Back to The Future of Science and Technology in the States
August 1996
Washington, D.C.
The AAAS Board of Directors, in accordance with Association policy, has approved publication of this report as a contribution to the understanding of an important process. The interpretations and conclusions are those of the authors and do not purport to represent the views of the Board or the Council of the Association.
This project is funded by a grant from Carnegie Corporation of New York. The Corporation does not take responsibility for any statements or views expressed in this report.
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Tables and Charts
State Overviews
Appendices
After nearly 50 years of steadily increasing budgets, the U.S. research community is facing the prospect of significantly reduced federal funding. Efforts to balance the budget and reduce the size of the federal government have created great uncertainty about the future of federal funding for science and technology. Although science and technology funding fared relatively well in FY 1996, outyear projections by both the President and Congress indicate it will decrease significantly as discretionary spending falls over the next several years. At the same time, the congressional agenda is increasingly dominated by issues involving science and technology, and polls continue to show strong support for R&D among the American people.
In January 1996, the American Association for the Advancement of Science's Center for Science, Technology, and Congress undertook to produce a series of reports to provide information on the state and regional impacts of federal R&D spending and to organize a series of meetings associated with these reports. This report on science and technology in the Midwest was prepared for presentation at an August 21 meeting in Indianapolis, Indiana, sponsored by the Big Ten universities and the Center.
The goal of this project is to help the research community, both industrial and academic, state and federal lawmakers, and local opinion leaders better understand the effects of current trends in public and private sector R&D spending in key regions of the U.S. We also want to provide oft-requested information to Congress and the public about the role of science and technology, including federal, state, and industrial R&D, in the economies of various states.
In gathering information for The Future of Science and Technology in the Midwest: Trends and Indicators, we used the most recent data available from the National Science Foundation. Because of the complexity of collecting information on a state-by-state basis, especially with regard to industry spending, the most recent NSF data details obligations from fiscal year 1994 and expenditures during the 1993 calendar year. The numbers may change as data for more recent years become available. We have augmented the NSF data with additional research and with projections of future government spending based on outyear funding data from the President's budget request and the congressional budget resolution. The report provides a statistical portrait of the Midwest's R&D activity as a region and an overview of R&D in each midwestern state; examines the distribution of federal R&D funding in the states; discusses university-based research, federal laboratories and FFRDCs; and assesses the potential future impacts of trends in R&D spending.
We would like to thank Kei Koizumi for his efforts in assembling the data and for drafting this report, Steve Nelson for reviewing the report, and J.T. Forbes of Indiana University for helping to gather information from the universities.
| Albert H. Teich Director AAAS Science and Policy Programs |
Bonnie Bisol Cassidy Assistant Director AAAS Center for Science, Technology, and Congress |
The seven midwestern states--Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio, and Wisconsin--have experienced a strong economic resurgence in the 1990s after a long period of decline. Long associated with smokestack industries, the Midwest now boasts a highly diversified economy including many high-technology industries. Even the automobile industry, the leading industry in the region, relies heavily on cutting-edge technologies in the design and manufacture of its products.
Research and development is an integral part of the Midwest's regional economy. In 1993, the latest year for which comprehensive figures on industrial as well as federal R&D expenditures are available, $32 billion was spent on R&D in these seven states, accounting for about one-fifth the national effort (see Table 1). This is roughly proportional to the Midwest's one-fifth share of the U.S. population.
Private industrial firms dominate R&D in the Midwest. Of the $32 billion in R&D performed in the Midwest in 1993, $25 billion was funded by industry. The Midwest is home to a number of companies with strong R&D investments, such as GM, Ford, Chrysler, 3M, and Motorola, all of which have large R&D laboratories in the region. Over a quarter of the nation's industry-funded R&D, now approaching $100 million a year, is performed in the Midwest. Aspects of the region's industrial R&D are discussed in the individual state overviews following the tables and charts in this report.
The Midwest has traditionally relied on industrial R&D for the strength of its R&D enterprise, but the federal role is also vital. In FY 1994, the latest year for which statistics on federal government obligations are available, the federal government obligated $5.4 billion in funds for R&D to the Midwest. Of this amount, the largest share ($1.9 billion) went to the region's universities, followed by industrial firms ($1.5 billion), government labs ($1.0 billion), and three federally funded research and development centers (FFRDCs) in Illinois and Iowa ($665 million) (see Table 2).
Although the flow of federal R&D funds to the region is significant, it is less than what one might expect based on the region's population and economic strength. For the past few decades, federal R&D to the Midwest has remained fairly steady at about 8 percent of total federal R&D (see Chart 7). This is less than the Midwest's 19 percent share of the U.S. population and is far less than the Midwest's 25 percent share of industry-funded R&D. A recent report by the Northeast Midwest Institute, which tracks the flow of federal funds to the region, notes that although the seven states of the Midwest or Midwest account for 19.4 percent of the U.S. population, the region receives only 16.5 percent of total federal spending. The Institute calculates that for every federal tax dollar that the Midwest sends to the federal government, only 84 cents come back to the region, while nearly every state in the South and Great Plains regions receives more from the federal government than it pays in taxes.
