Federal R&D Spending in the Tri-State Region

With federal research funders like the National Institutes of Health and the Department of Defense, the tri-state region is well positioned to advance research and development in the coming years.

Published January 1, 2001

By Frank B. Hicks, Ph.D., Allison L. C. de Cerreño, Ph.D., and Susan U. Raymond, Ph.D
Academy Contributors

Federal funding for research in the Tri-State region (New York, New Jersey, Connecticut) depends on broader trends in Federal budget allocation. While the Fiscal 2001 shows large increases for research and development (R&D), they come out of a historically shrinking discretionary pot.

In the early 1960’s, discretionary spending (that portion of the budget over which Congress has annual control) represented 70% of the total Federal budget. Today it is about one-third. While the overall budget itself has tripled in real terms since 1960, mandated entitlements have increased nearly ten-fold.

Hence, R&D must compete for resources with other societal and economic sectors within a narrowing portion of the overall budget. This fiscal year, science did itself proud. The final fiscal 2001 budget agreed to in December 2000 contains $91 billion in Federal funding for R&D, a 9% increase over the previous year. The big winner was the National Institutes of Health, with a 14.5% increase ($2.5 billion). The Department of Defense also registered just over $2.5 billion in gains, making the NIH and DOD the largest R&D winners in dollar terms.

All of which is good news for the Tri-State Region. Medical research and the continued presence of a strong DOD infrastructure position the Region to attract greater levels of Federal R&D funding in the coming years.

Federal R&D Funds in the Region

The Tri-State region received about $5.2 billion in Federal funding for research and development during 1999. While in New Jersey this represents only 11% of all statewide R&D expenditures, Federal resources make up 24.5% of R&D funding in Connecticut and 19.5% in New York.

In terms of per capita Federal R&D funds, all three states fall far below the national leaders and technology competitors. The highest concentrations of Federal resources are, unsurprisingly, in Maryland and Virginia, home to many Federal agencies. But both California and Massachusetts receive over twice as much Federal R&D funding per capita as any of the states in the region. Only in New Jersey did Federal funding growth rates outpace the national average.

Apart from funding for Federal laboratories in the region, Federal funds flow to academic research, private sector contracts, and cooperative agreements with both industrial and non-profit institutions.

The Academic Pipeline

The region’s academic institutions receive about $1.5 billion in research grants annually from the Federal government. In 1998, this funding represented more than 10,000 individual academic grants. In Connecticut and New York, academic grants represent one-third of all Federal R&D funding; in New Jersey, where industrial contracts play a much more important role, that portion is 13%.

Federal flows for academic research in the region tend to be highly concentrated. Yale University receives 81% of Connecticut’s academic grants. In New Jersey, Rutgers and Princeton together receive 70%; and in New York, which has a larger number of research universities, Columbia and Cornell together still account for 40% of Federal academic research grant funds.

Health and Defense

For academic institutions, health sector research capacity is critical. The Department of Health and Human Services is the source of 50% of the academic research grant funds in New Jersey, 75% in New York, and a whopping 83% in Connecticut.

Except in New York, however, the Department of Defense remains the largest supplier of overall Federal R&D funding, accounting for 61% of New Jersey’s flow and 50% of the flows to Connecticut.

Also read: Federal Lab and Research Funding in the Tri-State Region

Sources

• Executive Office of the President, Office of Management and Budget; American Association for the Advancement of Science; The Sciences, November/December 2000.
• NSF Science and Engineering Indicators 2000; “Discovery and Innovation: Federal Research and Development Activities in the Fifty States, District of Columbia and Puerto Rico,” RAND 2000.