by David Sutherland

In my last article I discussed how Georgia demonstrates the elements of an innovation ecosystem, or the “Geography of Genius.” 

But to generate economic impact through innovation takes more than cultural capability and community – it takes an infrastructure for research and development that includes idea sourcing, future directed policies and incentives to stimulate investment in new ideas. 

The state of Georgia has increasingly prioritized policies that encourage corporate investment in research and development, or R&D. It’s recognizing infrastructure requirements needed to create innovative economic impact. 

One of the primary mechanisms used by the state is the Georgia Research and Development Tax Credit, which provides a financial incentive to companies that increase their qualified research spending within the state. The credit generally equals 10% of research expenses that exceed a calculated base amount and can offset up to 50% of a company’s Georgia income tax liability, with unused credits carried forward for up to ten years. 

This policy is designed to lower the cost of innovation and encourage businesses in sectors such as manufacturing, technology, telecommunications, and life sciences to expand R&D activity within Georgia.

Corporate R&D investment in Georgia is also closely tied to one of the state’s key sources of new ideas: its research university ecosystem. 

Georgia’s universities collectively generate more than $2 billion annually in public and private research funding, much of it through partnerships with private industry. Organizations such as the Georgia Research Alliance facilitate collaboration between corporations and universities, leveraging state support to attract additional federal and private investment.

In fact, the alliance has historically turned hundreds of millions in state funding into billions of dollars in outside research investment, helping build innovation clusters in areas such as biotechnology, advanced manufacturing and logistics.

Industry participation in research has also been growing through direct corporate partnerships with universities and research institutes. For example, corporations increasingly fund projects at institutions like Georgia Tech, where industry now contributes a significant share of research funding through long-term collaborations and applied research initiatives. These partnerships allow companies to access university expertise while helping Georgia develop a stronger innovation economy and attract high-tech investment. 

As a result, the state has positioned itself as a competitive location for corporate R&D activity in the southeastern United States, supported by tax incentives, research infrastructure, and industry-academic collaboration. 

This also shows up in corporate R&D spending in Georgia. The most recent comprehensive data on corporate (business enterprise) R&D spending in Georgia comes from the National Science Foundation’s Business Enterprise Research and Development (BERD) survey, which measures research performed by private companies. While final 2025 state-level figures have not yet been fully published, the latest available estimates suggest that corporate R&D spending in Georgia is roughly in the range of $9-10 billion annually in the mid-2020s, based on NSF data trends and extrapolations from recent BERD reports. 

These figures include R&D conducted by for-profit companies across industries such as information technology, aerospace, pharmaceuticals, logistics, and advanced manufacturing.

More broadly, when all research sectors are combined — including business, universities, nonprofits, and federal research centers — Georgia’s overall research activity has been growing rapidly. 

For example, university research expenditures in the state alone surpassed $4 billion for the first time in 2025, led by institutions such as Georgia Tech, Emory University, the University of Georgia, and Augusta University. Corporate R&D spending constitutes the largest share of this ecosystem nationwide, meaning that the private sector likely accounts for the majority of Georgia’s total R&D investment.

Within the state, large corporations and industry partnerships drive much of this spending. Major firms with significant research operations in Georgia — like aerospace, logistics, energy, biotechnology, and software — often collaborate with universities and research institutes like the Georgia Tech Research Institute, which itself managed nearly $1 billion in research activity in FY 2025 for government and industry clients. As a result, Georgia has become one of the leading R&D hubs in the southeastern United States, ranking third in total R&D spend, with corporate research investment forming the central pillar of the state’s innovation economy.

In my next article I will narrow in on the key corporate sectors investing in R&D in Georgia and highlight how they are leveraging corporate innovation centers to drive higher levels of innovation. I will share some of the financial results these centers have achieved and will show how spending on R&D does not always lead to positive economic results.