Only in federal support for university R&D, in which Midwestern universities capture 16 percent of total federal support for university R&D, does the Midwest come close to winning a share of the national total proportional to its share of the U.S. population. Midwestern firms receive only 5 percent of total federal support for R&D, chiefly because the largest defense contractors, who receive over half of all federal support for industrial R&D, are located outside the region, in the South and the West. Similarly, government labs in the region receive only 7 percent of total federal support for government labs. The three Midwest FFRDCs (government-owned labs operated under contract by non-government institutions) account for 11 percent of total federal spending on FFRDCs.
Chart 6 shows that in real terms (after adjusting for inflation), federal R&D funding to the Midwest generally increased from the mid-1970s until FY 1990, paralleling growth in total federal R&D spending during that period. Since FY 1990, federal R&D funding has been in slow decline. A closer look at the chart shows that Ohio accounts for much of the fluctuation over the years. Ohio receives nearly half of its R&D funds from the Department of Defense, and is therefore sensitive to trends in defense spending, which has decreased steadily since the end of the Cold War. The other six states have held fairly steady and have even increased slightly over the past decade, mirroring trends in overall nondefense R&D spending by the federal government.
As Table 3 shows, Ohio receives the most federal R&D funds among the seven states, with a $1.9 billion inflow to the state economy in FY 1994, placing it 14th among the states, followed by Illinois (16th) with $1.3 billion. These two states, ranked 7th and 6th respectively in population, account for the majority of federal R&D funds to the Midwest. Iowa received the least of the seven states, $234 million in FY 1994.
Federal support for R&D is especially important to the region's network of large research universities, many of which were founded as land-grant institutions over a century ago. Together, the Midwest's universities received $1.9 billion in R&D funds from the federal government in FY 1994 (see Table 4), and received even more in federal funds when training grants, student aid, and other non-R&D funds are counted. Over half of the federal funds for university R&D came from the Department of Health and Human Services (HHS), home of the National Institutes of Health (NIH). NIH provides nearly half of federal funding for university research, and that is true for the Midwest as well. In FY 1994, HHS sponsored $1.1 billion in R&D in Midwestern universities, nearly three times the level of the next-largest sponsor, the National Science Foundation (NSF), with $361 million. Other important sponsors are the Department of Defense (DOD, $197 million), the National Aeronautics and Space Administration (NASA, $71 million), the Department of Energy (DOE, $93 million), and the U.S. Department of Agriculture (USDA, $87 million).
The strength of the region's universities at winning federal research grants can be seen in Table 4 and Chart 5. Both the University of Michigan and the University of Wisconsin-Madison rank among the top ten recipients of federal R&D funds, and the breadth of the region's excellence can be seen by the presence of 11 institutions, at least one from each of the seven states, among the top 50 recipients. Six universities in the region receive over $100 million annually from the federal government for R&D, with another seven receiving between $60 and $100 million.
Nationwide, the federal government funds over 60 percent of the R&D conducted at universities. Most of the larger Midwest universities receive at least 50 percent of their total R&D budgets from the federal government, dwarfing other sources such as institutional, state, and local government funds (see Table 5). Industrial contributions to university research have been growing in recent years, but they still account for less than 10 percent of total university R&D. Continued federal support for R&D is vital to the continued strength of research capabilities at these universities.
Table 5 shows the extent to which universities in the Midwest depend on federal R&D funds. The University of Michigan, the 5th largest university recipient of federal funds for R&D, depends on the federal government for over 60 percent of its research. NIH alone is responsible for over half the federal contribution, meaning that more than one-third of the university's R&D is funded by NIH. The trend is similar among the other major research universities in the region. Whether public or private, the federal government is the primary supporter of research at these universities and makes possible not only the bulk of the research done on campus but also faculty support, research training for graduates and undergraduates, and funding for graduate education.
State and local governments fund 10 to 20 percent of the R&D conducted at many of the major universities, and their indirect support for facilities, operating funds, and other costs associated with running the university is important. In an era when state education budgets are increasingly constrained by other state needs, it seems unlikely that this source will expand significantly. Similarly, institutional funds support a significant part of the research conducted on campuses, but public resistance to tuition increases, especially at the public universities, will make expanding this revenue source difficult. Finally, industry is unlikely to fill any gaps caused by declines in other funding sources because it starts from a such small base, less than 10 percent of total R&D funding. Despite significant increases over the past decade and a variety of innovative partnership strategies to better link university and industrial research, industrial funding of university R&D is likely to remain a relatively small part of the overall funding picture for universities.
