Business R&D activity has been historically concentrated in a few states and became even more so in 2017, according to a National Science Foundation issue brief on the latest Business Research & Development and Innovation Survey (BRDIS).

Across the U.S., the federal government provided 53 percent of R&D funding at institutions of higher education in FY 2018. Those institutions provided 26 percent of the funding themselves, and most of the remainder was provided by a mix of nonprofit organizations (7 percent), industry (6 percent), and state and local government (5 percent). The specific contributions varied from state to state, however, with some relying more on specific relationships to support R&D within the state.

The SBIR/STTR program, which dubs itself as “America’s Seed Fund,” is one of the broadest forms of early-stage capital available to small technology companies. During the five-year period from 2013 to 2017, the 11 federal agencies participating in the SBIR/STTR program distributed 25,524 awards. Using charts, maps, and a downloadable spreadsheet, this Digest article looks at trends in SBIR/STTR awards by state over the period, including the companies with the most awards and states where SBIR/STTR awards outnumber VC deals.

Last week, SSTI examined the geography of “America’s Seed Fund,” the SBIR/STTR awards, on a state-by-state basis. A look at how the more than 25,500 awards were distributed at the regional level over the five-year period from 2013 to 2017 yields additional insight. The metropolitan areas with the largest concentrations of SBIR/STTR awards include knowledge hubs with large universities and access to federal R&D, such as Boston, Los Angeles, and Washington D.C.

Last week, SSTI looked at recently released data on venture capital dollars and deals by state, finding that total investment has skyrocketed but remains heavily concentrated in a few markets. This week we examine this data through two additional lenses: VC investment intensity and VC investment per technology startup.

Earlier this month, the Bureau of Economic Analysis (BEA) published its 2017 estimates on state-level real gross domestic product (GDP). Per-capita gross product is a useful metric because it can show a state’s relative performance against its peers and over time. SSTI has prepared a spreadsheet showing 10 years of real per capita gross product by state, as well as an interactive map showing changes over the 1-year, 5-year, and 10-year periods. As more data becomes available, a future Digest issue will cover this topic at the metropolitan level. 

The growth and intensity of higher education R&D (HERD) expenditures varies considerably across metropolitan areas, a recent SSTI analysis of National Science Foundation data finds. New York ($4.3 billion), Boston ($3.2 billion), and Baltimore ($2.9 billion) had the highest overall levels of HERD expenditures in 2016. In that same year, Ithaca, New York (19.1 percent), State College, Pennsylvania (9.5 percent), and College Station, Texas (9.4 percent) had the highest levels of HERD intensity – measured as the share of HERD expenditures to gross metropolitan product.

This edition of Useful Stats examines — by state and over the period from 2000 to 2018 — how many new establishments were founded, how many jobs these new establishments created, how many establishments closed, and how many jobs were lost from those closing establishments. In only one year, the last year of the period, 2018, all states experienced positive net gains in employment and establishments, based on data from the Bureau of Labor Statistics.

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.

While rankings and annual indices are catnip for some looking to gain attention for their latest rankings, SSTI has always argued that it’s long-term trends that give the best sense of where a state or region stands. With recent release of income data, SSTI has examined the last 34 years data in median household income for each state. SSTI found that while median household income — adjusted to 2018 dollars — has risen in nearly every state and the U.S. since 1984 with an average annual rate of increase of 0.8 percent, the growth, not surprisingly, varies widely among individual states.

Taking a deeper dive into R&D expenditures at U.S. institutions of higher education, this week’s edition of Useful Stats examines the fields in which this R&D was performed at the metropolitan level in 2018.

Although changes in gross domestic product (GDP) give us an idea of how economies are changing, this measure fails to tell the full story. This edition of Useful Stats examines county-level GDP-per-capita, the measure of economic output for each resident in an area. What we see is strongly skewed data with high 2018 GDP-per-capita levels and high 10-year growth rates concentrated primarily in low population-high output counties.

Expenditures in higher education R&D (HERD) grew in FY 2018, increasing by $4.1 billion over FY 2017, the largest year-over-year increase since FY 2010-2011 according to an SSTI analysis of recently released data from the National Science Foundation’s National Center for Science and Engineering Statistics. For the 10-year period from FY 2009 to FY 2018, HERD grew by 38.4 percent nationally, representing an increase of nearly $22 billion.

The largest increases in per capita income for metropolitan and micropolitan statistical areas (MSAs) within the United States have occurred primarily within the Western, Mountain and Great Lakes states, according to data recently released by the Bureau of Economic Analysis. Nearly every MSA experienced greater income levels in 2018 when compared to their 10-year average.

The total number of science and engineering (S&E) degrees awarded grew from 520,474 in 2000 to 955,401 in 2018, an increase of 83 percent, according to National Science Foundation (NSF) data. The portion of S&E degrees awarded compared to all degrees has increased as well, from a 2000 average of 31 percent of all degrees awarded to an average of 34 percent in 2018. S&E degrees includes bachelors, masters and doctoral degrees in areas such as life sciences, physical sciences and engineering.

While business investments towards research and development have varied among states, the overall trend throughout the country has been a positive one. Business R&D funding has weathered two recessions over the past 20 years, with many states seeing investments grow beyond their pre-recession levels. While the scope of COVID-19’s economic impact continues to grow, business R&D investment has shown a strong history of recovering from, and building beyond, national financial downturns.

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.

The National Science Foundation (NSF), the fifth largest distributor of SBIR awards among federal agencies, received more than 20,000 proposals over the decade long period from 2008 to 2017, approving more than 3,600 (16.8 percent), according to an SSTI analysis of NSF data. NSF SBIR awards are the least concentrated of all federal agencies, as measured by share of awards going to firms with more than 10+ awards.

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).

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.

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.

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.

As explored in last week’s Digest, the presence of Eds and Meds institutions can positively influence the levels of human capital in a region, but the need to keep costs low can hinder their overall growth. SSTI’s analysis subsequently found that employment in Eds and Meds industries increased in every state from 2005 to 2015. This article looks at Eds and Meds employment for the largest metropolitan areas in the United States. Mid-sized regions in the Northeast like Rochester, New York (4.4 percentage points), New Haven, Connecticut (2.9 percentage points), and Harrisburg, Pennsylvania (2.3 percentage points) experienced the largest growth in per-capita employment in Eds and Meds industries between 2010 and 2015.

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.

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.