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Technology Assessment of the
U.S. Assistive Technology Industry

AT Technological Leadership, Research and Development

The strength of the larger U.S. companies operating in the AT market relative to small American players and foreign competitors may be influenced not just by marketing and distribution muscle, but also by their level of investment in research and development. As might be expected, the ten largest firms in 1999 spent the most per company on research and development–more than $52.1 million, or an average of $5.2 million per company.

In contrast, the second-tier group of companies spent $15.9 million in total — an average of $695,23814 per company for the same period. Only seven of the 27 companies in this category spent more than $1 million on R&D in 1999. The largest sum allocated to R&D by any single firm was $3 million.

R&D expenditures were dramatically lower at the third-tier level, where average spending for 319 companies in 1999 is estimated at about $171,00015 (See Section V for more on R&D investment). Just 17 of these 319 companies had R&D expenditures exceeding $500,000 in 1999 with the largest expenditure by a single company being $5 million.

For many of the U.S. AT companies that provided survey data, investing in R&D is not a high priority. With respect to applied research, nearly 24 percent of companies report that it is a primary activity and another 16 percent state that R&D is a secondary activity. The responses provided by survey participants (see Table 10) imply that for nearly 60 percent of companies applied R&D is not a significant function of their operations.

Table 10 -- Business Activity Characterization
Activity Primary Activity
(# of firms)		 Percentage of Respondents* Secondary Activity
(# of firms)		 Percentage of Respondents*
Basic Research 26 7.26 % 36 10.06 %
Applied R&D 85 23.74 % 56 15.64 %
Product Testing 40 11.17 % 49 13.69 %
Manufacturing 250 69.55 % 37 10.34 %
Assembly 134 37.43 % 32 8.94 %
Distribution 193 53.91 % 42 11.73 %
Consulting 19 5.31 % 49 13.69 %

Basic research was defined as the pursuit of a planned search for new knowledge, whether or not the research refers to a specific application. Applied R&D was defined as the application of existing knowledge to problems involved in the creation of a new product or process, including work required to evaluate possible uses, or apply existing knowledge to problems involved in the improvement of a present product or process.

Research and development (R&D) includes basic research and applied research in the sciences and in engineering, and design and development of prototype[s], products and processes. For the purposes of this survey, R&D includes activities carried on by persons trained, either formally or by experience, in the physical sciences including related engineering, and the biological sciences including medicine.

Source: U.S. Department of Commerce/BIS AT Survey

*Companies were encouraged to select as many types of activities as necessary to fully describe their business operations. As a result, many respondents selected more than one primary or secondary business activity. The responses appear above.

An even lower priority for AT companies is basic research, which may not provide any near-term payoff in the form of cash-generating product improvements or new products. Barely seven percent of the 359 participants in BIS’ survey consider basic research a primary activity of their company; and only 10 percent count it as a secondary activity. In short, basic research is not an activity that 85 percent of survey respondents engage in to any significant extent.

14 Average calculated on data provided by 23 second-tier firms.

15 Average R&D spending by 319 firms with 1999 annual sales revenue of less than $10 million is estimated based on data from 195 companies. No information was provided by the remaining 124 firms

 


 

                          

 
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