Government laboratories received $1 billion in federal R&D funds in FY 1994, of which two-thirds went to labs in Ohio (Table 2). Over half of these funds came from the Department of Defense, which has labs in each of the seven states. DOD labs perform most of their work in the development and prototype evaluation of new weapons systems. The largest federal laboratory in the region is the NASA Lewis Research Center in Cleveland and Sandusky, Ohio, which received close to $300 million in R&D funds in FY 1994. Lewis employs over 5,000 people, about half of whom are scientists and engineers.
The Department of Agriculture has a large network of laboratories in the region, with at least one facility in each of the seven Midwest states. These labs, funded through the Agricultural Research Service (ARS) and the Forest Service, are often located on the campuses of the network of land-grant universities in the region, although they operate independently. The largest ARS lab in the region is the National Center for Agricultural Utilization Research in Peoria, Illinois. Its ten research units cover a diverse portfolio of agricultural research issues. Together with other ARS units in Urbana, the Illinois USDA labs received over $30 million in R&D funds in FY 1994. Other significant labs in the region are the ARS labs in Ames, Iowa, including the National Animal Disease Center and the National Soil Tilth Laboratory, with $25 million in FY 1994, and several research units in Madison, Wisconsin, receiving $25 million in FY 1994. The Forest Service maintains labs in Michigan, Minnesota, and Wisconsin to perform forestry research.
The Midwest is home to three federally funded research and development centers (FFRDCs), which received $665 million in FY 1994. FFRDCs are government-owned facilities which, unlike government labs, are operated and managed either by universities, industrial firms, or nonprofit organizations to conduct research for the federal government. There are a total of 39 FFRDCs in the United States. The largest in the Midwest is Argonne National Laboratory in Argonne, Illinois, which conducts R&D primarily for the Department of Energy. Operated by the University of Chicago, Argonne received $393 million for R&D in FY 1994, including funds for R&D facilities, and employs 4,500 people. Its research falls into four broad categories: materials science, energy and environmental science, engineering research, and physical research. Fermi National Accelerator Laboratory, in Batavia, Illinois, specializes in high-energy physics research. Because of its unique facilities, much of the field of high-energy physics conducts its experiments here. FermiLab is operated by a consortium of research universities.
The other FFRDC in the region is Ames Laboratory in Ames, Iowa, operated by Iowa State University of Science and Technology, which received $31 million from DOE in FY 1994 to perform energy-related research. It employs approximately 650 people.
Over time the Midwest's share of total federal support for R&D has been steady at about 8 percent, as shown on Chart 7. This means that the flow of R&D funds to the region has mirrored national trends in R&D funding. The Midwest's steady share of total R&D is a result of the diversity of the region's R&D institutions and federal funding sources, detailed earlier in this report, and this consistency suggests that the future of R&D in the Midwest will continue to track national trends.
As in the nation as a whole, federal support of R&D in the Midwest has helped to build a strong R&D enterprise. Federal support for R&D has been especially important for the region's universities, which are world-class centers of excellence that not only perform research at the frontiers of knowledge but also attract faculty and students from all over the world. Federal funds have also helped to sustain the region's privately funded R&D, through the support of graduate education of scientists and engineers at the region's universities who go on to staff industrial R&D labs and also through linkages between federal and private R&D, especially evident in the Midwest in the links between commercial agriculture and federally funded agricultural research.
The continued strength of the region's R&D institutions as we prepare to enter the 21st century, however, is in doubt because the national funding outlook for R&D is one of uncertainty mixed with pessimism. As Chart 6 shows, real federal support for R&D in the Midwest peaked in FY 1990 and has been headed downward ever since, the same as for the nation as a whole. Growth in federal support for R&D has failed to keep pace with inflation during the 1990s, especially on the defense side where defense R&D now stands at 70 percent of the peak Cold War spending level in FY 1987. Even federal support for nondefense R&D will fail to keep pace with inflation in the current fiscal year (1996).
Congress in 1995 passed a Concurrent Budget Resolution laying out its plans to eliminate the federal deficit in seven years. The resolution marked most nondefense discretionary programs for sharp cuts in FY 1996, followed by progressive reductions in subsequent years out to FY 2002. Although most R&D programs were not targeted for cuts greater than the norm, and NSF and NIH, two key basic research agencies, were given relatively favorable treatment, the net result was a projected cut of one-third in real (inflation-adjusted) spending for nondefense R&D over the seven-year period.
Fortunately, the details of the budget resolution are not binding on the Appropriations Committees (which are responsible for the actual spending legislation), and when the dust settled on the budget for FY 1996, the reductions in many R&D areas were smaller than had been called for in the resolution. Overall, nondefense R&D in FY 1996 was down about one percent relative to FY 1995-nothing for the R&D community to celebrate, but better than had been anticipated by many observers.
