The NSF has just come out with its latest report on innovation, and it’s a doozy. Basically, the NSF asked companies whether they engaged in product and/or process innovation, and here’s what they found out.
- Only 9% of companies engaged in product innovation in 2006-08. Only 9% of companies engaged in process innovation over the same period.
- Some industries were surprising low. Only 10% of healthcare services firms reported a process innovation from 2006-08.
- Only 8% of finance/insurance firm reported a product or process innovation in 2006-2008
- “Companies with R&D (either performing R&D or funding others to perform R&D) exhibit far higher rates of innovation than do non-R&D companies.”
The last result is extremely interesting. It means that the concentration of R&D is in fact a good proxy for the concentration of innovation. According to the NSF survey, only 7% of the companies without R&D report a product innovation over the past 3 years. But 66% of the companies with R&D report a product innovation. The gap for process innovations is almost as big.
You can’t be an innovative economy if only 9% of your companies are innovating.