turing sector akine, the number oi individual 

 companies with a formal R&D program is 

 comparatively small. For example, in 1967 (the 

 latest year for which Census data on the total 

 number of manufacturing companies is 

 available) only 11,200 companies, or less than 5 

 percent of ail manufacturing companies, 

 reported having any R&D program. Further- 

 more, the proportion of companies conducting 

 R&D differed substantially by company-size 

 groups. In 1^67, only 4 percent of all manufac- 

 turing companies with under 1,000 employees 

 conducted any R&D, while 55 percent of 

 companies employing between 1,000 and 5,000 

 persons, and 88 percent of companies with 5,000 

 or more employees reported such efforts. 



Among the performers of R&D is a subset of 

 the small company group which consists of "high 

 technology" firms whose main objective is the 

 performance of R&D and the development of 

 new products. These new research-based enter- 



prises represent only a small percentage of the 

 total industrial R&D effort, but they have often 

 evolved into large firms that dominate market 

 segments and, in some cases, entire industries. 

 These science-based firms are predominantly 

 located in industries such as electronics, com- 

 munications, computers, aircraft, and nuclear 

 and medical instruments. ^o 



R&D intensity 



The proportion of an industry's human and 

 financial resources which are utilized for R&D 

 may be regarded as a measure of the "R&D 

 intensity" of that industry. The indices used 

 frequently for quantifying the level of R&D 

 intensity are (1) total and company funds 

 expended for R&D as a percentage of net sales 

 and (2) the number of R&D scientists and 

 engineers per 1,000 employees. Based on these 

 indices, each of the 15 largest R&D-performing 

 industries in the manufacturing sector was 



Measures of R&D intensity, by industry, 1961-72 



Mean over the 1961-72 period 



Industry 

 Group I 



Chemicals & allied products 



Machinery 



Electrical equipment & communications 



Aircraft & missiles 



Professional & scientific instruments 



Mean for group I 



Group // 



Petroleum refining & extraction 



Rubber products 



Stone, clay & glass products 



Fabricated metal products 



Motor vehicles & other transportation 



equipment 



Mean for group II 



Group 111 



Food & kindred products 



Textiles & apparel 



Lumber, wood products & furniture 



Paper & allied products 



Primary metals 



Mean for group III 



-" For further information on R&D in small companies, see 

 Thomas Hogan and John Chirichiello, "The Role of Research 

 and Development in Small Firms", in The Vital Majority: Small 

 Business m the American Economy, Small Business Administra- 

 tion, 1974. 



15.8 

 17.8 

 10.7 

 12.8 



19,4 

 16.4 



7.2 

 3.1 

 4.7 

 8.5 

 5.6 

 6.0 



0.9 

 2.0 

 1.6 

 1.3 



3.3 

 1.9 



0.4 

 0.5 

 0.5 

 0.9 

 0.8 

 0.6 



0.9 

 1.7 

 1.5 

 1.2 



2.5 

 1.6 



0.4 

 0.5 

 0.4 

 0.8 

 0.8 

 0.6 



-' Total net sales by Group I industries over the entire 

 1961-72 period were only 25 percent larger than sales by 

 industries in Group II and approximately 50 percent larger 

 than those of Group III industries. 



93 