The FY 1996 budget battle, however, was only the beginning of what is likely to be a lengthy process. In their FY 1997 budget plans, both the President and Congress have projected spending patterns that would eliminate the deficit by FY 2002, primarily by reducing discretionary spending. Once again, R&D programs are at risk of serious reductions. Indeed, because (as agreed to in last January's "treaty" between the President and Congress) the two plans use the same Congressional Budget Office economic assumptions, they both reach approximately the same end-point. By FY 2002, nondefense R&D would be down about 19 percent under the President's plan and about 23 percent under the congressional plan. (The main reason these numbers look somewhat less draconian than the projections in last year's budget resolution is that expectations of future inflation have declined from an annual rate of about 3.0-3.5 percent last year to a rate of about 2.2 percent currently.)
A major difference between the President's plan and that of Congress is in FY 1997. The President proposes to increase some areas of discretionary spending, including most nondefense R&D, in FY 1997 before starting on the downward path toward FY 2002. Congress, under the FY 1997 Budget Resolution, would cut nondefense discretionary spending immediately, making the slope of the curve in subsequent years a bit less steep, but also making it more difficult to return to earlier spending levels, should political leaders wish to do so in future years.
Defense R&D figures prominently in support for industrial R&D in the Midwest; support for mathematics, computer science and engineering in midwestern universities; and for Ohio's many DOD laboratories. The President's latest budget plan for FY 1997 calls for the RDT&E account (which makes up 98 percent of DOD's R&D) to fall from $34.7 billion in FY 1997 (itself a drop from the $35.8 billion FY 1996 appropriation) to $31.7 billion in FY 2002. After factoring in expected inflation, this amounts to a more than 25 percent drop between FY 1996 and FY 2002. Barring unusual changes in the allocation of DOD's R&D, the Midwest can expect a proportional share of the cut if the President's plan is enacted.
The Midwest's strength in privately funded R&D may shelter the region's economy somewhat from federal R&D cutbacks, but the region's universities, dependent on the federal government for over half of their research funding, are likely to feel the full impact of any cuts. The region's federal labs and FFRDCs, of course, are dependent on federal funds for all of their research.
These projections are, of course, not cast in concrete. As noted above, when push came to shove last year, congressional appropriators provided more money for R&D programs than had been called for in the FY 1996 budget resolution. This could well happen again in future years. However, with both Congress and the President committed to balancing the budget by FY 2002 without raising taxes and without seriously tackling the growth of entitlement programs, substantial reductions in overall discretionary spending seem inescapable. R&D is part of the discretionary component of the federal budget. It has grown in tandem with increases in discretionary spending. It is likely to decline as the discretionary pie shrinks. The consequences for the future of the Midwest's R&D institutions, both government and private, and for the region's economy could be profound.
Illinois is home to several leading research universities as well as two federally funded research and development centers (FFRDCs) that perform cutting-edge basic research in physics. Illinois also has a strong industrial R&D sector: in 1993, total R&D in Illinois was $6.8 billion, of which $5.1 billion was funded by industry (see Table 1).
There are many high-tech firms in Illinois, including Motorola, headquartered in Schaumburg and employing 23,000 people in Illinois. Although its R&D operations are increasingly globalized, Motorola has a number of R&D laboratories in the state which focus on automotive and communications technologies. Caterpillar, the Ameritech Corporation, and AT&T also maintain R&D laboratories in the state.
Illinois boasts a number of leading research universities, with three receiving more than $100 million each in federal R&D obligations in FY 1994: the University of Illinois Urbana-Champaign, $121 million; the University of Chicago, $104 million; and Northwestern, $101 million (see Table 4). In addition, the University of Illinois at Chicago received $61 million. The University of Illinois system employs 24,000 people, according to the Illinois Department of Commerce, making it one of the largest employers in the state.
The University of Illinois at Urbana-Champaign is unusual among the major research universities in that it receives half its federal R&D support from the National Science Foundation, for a total of $60 million in FY 1994. NSF is the major sponsor, in collaboration with NASA, DOD's Defense Advanced Research Projects Agency (DARPA), the state government, and corporate partners, of the National Center for Supercomputing Applications (NCSA). NCSA is most famous for inventing Mosaic, the first widely available browser for the World Wide Web and the one credited with popularizing use of the Internet. One of NCSA's current projects is the Biology Workbench, which allows researchers in computational biology to use the World Wide Web as a common database and tool kit.
Northwestern receives most of its federal R&D support from NIH, for $58 million in FY 1994 out of a total $101 million. The university also received $21 million from NSF, part of which funds the NSF Center for Science and Technology of Advanced Cement-Based Materials (ACBM), dedicated to interdisciplinary research and graduate education in cement-based materials.
