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May 9 -- BEA is developing a new satellite account that measures research and development activity in a framework consistent with the measurement of gross domestic product (GDP) and other BEA statistics. The new statistics will provide a more comprehensive picture of the contribution of the R&D sector to the U.S. and state economies.

In the first milestone of this ongoing project, BEA issued experimental statistics in May 2024. These statistics include R&D’s contribution to GDP (known as R&D value added) and associated R&D employment and compensation for the nation and all 50 states and the District of Columbia.

These statistics can answer questions such as: Which states have the largest R&D value added? How many jobs in each state are supported by R&D activities? What are the leading R&D-producing industries across the nation?

Research and development activity accounted for 2.3 percent of the U.S. economy in 2021 . . . . [Between 2017 and 2021, total R&D value added rose 44 percent in current dollars.]

R&D as a share of each state’s gross domestic product, or GDP, ranged from 0.3 percent in Louisiana and Wyoming to 6.3 percent in New Mexico, home to federally funded Los Alamos National Laboratory and Sandia National Laboratories.

R&D activity is highly concentrated in the United States. The top ten R&D-producing states account for 70 percent of U.S. R&D value added. California alone accounts for almost a third of U.S. R&D. Other top R&D-producing states include Washington, Massachusetts, Texas, and New York.

Eighty-five percent of R&D value added is generated by the business sector, followed by government, and nonprofit institutions serving households. [Universities across all three sectors accounted for 9 percent.]

Within the business sector, the professional, scientific, and technical services industry accounts for 40 percent of business R&D value added.  Information (15 percent), chemical manufacturing (12 percent), and computer and electronic product manufacturing (11 percent) also account for sizable shares.  

There are four Excel files available for download—one each for value added, compensation, and employment as well as a bulk download file that contains all the statistics in a machine-readable format. Each file contains statistics on R&D activity at the national level and for each of the 50 states and the District of Columbia from 2017–2021.  

For each geography, R&D activity is presented at the aggregate level and by producing sector—business, nonprofit institutions serving households (NPISHs), and government. The business statistics show the R&D produced by all for-profit enterprises. The nonprofit statistics show the R&D produced by private universities and colleges and nonacademic nonprofits. The government statistics show the R&D produced by federal and state and local governments including public universities. The R&D produced by federally funded research and development centers (FFRDCs) is attributed to the sector of the administrator of the FFRDC.

For value added, some industry detail is provided for R&D-intensive industries. For employment and compensation, statistics are published separately for the manufacturing sector and the nonmanufacturing sector. An addendum combines the R&D activity of private nonprofit universities and colleges (LineCode 14) and public universities and colleges under state and local government (LineCode 20).

Research and (experimental) development comprises creative and systematic work undertaken to increase the stock of knowledge—including knowledge of humankind, culture, and society—and to devise new applications of available knowledge.

R&D value added consists of the value that an industry generates as part of R&D production after it has accounted for its costs of energy, materials, and services used up in R&D production.

R&D employment consists of all full-time and part-time wage and salary jobs in which workers are engaged in the production of R&D. Self-employed individuals and temporary workers are not included. R&D workers include researchers and technicians. Included are also support staff that directly and indirectly support production of R&D.

R&D compensation consists of the pay to employees (including wages and salaries as well as supplements to wages and salaries, such as employer contributions to pension funds and health insurance) for their R&D work during a given year. Earnings of self-employed individuals and temporary workers are not included.

Blog post: https://www.bea.gov/news/blog/2024-05-09/experimental-rd-value-added-statistics-us-and-states-now-available
R&D Satellite Account: https://www.bea.gov/data/special-topics/research-and-development-satellite-account
Methodology: https://www.bea.gov/sites/default/files/2024-05/research-and-development-satellite-account-technical-document.pdf

To help refine the methodology and presentation of these statistics, BEA is seeks user feedback. Please submit comments to RandD@bea.gov.

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