Featured Indicator: R&D Intensity

National Science Foundation (NSF) R&D Intensity

The National Science Foundation’s (NSF) National Patterns of R&D Resources provides data on the levels and key trends of the performance and funding of research and experimental development (R&D) in the United States. This report compiles data from national surveys of the R&D expenditures and funding of the organizations that perform the bulk of U.S. R&D – including businesses, federal and nonfederal government, higher education, and other nonprofit organizations. 

Here at Camoin, we like to use this data to get an understanding of the R&D activity being undertaken on the state level. In addition to providing R&D expenditures by performing sector and source of funds, this report also includes an R&D intensity indicator, which is a good way to compare investment in innovation across states.

What’s the data telling us?

In this case, R&D intensity is the ratio of total R&D performed in a state to its state GDP. Oftentimes, R&D intensity is also calculated for a specific industry, company, or country.

Using the NSF R&D intensity data we find that there is a wide range of ratios across states. In 2016, the most recent year for which data is available, R&D intensity ranges from a low of 0.43 in Louisiana to a high of 6.76 in New Mexico. When ranked, the states with the highest R&D intensity are:

1. New Mexico – 6.76

2. Massachusetts – 5.62

3. Maryland – 5.71

4. California – 5.16

5. Washington – 4.8

The states with the lowest R&D intensity are:

50. Louisiana - 0.43

49. Nevada – 0.53

48. Arkansas – 0.59

47. South Dakota – 0.59

46. Alaska – 0.60

New Mexico is often the leader in this indicator due to the high concentration of R&D activities at two large federally funded research and development centers (FFRDCs), Los Alamos and Sandia National Laboratories, and the state’s relatively small gross domestic product.

Why is this important?

R&D is a critical component of innovation. Investment in R&D results in new knowledge and technologies which provide the foundation for new economic growth. NSF’s measure of R&D intensity is useful for us as economic developers to use as a proxy for level of innovation activity and to make comparisons across states.

For more information on NSF’s National Patterns of R&D Resources, including other available data, check out their website.

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