Illinois is home to two DOE-funded federally funded research and development centers (FFRDCs), the Argonne National Laboratory in Argonne and the Fermi National Accelerator Laboratory in Batavia. DOE spends 10 percent of its total R&D portfolio in Illinois and is the largest federal sponsor of R&D in the state, with a total of $665 million in FY 1994, $627 million of which went to the two labs (see Illinois table, opposite).
FFRDCs are hybrid organizations that are owned by the federal government and perform R&D for the federal government but are operated under contract by outside organizations. Argonne is managed by the University of Chicago, and FermiLab is managed by the Universities Research Association. The labs play a strong role in DOE's basic research portfolio and perform R&D that serves all three of DOE's major research missions in national security, energy, and fundamental science (especially physics). The labs are also important for their large-scale scientific user facilities, such as the Advanced Photon Source (APS) at Argonne and the Tevatron accelerator at FermiLab. The APS produces intense X-ray beams that could aid in the development of improved semiconductors, while the Tevatron is one of the leading facilities in the nation for high-energy physics.
The U.S. Department of Agriculture maintains a number of laboratories in the state, including the National Center for Agricultural Utilization Research in Peoria, which develops new uses for agricultural commodities, develops new environmental technology for agriculture, and transfers agricultural research results to users. In FY 1994, USDA obligated a total of $36 million in R&D funds to this lab, other research units in Urbana, and two Forest Service labs. DOD spent $48 million on R&D in its labs in FY 1994, including the U.S. Army Construction Engineering Laboratories which conduct research aimed at improving the safety, environmental impacts, and operational efficiency of the Army's infrastructure.
Table: Federal R&D by Agency & Performer
Indiana's strength in R&D lies in its ties to the automobile industry, particularly General Motors (GM). Total R&D performed in Indiana in 1993 was $2.6 billion, $2.2 billion of which was performed by industry (see Table 1). Of that amount, $2.1 billion came out of company funds. The two largest private employers in the state, according to the Indianapolis Business Journal , are Delco Electronics (a subsidiary of General Motors) and GM, both with over 20,000 employees. These two companies have three major R&D facilities in the state employing approximately 1500 scientific and technical personnel engaged in development of automotive technologies. Inland Steel Co., the third largest private employer in the state, and General Electric also have R&D an presence in the state.
On the federal side, Indiana ranks 26th among the states in total federal R&D funds received in FY 1994, for a total of $408 million. Of this amount, over half ($222 million) came from DOD, which was distributed mostly to industrial firms and DOD labs in the state (see Indiana table on p.33).
The federal government supplied $180 million in R&D funds to Indiana universities in FY 1994, $84 million of which came from the Department of Health and Human Services (HHS). Indiana University received $86 million, of which $60 million came from HHS and $19 million from NSF. NSF supports the Indiana University Cyclotron Facility, which enables researchers to work with subatomic particles. The facility also receives funds from DOE. Purdue University received $78 million in FY 1994, of which HHS and NSF each contributed $21 million. NSF funds an Engineering Research Center for Collaborative Manufacturing and a Materials Research Science and Engineering Center.
Department of Defense (DOD) labs receive the largest share of federal funding for government labs in Indiana, $88 million out of a total $96 million in FY 1994. Most of the labs are engaged in the development of new weapons prototypes, but DOD labs also conduct research on the properties of high-temperature materials and metals. The Agricultural Research Service of the U.S. Department of Agriculture operates the National Soil Erosion Research Laboratory (NSERL) in West Lafayette. Receiving $4 million in FY 1994 for R&D and employing about 20 people, the NSERL is described by the Agricultural Research Service as "the focal point for the U.S. Government's national research program in soil erosion by water."
Table: Federal R&D by Agency & Performer
Federal support for R&D in Iowa addresses a number of national missions and supports a variety of R&D-performing institutions. Although most of the federal government's spending of $234 million for R&D in Iowa in FY 1994 went to the state's universities, federal support also sustains several USDA agricultural research laboratories and a federally funded research and development center (FFRDC) that performs research for DOE.
The University of Iowa in Iowa City received $95 million in R&D obligations in FY 1994 from federal sources, $77 million of which came from the National Institutes of Health (NIH) and the Food and Drug Administration (FDA) within the Department of Health and Human Services (HHS) (see Table 4). The university relies on the federal government to fund over 60 percent of its research. NIH support helps to fund research on cystic fibrosis gene therapy and enables the university to be a principal site for the Human Genome Project. FDA support helps to maintain university capabilities in pharmaceutical development and clinical trials.
