Innovators Lead the Way

Innovators Lead the Way

Wisconsin manufacturers know that innovation is the key to growth.  The National Science Foundation has just released preliminary data from a major study that underscores the manufacturing sector’s leadership in innovation.  Survey results from an estimated 1.5 million public and private for-profit companies show that nearly one in four manufacturers surveyed were engaged in product and process innovation, outpacing the innovation rates found in other industries.

Overall, 9% of all businesses surveyed were active product innovators in the period between 2006 and 2008, and another 9% were process innovators.  In contrast, manufacturing industries in aggregate had a high rate of both product and process innovations:  Twenty-two percent of manufacturers reported one or more product innovation(s) and 22% reported process innovations.  Manufacturers accounted for 8% of the total 1.5 million respondents.

Certain types of manufacturers demonstrated even higher rates of innovation:

Non-manufacturing industries’ overall incidence of innovation is relatively low compared to manufacturing: 8% reported product innovations and the same percentage reported process innovations.  A notable exception is the information sector with 30% reporting innovations.

R&D or not to R&D

It’s no surprise that the survey found a much greater rate of innovation in companies with Research & Development activities. Approximately 3% of the surveyed companies performed and/or funded R&D in 2008: 66% of these were product innovators and 51% were process innovators. It also appears that companies with the most R&D reported the highest incidence of innovation. Businesses that spent $50-$100 million in R&D had a 76% incidence of product innovation and a 69% incidence of process innovation.

Companies with no R&D activity (97% of all companies surveyed) had a 7% incidence of innovation and just 8% reported process innovation.

Statistics show what we already know

Manufacturing is leading the way in the recovery, and this survey points to an obvious reason – manufacturers drive the development of new products and are relentless about improving their processes. Manufacturers have been operating in an extremely competitive environment for years and have developed the agility, flexibility and innovation that prepared them to weather the recession and spur new growth for themselves and other businesses.

For the NSF InfoBrief report that provided the statistics for this article, click here.