Many institutions of higher education spend millions of dollars each year on R&D, with 37 having spent over $1 billion in FY 2024. These expenditures are made to drive innovation and create new technologies, methodologies, and more. Past SSTI coverage of the new FY 2024 Higher Education Research and Development (HERD) Survey data release has explored the geographic spread of HERD expenditures at the state level. This edition of Useful Stats will explore HERD survey data at the institutional level for the 50 largest institutions by R&D expenditures and the sources of funds to allow them to conduct their work.
Useful Stats: How do the largest higher education institutions fund their R&D expenditures?
Useful Stats: Higher education R&D expenditures and intensity by state
Higher Education Research and Development (HERD) expenditures grew in every state between Fiscal years (FYs) 2010 and 2024, rising 92% nationally over the 15-year period. However, when you adjust for inflation, five states and Puerto Rico instead experienced a real decline in HERD expenditures. Despite this broad growth, HERD expenditures remain highly concentrated, with five states having accounted for nearly 40% of all higher education R&D expenditures nationwide in FY 2024.
When measured relative to state economies, disparities are even more pronounced; nationally, HERD expenditures totaled 0.40% of gross domestic product (GDP) in FY 2024, a level of intensity largely unchanged over the past decade. At the state level, however, HERD intensity ranged from 1.21% in Maryland to 0.10% in Puerto Rico, with several large economies—including California, Texas, Florida, and Washington—falling below the national level.
Useful Stats: Higher education R&D expenditures reach $117 billion in FY 2024
Higher Education R&D expenditures jumped 8%, or nearly $9 billion, from fiscal year (FY) 2023 to 2024, reaching an all-time high of over $117 billion, reveals new Higher Education R&D (HERD) survey data. The funding sources of HERD expenditures remain proportionally unchanged from the prior year, with all sources increasing, and the federal government ($5 billion) and institution funds ($2.5 billion) accounting for the largest dollar increases.
Adjusted for inflation, overall HERD expenditures increased by 5%—the second largest year-over-year increase in the past decade—while all sources of funds except business increased.
Useful Stats: A standardized look at state-level academic S&E article output
States invest heavily in academic research with the expectation that these efforts will advance scientific knowledge, support innovative industries, and strengthen local talent pipelines. Comparing research performance across state lines is difficult due to differences in academic landscapes: some may have large medical schools with high-cost labs, while others have research-active public universities in lower-cost fields or are more pedagogically focused.
Which states stand to benefit the most from the new Opportunity Zone criteria?
Just 19% of the approximately 25,000 census tracts potentially eligible for Opportunity Zone (OZ) designation are “More likely to attract OZ investment, with larger impact,” per the Urban Institute’s new OZ Designation Tool.1 The majority (68%) of potentially eligible tracts were found to be “Less likely to attract OZ investment,” while the remaining 13% were determined likely to attract capital regardless of OZ designation. Breaking the data down further, this article showcases state-level aggregations of the percentage of potentially eligible tracts across each categorization to paint a picture of which states stand to benefit the most from the OZ program based on the count of tracts likely to receive investments.
Treasury updates to SSBCI FAQs and a look at state fund deployments
The U.S. Department of the Treasury (Treasury) recently issued three new FAQs for the State Small Business Credit Initiative 2.0 (SSBCI) program. These FAQs clarify and reiterate the timeline for the end of the Capital Program, and the deadlines by which participating jurisdictions must request disbursement of any remaining allocated Capital Program funds.
In summary:
- All disbursement, technical support, and other program actions performed by Treasury will cease on March 11, 2028 (FAQ #8 in the general section).
- All Capital Program disbursement requests must be submitted to Treasury by December 31, 2027 (FAQ #4 under Section III.b)
- Treasury expects to terminate disbursements to jurisdictions that have not qualified for their second tranche disbursement by their three-year anniversaries (FAQ #1 in Section III.c)
SSTI has confirmed with the SSBCI team at Treasury that no states have failed to meet their three-year deadline, although we recognize this to be an ongoing concern as some jurisdictions’ allocation agreement dates are as recent as mid-2024.