Iowa State University in Ames received about $46 million in FY 1994 from federal sources for its R&D (see Table 4). Iowa State relies on the federal government for only 36 percent of its research funding, an unusually low number for a large university, because it draws heavily on state, local, and institutional funds to finance its research. About a third of its federal funding comes from the Department of Agriculture, and the next largest source is the Department of Energy because of the proximity of Ames Laboratory. (Note: the NSF data used in this report contain inconsistencies. Table 4 shows that the two universities above received $141 million in obligations, while the Iowa table on the opposite page shows all Iowa universities receiving $135 million in FY 1994, 99 percent of which went to the two universities above. These two figures come from separate, independently conducted NSF surveys.)
Ames Laboratory, located on the Iowa State campus, is an FFRDC operated by Iowa State that performs R&D for DOE. The laboratory employs approximately 650 people, including 300 scientists and engineers, and received $30 million in R&D funds in FY 1994. Originally established in the 1940s to develop uranium for nuclear weapons, the laboratory now conducts a varied portfolio of R&D activities centered around energy research, including environmental restoration, materials research, and industrial technology, and collaborates with local industry through many cooperative research and development agreements (CRADAs).
The U.S. Department of Agriculture (USDA) maintains a number of laboratories in Ames, which together received $32 million for R&D in FY 1994 from USDA's Agricultural Research Service. The National Animal Disease Center, with 270 employees, is the major USDA center for research on livestock and poultry diseases that occur in the United States. The center also works closely with another USDA lab, the National Veterinary Services Laboratories, to combat animal pathogens.
Table: Federal R&D by Agency & Performer
Michigan is a national leader in the performance of R&D. In 1993, nearly $10.8 billion of R&D was performed in Michigan, third in the nation behind only California and New York. Over 92 percent of Michigan's R&D was performed by industrial firms, nearly all of that with industry's own funds (see Table 1). In industrial R&D, Michigan ranks second in the nation behind only California.
The automobile industry has long been the core of Michigan's R&D enterprise. The Big Three automakers are headquartered near Detroit, and although in recent years they have diversified their operations, the bulk of their R&D activities are performed within the state. General Motors, Ford, and Chrysler, are, in that order, the top three employers in the state. General Motors alone has over a dozen major R&D labs in the state, including several in Warren, engaged in development of a wide range of automotive technologies. The GM Engineering Center in Warren is the largest of these, and employs 1,640 people.
Michigan's companies are self-reliant in their R&D, receiving only $150 million in federal R&D funds in 1993, most of that for DOD weapons development contracts, compared to $9.8 billion of R&D with their own funds. The Big Three automakers are currently engaged with DOE and other agencies in the Partnership for the Next Generation of Vehicles program, which aims to produce a car three times as fuel-efficient as current models through the development of new technologies in combustion, materials, and production.
Although Michigan's R&D enterprise is overwhelmingly company-based, the University of Michigan is one of the top research universities in the country and received $242 million of federal R&D funds in FY 1994, ranking it fifth in federal R&D funding, behind Johns Hopkins, University of Washington, the Massachusetts Institute of Technology, and Stanford (see Table 4). Over the past decade, its share of federal R&D has grown substantially, and the university now receives twice as much in R&D funding as it did a decade ago. The University of Michigan Medical Center is especially competitive in securing research grants, and helped the university secure $158 million in funds for biomedical research from NIH in FY 1994.
Michigan State is also a strong research university, receiving $69 million from the federal government for R&D in FY 1994, placing it in 51st place among U.S. universities. NIH and NSF each account for about a third of this funding, with other agencies, led by USDA, accounting for the remaining third.
Federal laboratories in Michigan, which received approximately $100 million for R&D in FY 1994, are dominated by the Department of Defense, which accounts for over three-quarters of the total. DOD laboratories in the state mostly perform development work on new weapons systems. USDA maintains agricultural and forestry research units in East Lansing. The Environmental Protection Agency funds the National Vehicle and Fuel Emissions Laboratory in Ann Arbor, which is the primary lab for EPA's research on controlling air pollution from motor vehicles.
Table: Federal R&D by Agency & Performer
Minnesota ranks 24th among the states in federal support for R&D with $477 million in obligations for fiscal year 1994, but is a strong performer of private R&D. Of the $2.9 billion total spent on R&D in the state in 1993, almost $2.5 billion was performed by industrial firms, nearly all with firms' own funds. Industry supports 72 percent of Minnesota's total R&D, compared to 58 percent for the nation as a whole (see Table 1).
The 3M Company, headquartered in St. Paul, is a key performer of R&D in the state. 3M maintains labs in St. Paul employing nearly 9000 people, including almost 2000 doctoral scientists and engineers. 3M is Minnesota's largest private employer. Many of 3M's products are developed and tested in Minnesota, and 3M conducts basic and applied research in a variety of fields related to ceramics, electronics, magnetic recording, and information processing.
