Connecticut among states with the highest research and development spending » CBIA

Connecticut ranks among the 10 states with the highest spending on research and development, according to a new report from the U.S. Bureau of Economic Analysis.

The report – BEA’s first analysis of research and development spending – found that Connecticut spent 2.7% of its GDP on research and development activities in 2021.

This represents over $7.9 billion in spending, an increase of 22% from the previous year and 44% from 2017.

Massachusetts leads the New England region with 4.9% – the third highest in the nation – followed by New Hampshire (3.5%), Connecticut, Rhode Island (1.8%), Vermont (1.5%) and Maine (0.7%).

Research and development activity accounted for 2.3% of the U.S. economy in 2021, ranging from 0.3% in Louisiana and Wyoming to 6.3% in New Mexico.

Key sectors

The BEA report described U.S. research and development activity as “highly concentrated,” with 10 states accounting for 70% of all spending.

California accounts for almost one-third of U.S. research and development activity, with significant contributions from Washington, Massachusetts, Texas and New York.

Eighty-five percent of U.S. R&D value added is generated by businesses, of which 40% is in the professional, scientific and technical services sector.

The information sector accounts for 15%, followed by chemical manufacturing (12%) and computer and electronic product manufacturing (11%).

In Connecticut, businesses accounted for 92% of R&D value added, with universities and colleges accounting for 5% and 3% for state and local governments.

The state’s manufacturing sector accounted for $3.67 billion in activity in 2021 (46%), and professional, scientific and technical services accounted for $3.3 billion (42%).

Job offers

Research and development employment in Connecticut increased 24% in 2021 to 39,800, representing 2.4% of all nonfarm jobs in the state that year.

Businesses provided 32,600 of those jobs (82%), up 30% from the previous year as the overall labor market rebounded from pandemic-related job losses.

The manufacturing sector employed 17,800 people, representing 45% of all employment in the research and development sector, and the number of jobs in this sector increased by 55% year on year.

Research and development employment in Connecticut increased 24% in 2021 to 39,800.

In colleges and universities, 3,700 people (9%) were employed in R&D activities, and 2,800 jobs (7%) were employed in state and local government administration.

CBIA President and CEO Chris DiPentima said research and development activities are critical to driving innovation in high-growth industries, particularly in the aerospace and life sciences sectors.

“Legislators must continue to implement policies that support and promote investment in research and development across all sectors,” he said.

DiPentima cited this session’s successful legislation allowing net operating loss carryforwards for up to 30 years as an example of a policy “attracting investment and increasing Connecticut’s competitiveness.”