"Investing in Innovation" provides a snapshot of trends in the states and identifies a wide range of strategies now employed. California's big investments, such as $3 billion for stem cell research, have already grabbed national headlines. But states like Arizona, Indiana and North Dakota, which haven't historically been big research and development (R&D) spenders, are also investing public dollars. This analysis provides a first look into which states are taking action and why, what they are funding, and how. Moreover, this report provides clear guidance on how to design R&D investments that work. (Methodology description is appended. Contains 42 endnotes in a second appendix.) [This report is co-published by the National Governors Association (NGA) Center for Best Practices and the Pew Center on the States, an initiative of The Pew Charitable Trusts. It is one of a series of publications being produced under the 2006-2007 NGA Chair's Initiative, "Innovation America."]