The University of Minnesota, which employs over 34,000 people, is the 16th largest university recipient of federal R&D funds, with a total of $182 million in obligations for FY 1994. The university depends on the federal government to finance 57 percent of its total research, according to NSF statistics (see Table 5). No other single source funds more than 15 percent of the university's total research. The university reports that for the past decade, federal support for R&D has been increasing by an average of 9 percent a year, slightly less than the growth rate in total federal support for university research. It recently released an annual report on research, warning of increased competition for research funds if federal support of university R&D declines as projected in the next several years.
The National Institutes of Health (NIH) is by far the largest sponsor of R&D at the University of Minnesota. In FY 1994, the Department of Health and Human Services obligated $123 million in R&D funds to the university, nearly all of which came from NIH. Although NIH's share of Minnesota's federal R&D portfolio has been declining over time, it still accounts for a majority of federal funds. The next largest sponsor, NSF, trailed far behind in FY 1994 with a total of $27 million for R&D. Other agencies such as the Department of Agriculture and the Department of Defense (DOD) annually provide less than $10 million each for R&D (see Table 4).
Private industry obtains significant funding for R&D from DOD, totaling $167 million in FY 1994. DOD is the second-largest federal sponsor of R&D in Minnesota, after NIH, but unlike NIH, the Defense Department obligates nearly all of its funds to private firms. While some of these funds go toward research, most of these funds are obligated for the development, testing, and evaluation of weapons systems prototypes.
The Department of the Interior's National Biological Service (NBS) operates two federal labs on the University of Minnesota campus in St. Paul. These two labs, the Minnesota Cooperative Fish and Wildlife Research Unit and the University of Minnesota Cooperative Park Studies Unit, together received $16 million for R&D from Interior in FY 1994. Because they are located on the campus, these labs provide opportunities for education and training as well as research that is of use to Interior activities. These labs' current projects include interdisciplinary research on fish and wildlife resource management and studying global change in the national parks of the Western Great Lakes region. Although the NBS will be merged into the U.S. Geological Survey (USGS) in October, 1996, USGS is expected to continue supporting their work.
The U.S. Department of Agriculture obligated $15 million for R&D in its labs in FY 1994, including the North Central Soil Conservation Research Laboratory (NCSCRL) in Morris. NCSCRL conducts research on agricultural problems in the transitional subhumid zone of the U.S., encompassing most of Minnesota, the Dakotas, and Iowa.
Table: Federal R&D by Agency & Performer
Ohio is the largest recipient of federal R&D funds in the Midwest, ranking 14th among the 50 states and the District of Columbia. The federal government obligated $1.9 billion in R&D funds to the state in FY 1994, about half of which came from the Department of Defense (DOD). Because of Ohio's heavy reliance on DOD, the flow of R&D funds to the state has declined in recent years as DOD reduced its R&D spending after the end of the Cold War. Federal R&D to Ohio grew steadily in real terms until FY 1990, and has fallen off since then.
Like the other Midwest states, Ohio's R&D enterprise relies heavily on private industry funding of R&D geared to the development of commercial products. In calendar year 1993, $6.4 billion worth of R&D was performed in the state, placing Ohio 10th in total R&D performance (Ohio ranks seventh in population). Of that amount, $5.1 billion or over 80 percent was performed by industry and $4.2 billion was funded by industry (65 percent) (see Table 1).
Two Ohio universities rank among the top 50 university recipients of federal R&D funds. Case Western Reserve, near Cleveland, received $99 million in federal R&D obligations in FY 1994, nearly all of which came from the National Institutes of Health (NIH). Case Western is unusually dependent on federal grants to support its research. In FY 1994, 73 percent of its total R&D was supported by the federal government.
The Ohio State University is the largest university performer of R&D in the state, reporting $231 million in R&D expenditures in FY 1994, of which about half came from the federal government. NIH provides roughly half of total federal support for R&D to Ohio State, and funds a wide range of medical research at the Ohio State Medical Center, including heart failure research and pain therapy research. NSF is the second largest source, with $16 million in obligations in FY 1994. The Department of Agriculture obligated $8 million for the university's agricultural experiment stations, which date back to the 19th century.
DOD is the major sponsor of R&D in Ohio, with a total of $894 million in R&D funding in FY 1994. Although most of these funds ($497 million) went to private defense contractors, $328 million in R&D obligations in FY 1994 went to DOD laboratories in the state, including several at Wright-Patterson Air Force Base near Dayton that develop and test technologies for aircraft fighter and missile guidance systems (see Ohio table, opposite).
