US Business R&D Concentrated in Major Conurbations

By September 26, 2012

US companies tend to perform their research work in just a few geographical areas, predominantly the west coast and eastern seaboard urban regions.

Companies in the United States carry out most of their research and development work in a small number of geographical areas, according to the Business R&D and Innovation Survey (BRDIS) published recently by the National Science Foundation. The survey shows that the two favourite spots for corporate R&D are the San Jose-San Francisco-Oakland area and the New York-Newark-Bridgeport conurbation, each of which is defined by the Federal Office of Management and Budget as a combined statistical area (CSA).  In these two areas alone, major corporate R&D spenders reported carrying out a total of $29.3 billion worth of research work over the four years to 2008 and 19% of the 2,370 R&D-heavy companies responding to the survey in 2008 said their largest research facility was situated in one of these two CSAs. These respondents accounted for 74% of the $232.5 billion spent on R&D in the United States in 2008.  Of this total figure, $156.6 billion worth of research was performed in the ten US states showing the highest levels of R&D performance, the BRDIS reveals. Looking only at their single main R&D location, the 2,370 companies polled spent an estimated total of $100.5 billion on research and development.

Computers, electronics and planes have gone west

Joining San Jose-San Francisco-Oakland and New York-Newark-Bridgeport as the third most concentrated R&D area in the United States is the Seattle-Tacoma-Olympia conurbation. These three CSAs also come out top in terms of patents filed with the United States Patent and Trademark Office.  Of course each geographical region has its own industrial specialisation. The state of California – mainly home to computer and electronic products manufacturers – accounts for 23% of total US research spending and half of all R&D investment by US-based semi-conductor makers. Washington, the west coast state in which the Seattle-Tacoma-Olympia CSA is located, is dominated by information technology and aerospace companies. For example, while the software industry performs 12% of overall US business R&D, it accounts for 51% of Washington state’s total company research spend.

Pharmaceuticals still strong back east

Meanwhile the New York-Newark-Bridgeport area is dominated by pharmaceutical and chemical companies, notably the states of New Jersey and Connecticut, where 73% of total business-related research investment is in pharmaceuticals. In fact this industry carries out 19% of all company R&D in the United States, more than any other single sector, and performs significant levels of R&D in eight of the top ten-ranked US states – the ones mentioned above plus New York, Massachusetts, Pennsylvania and Illinois, the exceptions being oil-and-gas-dominated Texas and automotive specialist Michigan. Together the eight states account for fully 84% of all pharmaceuticals research and development in the United States.

Legal mentions © L’Atelier BNP Paribas