Half of U.S. business R&D concentrated in five states

Five states accounted for just over half of the $255 billion of research and development (R&D) companies paid for and performed in the United States in 2013, according to a new report from the National Center for Science and Engineering Statistics.

Business R&D is geographically concentrated in the United States to a greater degree than either gross domestic product (GDP) or population. The five states with the highest levels of business R&D performance — California, Massachusetts, Michigan, Texas and Washington — accounted for $133 billion, or 52 percent, of the total.

California alone accounted for $77 billion, or 30 percent, of self-funded business R&D — up from 25 percent five years ago. Between 2008 and 2013, California’s R&D performance grew at a faster pace than its economy as a whole, resulting in its R&D intensity — its ratio of business R&D to GDP — increasing from 2.8 percent to 3.5 percent.

Texas and New York had R&D intensities substantially below that of the nation as a whole, reflecting their higher concentration of less-R&D-intensive industries: oil and gas extraction in Texas and financial services in New York.

The top 10 states for R&D paid for and performed by U.S. companies are:

  • California — $77 billion.
  • Massachusetts — $14 billion.
  • Michigan — $14 billion.
  • Washington — $14 billion.
  • Texas — $13 billion.
  • Illinois — $12 billion.
  • New Jersey — $12 billion.
  • Pennsylvania — $10 billion.
  • New York — $9 billion.
  • Minnesota — $6 billion.

In four of the top 10 states, a single industry dominated business R&D. For Michigan, that industry was automobile manufacturing, which accounts for 74 percent of its total. Software publishers accounted for 62 percent of Washington’s total, and the pharmaceutical industry for 53 percent and 48 percent of New Jersey’s and Pennsylvania’s totals, respectively.

In addition to state data, the report also contained data on geographic areas with the largest amount of self-funded business R&D performance. The top three areas are:

  • San Jose-San Francisco-Oakland.
  • Los Angeles-Long Beach.
  • Seattle-Tacoma-Olympia.

The largest R&D industries represented in these areas vary. Computer and electronics manufacturing dominated the San Jose-San Francisco-Oakland area, while information technology and aerospace companies dominated the Seattle-Tacoma-Olympia area. For Los Angeles-Long Beach, no single industry accounted for a disproportionately large share of its R&D performance.

For more information, including the business R&D performance levels for all 50 states, read the full report.

Substack subscription form sign up
The material in this press release comes from the originating research organization. Content may be edited for style and length. Want more? Sign up for our daily email.