Useful Stats: Business R&D continues to consolidate in top states
With federal R&D investments unlikely to keep pace with inflation or international competition based on the administration’s budget request, cuts to existing research grants, and Congress’s inability to pass a budget, business R&D investments become more critical for sustaining the competitiveness of regional innovation economies. Trends evident in new data released by the National Science Foundation point to areas of potential concern or need for state TBED policy attention and potential adjustment: business R&D is growing even more concentrated geographically, and for many areas of the country business investments likely are not growing at a sufficient pace to maintain the regions’ innovation capacity.
Useful Stats: Growth in real business R&D expenditures comes to a halt in 2023
From 2022 to 2023, domestic R&D expenditures increased 4%, or $29 billion, but remained nearly unchanged when adjusted for inflation. This apparent slowdown follows a streak averaging nearly 12% ($59 billion) year-over-year growth from 2018 to 2022, and 8% over the past decade from 2014 to 2023. Adjusting for inflation paints a different picture of the growth trends, with a more modest annual average of 8% from 2018 to 2022 and 6% over the past decade. In this edition of Useful Stats, SSTI uses new Business Enterprise R&D (BERD) survey data to explore business R&D expenditures since 2009. Then, we present the data by sector and industry, allowing for closer analysis of which business R&D see the most investment in the U.S.
Refer to the Data Notes section at the end of this article for more details on the data and its limitations.
Useful Stats: R&D's contributions to state economies
Like the broader metric of R&D intensity, the prominence of R&D value added in a state’s economic output has shifted within several states over the past decade. Does it matter? For sustaining a state’s innovation competitiveness, it may, and subsequently it is important to know for many state and regional TBED initiatives. Proximity to the conduct of R&D has been well documented in empirical research to support strong regional innovation economies. Subsequently many TBED policies are designed to increase and maintain R&D activity within those boundaries as well as ensure the localized spillover effects are maximized. Determining where R&D activity is thriving and the size of its value added to the state’s GDP, particularly manufacturing-related R&D, may help inform those policy decisions. SSTI explores the latest data on state R&D value added in this Useful Stats article.
Useful Stats: Examining county-level employment and establishments by sector
Understanding the composition of local economies requires looking beyond broad statewide or national trends. County-level data reveals the unique mix, or lack thereof, of industries and businesses in each area. Policy makers, by identifying which sectors drive employment and business activity within a locality, can influence the impact and design of regional innovation strategies to reflect local realities and potential.
The U.S. Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW) allows examination of county-level employment and establishment counts across all private sectors at the 2-digit NAICS level. In this article, SSTI uses annualized private sector data for all provided 2-digit NAICS sectors at the county level for 2015 and 2024.
Useful Stats: Where is US manufacturing? A county-level look at subsector-specific data
Despite a decades-long decline in its share of American jobs, manufacturing remains a foundational part of the U.S. economy as the third largest contributor to its gross domestic product (GDP). Despite the sector’s share of overall U.S. employment declining over time, manufacturing continues to anchor many local economies. In this edition of Useful Stats, SSTI unveils trends shaping the manufacturing landscape, from areas of sustained growth to places undergoing structural change, by examining employment and establishment data from the U.S. Bureau of Labor Statistics’ (BLS) Quarterly Census of Employment and Wages (QCEW) at the county level.
Federal obligations for higher-ed S&E near an inflation-adjusted all-time high in 2023
In fiscal year (FY) 2023, federal obligations for science and engineering (S&E) to universities and colleges totaled $49 billion—$29 billion more than FY 2000, and a 10% increase from the prior year. The growth is less rapid when adjusted for inflation (2017 USD), with just over $40 billion in real obligations in FY 2023, a 5% increase over the year prior and $12.6 billion (or 46%) increase over the FY 2000 value. Each year, approximately 90% of these federal obligations for higher education S&E are allotted to R&D activities, directly supporting key innovation activities nationwide.
This article uses data from The Survey of Federal Science and Engineering Support to Universities, Colleges, and Nonprofit Institutions—the sole source of comprehensive, institutional-level data on federal science and engineering funding to academia and nonprofits—to provide breakdowns of federal obligations for S&E to universities and colleges at the national and state levels.