Which States Are Winning the Business R&D Race?

The National Science Foundation collects and releases a veritable fire hose of science- and innovation-related statistics that never get the attention that they deserve.* For example, earlier this year the NSF published a study entitled “Businesses Concentrate Their R&D in a Small Number of Geographic Areas in the United States.”

This study should be required reading for anyone interested in how the Innovation Economy has developed geographically. I’ve taken the liberty of doing some calculations on just a small portion of the reported data (there is much much more):

Let’s start with the ordering. California’s rank as #1 is no surprise. But New Jersey’s ranking as #2 and strong growth is unanticipated (though it’s consistent with NJ’s relatively high ranking in our Geography of the App Economy study).  New Jersey R&D grew almost as fast as Massachusetts over the 1987-2008 period.

The R&D spending in NJ, PA, and CT came mainly from the pharma industry.  I’m going to look to see whether these states have tried to build on their advantages, or whether they have let them dissipate.

Also a surprise is Michigan’s continued high ranking. Auto industry R&D has not been growing very fast. Nevertheless, the industry has poured an enormous amount of money into Michigan over a long period of time, providing a potential base for future tech growth. Indeed, our upcoming study on tech and economic development identifies the Detroit area as having a very interesting cluster of tech-related companies.

More to come.

*Full disclosure–I serve on a National Academy of Sciences panel which is conducting “a study of the status of the science, technology, and innovation (STI) indicators that are currently developed and published by the National Science Foundation’s (NSF) National Center for Science and Engineering Statistics (NCSES).” This post uses only public information contained in the cited study.

Federal Support for Networking and IT R&D: Much Less than Meets the Eye

Good news:  According to the federal budget,  about $4 billion per year goes for networking and information technology (NIT) R&D. (see here)

Bad news: “The Nation is actually investing far less in NIT R&D than is shown in the Federal budget.

That’s according to an authoritative new report, Designing a Digital Future: Federally-Funded Research and Development in Networking and Information Technology, from the President’s Council of Advisors on Science and Technology. Here’s what they have to say: 

The aggregate NITRD crosscut budget significantly overstates the actual Federal investment in NIT R&D. By leading policymakers to believe that we are spending much more on such activities than is actually the case, this discrepancy contributes to a substantial, systematic underinvestment in an area that is critical to our national and economic security.

And then they go on to say.

Most obviously, a large portion of the “High End Computing Infrastructure and Applications” budget category, which accounts for roughly $1.5 billion of the $4.3 billion NITRD total, is attributable to computational infrastructure used to conduct R&D in other fields, and not to NIT R&D or to infrastructure for NIT R&D.

Beyond this, however, various agencies include in their reports for other NITRD budget categories investments in NIT that support R&D in non-NIT fields. The laudable transparency of NIH’s NITRD grant reporting allowed an expert in NIT at the Science and Technology Policy Institute (STPI) to review the abstracts of the top 100 awards (by award size) in NIH’s 2009 NITRD crosscut for actual NIT R&D content. STPI developed a 14-part coding scheme to categorize the 100 projects. The analysis showed that of the 95 projects with available abstracts, only 4 appear to be making a contribution to actual NIT R&D, such as novel computer science methods, novel simulation methods, or novel system design and computing methods. Another 14 projects could be considered “borderline” although they seem to focus on NIT development alone. The remaining 77 of the 95 projects with available abstracts appear to have no NIT R&D content. (For example, they may involve NIT infrastructure to support biomedical or biochemical R&D, but with no novel NIT R&D contribution.)

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In short, STPI concluded that 86% of these awards, by dollar value, have no NIT R&D content; 3% could not be assessed, 9% were judged borderline, and 2% were judged to be making a contribution to actual NIT R&D. Although other agencies do not report NIT R&D spending in sufficient detail to make the same analysis possible, it seems likely that in many cases a similar confusion in classification of NITRD investment occurs.

These findings highlight both the increasing ubiquity of NIT infrastructure for conducting R&D in many fields and the difference between this infrastructure and actual NIT R&D – work that makes a novel contribution to NIT.

I draw two conclusions from this.  First, the U.S. has made and continues to make an enormous bet on biosciences as the  driving force for future economic growth.  That’s shown by our pattern of federal research support.

Second,  if we want to maintain our lead in networking and information technology research, we need to put more federal dollars there. Now.