institutional support and external support from industry, foundations, and other nonprofit institutions.

The distribution of nonfederal support is reported in the same field categories used in the Federal Funds Survey, but basic and applied research are not reported separately and development expenditures are included in the data. The 1993–1999 results are shown in Annex Table 5–1. The portfolio differs significantly from that of federally funded university research—with an even greater emphasis on the biological and medical sciences—but the directions and magnitude of changes in the mid-1990s closely parallel federal spending trends in all but one outstanding case. R&D in the medical sciences exhibited even faster growth in nonfederal than in federal support (44.1 percent vs. 28.9 percent) and consumed the largest share—27.5 percent of all nonfederal support—by the end of that period. The biological and agricultural sciences also experienced relatively rapid growth—32.2 percent and 20.1 percent respectively—and constituted 15.8 and 13.0 percent of the total portfolio, respectively. Together, the life sciences represented 58 percent of R&D funding from sources other than the federal government in 1999. On the other hand, nonfederal support of chemistry R&D increased only 14.2 percent and represented a small share (2.6 percent) of nonfederal funding. Support of physics increased by 8.0 percent in real terms but represented only 2.4 percent of nonfederal funding. Support of computer science, in concert with federal spending trends, and electrical engineering, in contrast to federal trends, grew substantially—by 35.0 and 37.5 percent, respectively—but to levels representing small shares of nonfederal funding (2.4 and 3.2 percent, respectively).


The states’ role in research and development expanded in the 1980s and 1990s beyond their traditional role in agriculture and agricultural extension and support of higher education to include technology-based economic development. Most states established science and technology offices, many produced strategic plans, and a number launched new spending programs. State expenditures increased at a slightly faster rate than federal spending throughout the period 1965 to 1995.

The most recent, and in important respects unique, comprehensive survey of this activity is a one-time snap shot taken in 1995 when NSF/SRS commissioned a survey by the State Science and Technology Institute (SSTI) of the Battelle Memorial Institute in Ohio.3 SSTI found that states were spending approximately $2.46 billion of state revenues each year on research and development (compared with the federal government’s $70 billion). Not included in the survey were state higher education funds used at institutions’ discretion to support R&D activity or overhead on R&D. Nevertheless, over 80 percent of state funds earmarked for R&D went to universities. State agencies and their laboratories accounted for only 11 percent of expenditures, with the remaining 8 percent distributed to companies and nonprofit institutions.

As with nonfederal research activity in universities, the largest recipients of state support were the biological and medical sciences (nearly 40 percent of the total), followed by engineering and environmental science, with the remaining funds distributed among physical sciences, computer science and math, and social sciences as shown in Table 5–2.

Is there any reason to believe this allocation has changed in the past several years? One significant new element of the states’ fiscal posture is the substantial windfall that states will receive over several years as a result of the master agreement settling their liability litigation against the tobacco manufacturers. The disposition of these funds is entirely up to the affected state legislatures. In FY 2000 and 2001, 44 legislatures have appropriated $8.2 billion, with the bulk of this money in the form of general funds, endowments and trust funds being devoted to tobacco prevention, health care services, education, tobacco farmer support, and various other purposes. In just two years, however, 12 states have dedicated $207 million (8.5 percent of state research and development spending in 1995) to research, all in the biomedical sciences. A $1 billion Florida endowment will generate an estimated $35 million per year for peer-reviewed biomedical research. Michigan has created a $50 million biomedical research trust fund administered by the state’s public universities, and Colorado, Maryland, Illinois, and Kansas are planning other health research ventures.4

More diversified are a handful of recent state initiatives to establish centers of research excellence in particular fields. Although based at universities, the centers are required to establish industry alliances and raise matching funds. California has established three such centers in nanotechnology; information technology and telecommunications, and biotechnology/bioengineering/bioinformatics-funded by the state at $100 million each for four years. Georgia’s Research Alliance program will match private contributions with nearly $250 million in grants over 10 years for biotechnology, environmental, and telecommunciations research. Alabama, Illinois, and


State Science and Technology Institute, 1999. The Survey of State Research and Development Expenditures: FY 1995, Columbus, OH: Battelle. The results are summarized in John Jankowski. 1999. What Is the State Government Role in the R&D Enterprise? Arlington, VA: National Science Foundation.


National Conference of State Legislatures. August 1, 2000. State Allocation of Tobacco Settlement Funds, FY 2000 and FY 2001, Washington, D.C.

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