Can public policy help make the geographic distribution of federal R&D more equitable?

Established in 1979 as a way to help broaden the distribution of federal funds for research and development (R&D), specifically at the National Science Foundation (NSF), one of the most important initiatives funneling research and development funds to states with smaller populations is the Experimental Program to Stimulate Competitive Research (EPSCoR). As more attention is paid to the growing inequality between states, programs like EPSCoR are worthy of additional consideration. Although the majority of states have seen their share of federal science and engineering R&D increase as part of the EPSCoR program, the distribution of federal funds for R&D remains very uneven.

As Barry Bozeman and Jan Youtie discussed in a journal article last fall, EPSCoR was developed in the late 1970’s and early 1980’s as a result of a growing concern among smaller states that federal funds for research and development were becoming overly concentrated. Speaking at an OECD panel earlier this year, Kei Koizumi, a senior science policy adviser for the American Association for the Advancement of Science, suggested that concentrated research funding distribution levels could hinder states’ economic development, growth, and jobs that the science and technology enterprise system develops, according to Science. EPSCoR offers one strategy to increase funds for R&D to smaller states.

As a whole, the size and scope of the EPSCoR program has changed over time. Even though the original focus of EPSCoR was to build the infrastructure that would make smaller states more competitive for federal R&D funds, its focus has expanded to include STEM education, economic development, and minority inclusion, Bozeman and Youtie note. Originally, the program’s first cohort had just five states – Arkansas, Maine, Montana, South Carolina, and West Virginia – and one agency, the NSF. As the chart below describes, the program had grown to 27 eligible states across five agencies in the most recent fiscal year, according to the Congressional Research Service.

Bozeman and Youtie suggest that arguments surrounding NSF’s EPSCoR program are two-fold. First, although they find that there is a need for greater geographic equality, there is an argument to be made that the scientific merit of NSF proposals should guide grant-making decisions, not perceived social impact. Second, they propose that, even with EPSCoR in place, it has been unsuccessful at leveling the playing fields for university researchers in underrepresented states. 

On this second criticism, an analysis of data from the National Science Foundation on federal funds for research and development suggests that the proportion of funding going to the top three, top five, top 10, and top 25 states has indeed remained remarkably consistent over the past four decades – with one recent exception.

Between FY 2011 and FY 2012, something curious happened: federal funding for R&D in California decreased by 24 percent, a decline of more than $4.7 billion. At the same time, total federal funds for R&D increased by $3.2 billion, or 2.4 percent. More than half of states experienced a decline from 2011 to 2012, but California’s was large enough that the share of total funding going to the bottom 25 states would more than double, from 10.9 percent to 22.1 percent. Their share would stay this way until 2016, the most recent year for which data was available.

In 2016, federal funds for R&D decreased by nearly $13.5 billion (10.7 percent)., This substantial decrease in total federal funds for R&D nationwide from 2015 to 2016 mostly returned funding distribution to their pre-2011 levels.  The majority of this decline came from a $15 billion (67 percent) decrease in R&D spending at the Department of the Air Force within the Department of Defense. Total R&D at all other agencies increased by approximately $1.5 billion from 2015 to 2016.

Taken together, this could suggest that simply adding new funds to the totals that are accumulated by the bottom half of states will not address the inequitable distribution of resources. Instead, there may be a need for a broader, more structural change in how federal funds for R&D are allocated.

Despite the total share of federal funds for R&D going to the bottom 25 states (an imperfect proxy for EPSCoR) remaining steady, nearly every EPSCoR state has increased its overall federal R&D funding and its percentage total available funds. Using NSF data, the chart below looks at the progress made by five EPSCoR cohorts. As a note, the most recent EPSCoR states are combined into the 2000 cohort. The bar on the left shows the share of total NSF funds going to a cohort of EPSCoR states during their first five years in the program. The bar on the right shows the share of total NSF funds going to a cohort of EPSCoR states during the most recent five-year period. Growth has occurred across all EPSCoR cohorts. Although recent EPSCoR states had a higher share of NSF funds during the initial period, they have also experienced increased share. 

The interactive graph below charts this progress at the state level. The states with the biggest gaps between their initial five-year average and the most recent five-year average are South Carolina, Nebraska, and Montana. In each of these states, the differences were greater than 0.25 percentage points. Hawaii, Puerto Rico and Alaska were the only states where initial five-year averages were actually higher than the most recent-five year averages, though the differences were minute.

Ultimately, when it comes to the distribution of federal R&D funding, there are two main takeaways. The first is that the uneven dissemination of federal funds for R&D has changed little over the decades. The second is that, within certain states and certain agencies, the EPSCoR program has been effective at increasing federal funds.

Moving forward, more research is needed to determine why broadening participation in the federal research enterprise is a worthy goal, and if so, which strategies can best accomplish such an endeavor. Some members of Congress have proposed using a per-capita formula that emphasizes a state’s population. SSTI’s vice president, Mark Skinner, has suggested a more relevant baseline, such as the number of scientists and engineers in a state. Alternatively, maybe states are the wrong unit of measurement altogether – instead, maybe one should focus on inequality between institutions or between metropolitan areas.