Oct 28, 2016
From a 2013 study of Business Research and Development (R&D) in the United States, five states alone made up half of the $265 billion in R&D private investment that takes place in the United States, according to the Business Research and Development and Innovation Survey (BRDIS). From the companies that paid for their own R&D, Michigan came in second behind only California, spending $14.4 billion in 2013. This amount also gave Michigan the second highest ratio of Business R&D spending to State GDP at 3.3%, double the national average. Looking at the comparison of Michigan and California, California is a larger state by about 66,000 square miles and includes large R&D industries that include pharmaceuticals, software publishers, semiconductors and other electronic components.
Business R&D in the U.S. is more geographically concentrated compared to GDP or population. These five states make up for $133 billion of the $255 billion total, or 52%. For GDP alone, these five states accounted for 40% (NSF.gov).
Michigan’s Largest R&D Segment
Of the $14.4 billion in private R&D investment that took place in Michigan, 74% took place automobiles, bodies, trailers and parts sector. Although Michigan strives to diversify its economy, the automotive sector still remains the state’s anchor industry, especially with the recent growth in autonomous vehicle investment.
Southeast Michigan
52% of the companies that paid for the R&D themselves reported that their entire R&D operation was facilitated at their largest location and 88% said that at least half of the R&D was performed at their largest location. 93 companies in the 9-county Detroit – Warren – Ann Arbor Combined Statistical Area housed their largest location there, contributing to the $9.4 billion spent in Metro Detroit in 2013. This means almost two-thirds of all “in-house” R&D spending in the state occurred in southeast Michigan. As the future of the automobile relies more on R&D intensive technologies, Michigan is sure to continue to remain at the forefront of R&D investment.
