Economic Contributions of R&D Funding in Massachsuetts
July 2025
Massachusetts has built its economy on a foundation of learning, teaching, and innovation. In turn, this knowledge economy depends on federal research and development (R&D) funding to support earlystage or high-risk, high-reward research projects. From the Commonwealth’s colleges and universities to its hospitals and pharmaceutical firms, federal R&D funding underlies many of the inventions and innovations created in Massachusetts. The Commonwealth is regularly among the top three states for National Institutes of Health (NIH) and National Science Foundation (NSF) funding and typically the top recipient in the country in per capita terms. Moreover, Massachusetts is home to one in every 10 jobs in R&D in the US, compared to one in 40 for all jobs throughout the economy.
In the early months of 2025, the Trump Administration began a series of steps aimed at changing funding priorities and requirements for how dollars are spent by recipient organizations (e.g., capping the institutional overhead rate). While these potential policy changes are unresolved at the time of this publication, proposed and actual changes in federal funding and support for R&D create uncertainty over future economic outcomes in Massachusetts.
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