Companies that Perform R&D are More Innovative, Says NSF

Companies that engage in R&D activities — either through performing R&D or funding others to perform R&D — are far more likely to innovate than companies that do not, according to new data from the National Science Foundation's (NSF) 2008 Business R&D and Innovation Survey (BRDIS). NSF researchers found that companies with R&D "exhibit far higher rates of innovation than do non-R&D companies. However, only 47,000 (3%) U.S. companies engaged in R&D activities from 2006 to 2008. Among those R&D active companies, 66% reported at least one product innovation and 51% reported at least one new process innovation. In contrast, of the almost 1.5 million non-R&D companies, only 7% reported new product innovations and 8% reported new process innovations. The BRDIS data also indicates that there is a clear positive relationship between R&D spending and increased instances of product or process innovations.

Manufacturing companies reported high instances of innovation (22% reported new product innovations and 22% new product process innovations) performed better than U.S. companies (9% in product innovations and 9% in process innovations) in general. Manufacturing sectors that had high product innovations include chemicals (41%), computer/electronic products (45%) and electrical equipment/appliances/components (37%). Only two manufacturing sectors also had high instances of companies with process innovations. They were Chemicals (34%) and computer/electronic products (33%) sectors.

Nonmanufacturing companies reported slightly fewer product (8%) and process innovations (8%) than the national averages. In this survey, most sectors had 10% or less of companies actively engaged in innovation. In the health care services sector, only 10% of companies reported process innovations. Only 8% of Finance/insurance companies reported product or process innovations. The only nonmanufacturing sectors to report high instances of product development were the information (30%) and some sub-sectors of professional/scientific/technical/related services reported high instances of innovation. These sectors with high innovation were typically related to software or IT development. Process innovation in the nonmanufacturing sectors also was very low. Only software publishers (54% percent of companies reported new process innovations) showed significant signs of innovation. Read the release ...