a “temporary illness” or have been looking too long to counted as unemployed).

Outside of the private sector, colleges and universities perform the vast majority of R&D in the United States – but where do these funds come from? An SSTI analysis of data from the National Science Foundation’s National Center for Science and Engineering Statistics (NSF NCSES) finds that, across the country, the federal government was the source of more than half (53.5 percent) of all R&D performed at colleges and universities in 2017. Institutional funds (25.1 percent), nonprofit organizations (6.8 percent), businesses (5.9 percent), state and local governments (5.6 percent), and other sources (3.0 percent) comprised the remaining sources of higher education R&D funding. The interactive chart below shows the breakdown of funding sources for research and development at colleges and universities for each state.

Nearly three-quarters of all research and development was performed by the private sector in fiscal year 2016, though this share differed greatly across the states, according to an SSTI analysis of recently released data from the National Science Foundation’s National Center for Science and Engineering Statistics (NSF NCSES). Delaware showed the greatest concentration of business R&D (90.5 percent of all R&D in the state), while Tennessee had the most diversified R&D portfolio with a roughly even distribution of R&D performed by businesses, higher education and federally funded R&D centers (FFRDC’s). The interactive chart below shows the breakdown of performers of research and development for each state.

]

From 2000 to 2017, the share of the U.S. population with a bachelor’s degree (or higher) increased from 24 percent to 31 percent. Meanwhile, the share of the population with a high school education (or less) decreased from 48 percent to 40 percent. All states experienced these directional changes in educational attainment. State performance relative to other states was relatively static, particularly for those performing best and worst in 2000, with few changes in the rankings of states by share of the population with a bachelor’s degree.

These measurements of educational attainment are from U.S. Census data in 2000 and the five-year estimates from the American Community Survey for 2012 (collecting data from 2008-2012) and 2017 (2013-2017). The summary file SSTI created for this article is available here.

For states and metropolitan areas across the country, cultivating a skilled and educated workforce is a critical part of economic development. In 2017, metropolitan areas anchored by major research universities – regions like Boulder, Ann Arbor, and Corvallis – had the highest share of adults 25+ with at least a bachelor’s degree, according to an SSTI analysis of recent census data. In a ten-year comparison of major metro areas, the share of population with at least a bachelor’s degree increased the most in Asheville (growing 6.9 percentage points to 34.1 percent), Pittsburgh (growing 6.3 percentage points to 33.5 percent), and Denver (growing 6.1 percentage points to 42.1 percent).

For the purposes of this piece, “educational attainment” specifically refers to degrees at the bachelor’s level and higher (BA+). Data is based on three separate American Community Survey estimates:  The recently released 2013-2017 American Community Survey 5-Year Estimates, the 2008-2012 American Community Survey 5-Year Estimates, and the 2005-2007 American Community Survey 3-Year Estimates.