U.S. Universities Spending More on Research and Development

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U.S. universities are spending more and more on R&D these days. In 2015 alone, colleges and universities spent a combined $68.8 billion on research and development with the top 20 colleges accounting for 30% of that.

To discover the universities spending the most in research and development, 24/7 Wall St. assessed R&D expenditure by university for the 2015 fiscal year with data from the National Science Foundation. Of the 1,871 major colleges and universities reviewed, 10 schools spent more than $1 billion on R&D.

Top 10 Universities for R&D Expenditure

  1. Johns Hopkins University in Baltimore, Maryland
    • Annual R&D spend: $2.31 billion
  2. University of Michigan
    • Annual R&D spend: $1.37 billion
  3. University of Washington
    • Annual R&D spend: $1.18 billion
  4. University of California, San Francisco
    • Annual R&D spend: $1.13 billion
  5. University of California, San Diego
    • Annual R&D spend: $1.10 billion
  6. University of Wisconsin – Madison
    • Annual R&D spend: $1.07 billion
  7. Duke University in Raleigh, North Carolina
    • Annual R&D spend: $1.04 billion
  8. Stanford University in Stanford, California
    • Annual R&D spend: $1.02 billion
  9. University of California, Los Angeles
    • Annual R&D spend: $1.02 billion
  10. Harvard University in Cambridge, Massachusetts
    • Annual R&D spend: $1.01 billion

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If your company is conducting R&D through a local university or college, you may be eligible for a higher R&D tax credit rate. Contact a Swanson Reed specialist to find out more information.

How Does Your State Rank on the Innovation Scale?

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Innovation Is Key

Innovation is crucial to sustainable economic growth, but for innovation to occur businesses must have both the incentive and the capacity to invest.

As innovation is key to the United States’ economy as a whole, many U.S. states are showing off while others are falling short when it comes to patents, R&D, venture capital and academics.

So which states are excelling in innovation and which ones are lacking, you ask?

Patents

The top states in patents per population include:

  1. Wisconsin
  2. Washington
  3. Texas
  4. Utah
  5. California
  6. Massachusetts

The bottom five patented states include:

  1. Alaska
  2. Mississippi
  3. Tennessee
  4. West Virginia
  5. Wyoming

Venture Capital

The top states for venture capital are:

  1. Massachusetts
  2. California
  3. Utah
  4. Washington
  5. Colorado

The lowest are:

  1. Arkansas
  2. Alaska
  3. Hawaii
  4. Wyoming
  5. Iowa
  6. South Dakota

R&D Spending

The leaders in R&D spending are:

  1. Delaware
  2. Michigan
  3. California
  4. Connecticut
  5. Massachusetts

The states that spent the least on R&D include:

  1. Arkansas
  2. Wyoming
  3. Louisiana
  4. Alaska
  5. Mississippi

Academics

As for academics, the top states include:

  1. New Mexico
  2. Maryland
  3. Rhode Island
  4. Massachusetts
  5. Alabama

The lowest academic rankings were for:

  1. Louisiana
  2. Arkansas
  3. Delaware
  4. Wyoming
  5. Nevada

If you are a U.S. based company conducting R&D you may be eligible for the federal and/or state research tax credit. Please contact a Swanson Reed representative to find out further information.

Silicon Valley Company Opens Seattle Office

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Snowflake Computing recently announced the opening of an engineering office in Bellevue, Seattle, expanding away from its Silicon Valley headquarters.

Run by former Microsoft executive Bob Muglia, Snowflake is a cloud-based data analytics platform that uses SQL to organize and analyze business data. The platform was ranked the number one cloud data warehouse by Gigaom Research, receiving an impressive score of 4.85 out of 5.

Snowflake plans to hire up to 15 engineers at its new Seattle office in 2017 and expects to eventually expand to around 100. Nationally, Seattle has become a central hub for cloud technology, with companies like Microsoft and Amazon placing headquarters there.

Snowflake illustrates how thinking long-term and investing in R&D is critical in the fast-moving tech sector. In 2015, the company raised $45 million in funding for R&D and business development. Muglia stated that data warehousing was, “Ripe for disruptive innovation, driven by the shift to cloud computing and the explosion of customer interest in data insights.” Snowflake’s vision was to, “Reimagine the data warehouse for the cloud era with a completely new product built from the cloud up that doesn’t require retooling and retraining.”

Companies like Snowflake are putting pressure on even the largest companies. They outperformed Google’s BigQuery and Microsoft’s Azure SQL for the title of Best Cloud Data Warehouse. They also price matched Amazon’s S3 cloud storage service, stating that price was a key consideration for technology officers. “All organizations are keen to harness the insights derived from more and more data… It all comes down to technology and the cost of storing that data.”

Today, many billions of dollars are being invested in R&D by technology companies in order to stay relevant. Alphabet Inc, Intel and Microsoft spent over $12 billion each on R&D in 2016 for projects like Waymo, Alphabet’s self-driving car technology. Just a decade ago, the list of highest R&D spending was dominated by automotive and healthcare companies.

Corporate spending on R&D in the US is at its highest ever. A study by Bloomberg found that large companies that spent more on R&D got the largest returns with faster market capitalization growth. It also discovered that older companies that invested in continuous innovation performed better over the long-term.

Want to benefit from the federal R&D tax credit? Contact Swanson Reed R&D Tax Specialists today for an eligibility assessment.