The National Aeronautics and Space Administration (NASA) is the second largest federal supporter of R&D in Ohio, with a total of $556 million in FY 1994. NASA operates the Lewis Research Center near Cleveland and Sandusky, and employs over 5,000 people, about half of whom are scientists and engineers. In FY 1994, NASA obligated nearly $285 million for R&D at this federal lab. Including its non-R&D activities, NASA estimates that in FY 1996 Lewis will have a budget of about $800 million. Its activities are focused on developing new technologies for propulsion, power, and communications for applications in space and aeronautics. Through Lewis and also through its headquarters, NASA awards a number of R&D contracts to private industry in the state. In FY 1994, these contracts included $241 million in R&D funds.
The Environmental Protection Agency (EPA) also has a strong R&D presence in Ohio. One of the agency's major labs, the National Risk Management Research Laboratory (NRMRL), is located in Cincinnati. Its research focuses on environmental risk management and the scientific understanding and the development and application of technology to prevent, control, or remediate important environmental problems. EPA obligated $24 million for NRMRL's R&D activities in FY 1994, and also parceled out $19 million in related university R&D grants and $7 million in grants to other sources, for a total of $50 million in FY 1994, amounting to 9 percent of EPA's total R&D obligations.
Table: Federal R&D by Agency & Performer
The University of Wisconsin at Madison dominates federal funding for R&D in the state of Wisconsin, receiving $211 million of a total $359 million in federal R&D funds to the state in FY 1994. The university ranked eighth in R&D funding in FY 1994 (see Table 4). The federal government finances nearly 60 percent of the university's research.
Federal support at the university helps to sustain research in a wide variety of fields. The university is a world leader in organ transplantation and transplant technology, and has two pioneering cancer centers: the McArdle Laboratory for Cancer Research and the University of Wisconsin Comprehensive Cancer Center. HHS funded $110 million of R&D in FY 1994. NSF funding, totaling $36 million in FY 1994, sustains the Engineering Research Center for Plasma-Aided Manufacturing, and NASA funds the Center for Commercial Development of Space.
The Department of Agriculture funds a number of research units in Madison. These federal labs conduct research on cereal crops, plant disease, dairy products, and vegetable crops. USDA's Forest Service maintains two laboratories in Madison and Rhinelander that conduct forestry management research. USDA's Wisconsin labs received $29 million in FY 1994 (see Wisconsin table on p.53).
The Department of the Interior's National Biological Service (NBS) operates a number of laboratories that perform research on fisheries and water resources, biological resources in Lake Superior, and the Upper Mississippi River ecosystem. Most of these are relatively small, with less than 10 employees each; together, they received $14 million for R&D in FY 1994. Finally, the Department of Commerce's National Oceanic and Atmospheric Administration (NOAA) maintains two research units in Madison that conduct development work for NOAA's National Environmental Satellite, Data, and Information Service (NESDIS).
Table: Federal R&D by Agency & Performer
Unless otherwise indicated, all dollar figures in this report refer to research and development (R&D), which includes both the conduct of R&D and support for R&D facilities. Some figures refer only to conduct of R&D and are noted as such.
This report uses the National Science Foundation's definitions for R&D. These definitions, which are used by NSF and the Office of Management and Budget in the collection of federal government statistics for R&D, are reproduced below.
R&D refers to research--both basic and applied--and development activities in the sciences and engineering as well as R&D plant.
Research is systematic study directed toward fuller scientific understanding of the subject studied. Research is classified as either basic or applied according to the objective of the sponsoring agency.
In basic research the objective of the sponsoring agency is to gain fuller knowledge or understanding of the fundamental aspects of phenomena and of observable facts without specific applications toward processes or products in mind.
In applied research the objective of the sponsoring agency is to gain knowledge or understanding necessary for determining means by which a recognized and specific need may be met.
Development is the systematic use of the knowledge or understanding gained from research directed toward the production of useful materials, devices, systems or methods, including design, development, and improvement of prototypes and new processes. It excludes quality control, routine product testing and evaluation.
Funds for conducting R&D include those for personnel, program supervision, and administrative support directly associated with R&D activities. Expendable or movable equipment needed to conduct R&D, e.g., a microscope or a spectrometer, is also included.
The definitions discussed above constitute "conduct of R&D." R&D plant, or R&D facilities support, include funds for non-movable R&D facilities such as reactors, wind tunnels, or particle accelerators, or for the construction, repair, or alteration of such facilities. (A facility is interpreted broadly to be any physical resource important to the conduct of R&D.)
Figures may vary between tables. Some tables are based on calendar years while others are based on fiscal years; some cover only conduct of R&D while others cover R&D facilities support as well. Data are collected using a variety of surveys which yield data that are not always perfectly consistent. Some data are collecting by surveying the sources of R&D funds (such as federal agencies) while others data are based on a survey of recipients. Please refer to the original source for complete information on how the data are collected.
(Definitions adapted from National Science Foundation, Federal R&D Funding by Budget Function Fiscal Years 1994-96, NSF 95-342, 1995, and other NSF publications)
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