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4 HARTFORDBUSINESS.COM | SEPTEMBER 22, 2025 What's Trending CT R&D spending tops national average, trails Mass. By Harriet Jones & Greg Bordonaro hjones@hartfordbusiness.com C onnecticut's research and development sector made up 2.8% of the state's gross domestic product in 2023, outpacing the national average but falling short of some neighboring states, according to newly released federal data. The U.S. Bureau of Economic Analysis said that R&D accounted for 2.5% of GDP nationwide. Massachu- setts led the region at 5.8%, while New Hampshire registered 3%. In Connecticut, R&D supported about 36,600 jobs in 2023, an increase of 21.2% from a year earlier. Roughly 16,500 of those positions were tied to manufacturing industries, such as aerospace and advanced materials, while 14,100 were based in non-man- ufacturing fields, including software, biosciences and healthcare research. Overall, R&D generated about $9.8 billion for the state economy, the agency said. To strengthen its competitiveness in innovation-heavy industries, state lawmakers this year enacted an expansion of the R&D tax credit specif- ically targeted at the biotech sector. The recently adopted two-year state budget includes a provision that lets biotech companies taxed as C corporations with less than $70 million in annual sales — and not yet profitable — exchange a greater share of their unused R&D tax credits for cash refunds from the state. The exchange rate is rising from 65% to 90% of the credit's value — a shift intended to free up cash flow for early-stage firms to reinvest in research and development. Industry leaders, particularly in bioscience and advanced manufac- turing, had long pushed for such a change, noting that states like Massa- chusetts and New York offered more attractive incentives. The Connecticut Business & Industry Association has also pushed lawmakers in recent years to expand access to the R&D tax credit to pass- through entities, but those efforts have thus far come up short. Economists argue that states with strong R&D activity are more likely to attract higher-value companies and long-term investment. RESEARCH AND DEVELOPMENT EMPLOYMENT IN CT 40K 35K 30K 25K 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: U.S. Bureau of Economic Analysis SHARE OF NEW ENGLAND STATES' GDP FROM R&D ACTIVITY STATE % OF R&D TO OVERALL GDP Massachusetts 5.8% New Hampshire 3% Connecticut 2.8% Vermont 1.5% Rhode Island 1.2% Maine 1% Source: U.S. Bureau of Economic Analysis