R&D Activity In Illinois Stagnant Since 2011

A report by the Illinois Science & Technology Coalition has stated that R&D spending in Illinois is five time slower than the national growth rate. This has been particularly evident in the machinery manufacturing and chemical industries, which are leading industries for the state.

Since the Global Financial Crisis, Illinois has found it hard to keep up with the growth of other states due to the state’s budget impasse. Smaller public universities have had to cut back on R&D activities. Computer and electronic R&D has also decreased by 1.9 percent per annum, while national annual growth has reached 4.4 percent.

While the state ranks 8th nationally, spending $16.5 billion in 2015, R&D activity has stagnated between 2011 and 2015, increasing by only 0.8 percent. R&D intensity average is behind the national average, with Illinois ranking 22nd at 2.1 percent GDP spend on R&D, as opposed to 2.7 percent nationally. Federal spend on R&D is also much lower than other states. Furthermore, business R&D activity grew at only 1.4 percent per annum, in comparison with the nationwide rate of 4.9 percent.

Nevertheless, between 2012 and 2016, large universities spent up to 8.6 percent on business-funded R&D per year. This is 34% higher than the national average of 6.4 percent. Medical sciences, chemistry and computer science were strong areas for research.  Finance and transportation equipment R&D have also grown strongly in recent years.

Why does this matter? R&D is essential to innovation, which in turn creates jobs and increases people’s quality of life through enhancements in technology. R&D helps companies to maintain their competitiveness, particularly in a global economy. Moving forward, the Illinois Science & Technology Coalition has recommended stable state funding for public universities as well as the creation of research and business collaboration opportunities. More support for early-stage R&D focussed businesses and larger wet labs would also encourage R&D activity.

The report also recommended making the Illinois R&D tax credit permanent. Over the past 15 years, the credit has lapsed four times. This creates uncertainty for businesses as they are unsure whether they will be able to benefit from this tax offset when planning their long-term R&D activities.

Implementation of the report’s suggestions would promote significant research growth, establish partnerships between industry and universities and allow Illinois’ economy to  flourish.

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