by Francisco Moris and Nirmala Kannankutty
Companies located in the United States that performed or funded research and development domestically or overseas employed an estimated 27.1 million workers worldwide in 2008 (table 1). R&D employees (employees who perform or directly support R&D activities) accounted for 1.9 million, or 7.1%, of this worldwide employment. The domestic employment of these companies totaled 18.5 million workers, including 1.5 million domestic R&D employees. Thus, domestic R&D employment accounted for 7.9% of companies' total domestic employment and for 77% of their worldwide R&D employment. In 2008 companies reported $346 billion of company-performed R&D worldwide; 82% of this activity was performed in the United States.
Table 1 Source Data: Excel file
Workers engaged in R&D activities have a direct input into the creation and diffusion of knowledge, and in turn contribute to innovation and economic growth. The figures in this report are the first employment statistics to be released from the new Business R&D and Innovation Survey (BRDIS), developed jointly by the National Science Foundation (NSF) and the U.S. Census Bureau. These statistics are preliminary; final data will be available in early 2011. Employment statistics in this InfoBrief refer to headcounts. See "Definitions" and "Survey Information and Data Availability," below, for further information.
New measures from BRDIS related to R&D employment that will be available in future publications include R&D employment by selected occupational category (engineers, scientists, technicians, and support staff), level of educational attainment (PhD and other college degrees), and sex. The survey will also provide the number of non-U.S. citizens with temporary visas (such as H-1B or L-1) who are employed by industry as R&D scientists and engineers in the United States.
R&D Employment Intensity
The proportion of R&D employment relative to total employment, or R&D employment intensity, is one indicator of a company's involvement in R&D activity. Examination of this indicator across the industries into which companies were classified shows that worldwide R&D employment intensity in some industries is much higher than the 7.1% figure for the aggregate of all industries. Scientific R&D services (31%), communications equipment (27%), and computer systems design and related services (25%) top the list (figure 1). These three industries plus semiconductor and other electronic components, software publishers, and pharmaceuticals and medicines accounted for about half of worldwide company-performed R&D expenditures in 2008 (table 1).
Figure 1 Source Data: Excel file
Domestic and Foreign R&D Employment
About 1.5 million (77%) of companies' 1.9 million worldwide R&D employees worked in the United States, and 448,000 (23%) worked at foreign locations of U.S. companies in 2008 (table 1). As a group, manufacturing industries reported that 74% of their worldwide R&D employment was domestic, compared with 80% for nonmanufacturing industries. Industries with domestic R&D employment shares of 80% or more included both small R&D-performing industries (less than one billion dollars in company-performed R&D), such as wood products or primary metals manufacturing, and large R&D performing industries with historically significant shares of federally funded R&D. The latter include aerospace products and parts and scientific R&D services industries.
Only three industries, all in manufacturing, reported domestic R&D employment as a percentage of worldwide R&D employment below 70%: communications equipment, semiconductor and other electronic components, and motor vehicles, trailers, and parts. This last industry had the lowest domestic R&D employment share at just over 55% in 2008.
The closest indicator of domestic R&D employment from the predecessor Survey of Industrial Research and Development (SIRD) reported 1.1 million full-time equivalent (FTE) R&D scientists and engineers in 2007. The SIRD measure is not directly comparable with BRDIS domestic R&D employment figures, which are headcounts. In general, numbers for headcounts are larger than those for FTEs whenever companies have employees that devote time to both R&D and non-R&D functions or have employees that work on a part-time basis. Further, the BRDIS measure includes not only R&D scientists and engineers but also their managers, along with technicians and support personnel.
Company-Performed R&D Expenditures per R&D Employee
Company-performed R&D per R&D employee varied among domestic and foreign activities. Worldwide, companies spent about $181,000 on R&D per R&D employee, whereas the domestic and foreign figures were estimated to be about $194,000 and $140,000, respectively. R&D funds spent per R&D employee were higher for manufacturing industries ($210,000) than for nonmanufacturing ($139,000). Within each of these aggregates the domestic company-performed R&D per R&D employee exceeded the estimated corresponding foreign figure. The pharmaceuticals and medicines industry had the largest R&D funds per R&D employee among all 4-digit industry classifications for worldwide ($378,000), domestic ($396,000), and foreign ($319,000) activity.
Definitions
Company. A business organization of one or more establishments under common ownership or control. A company includes all subsidiaries and divisions in which there is more than 50% ownership, no matter where the subsidiary or division is located.
Company-performed R&D. The total of the amount a company pays for R&D performed in its own locations for its own benefit plus the amount paid for by others for R&D performed in the company's locations for others' benefit.
Domestic locations. The 50 states and the District of Columbia.
Foreign. All geographic locations except the 50 states and the District of Columbia.
Full-time equivalent (FTE). A full-time equivalent takes into account employees who do not work full-time, and for BRDIS, employees who do not work on R&D activities full-time. For example, an employee who works half-time would be counted as one employee on a headcount basis but as one-half an FTE employee.
Industry. Industry refers to 2-, 3-, or 4-digit codes used by the North American Industry Classification System (NAICS) or group of NAICS codes used to publish statistics resulting from the survey. Comparisons in this report are made among 4-digit industry classifications except for wood products and primary metals manufacturing, for which 4-digit detail was unavailable.
R&D employment. R&D employment refers to headcounts of all employees providing direct support to either R&D paid for by the company or R&D paid for by others not owned by the company, such as R&D the company performed under a grant or contract. R&D employees include scientists and engineers working on R&D as well as R&D managers, technicians, administrators, clerical staff, and interns providing direct support to R&D. R&D employees do not include staff providing indirect support, such as security guards and cafeteria workers. Leased employees, temps, and on-site consultants are not counted as R&D employees.
R&D funds per R&D employee. Company-performed R&D divided by R&D employment.
Total employment. All employees during the pay period that includes 12 March 2008, including employees on paid sick leave, paid holidays, and paid vacations.
United States. The 50 states and the District of Columbia.
Worldwide. All geographic locations, including the United States.
Survey Information and Data Availability
The sample for BRDIS was selected to represent all for-profit companies with five or more domestic employees, publicly or privately held. The resulting sample can produce estimates for companies that perform or fund R&D or engage in innovative activities in the United States. Employment estimates are based on companies that performed or funded R&D. The statistics from the survey are based on a sample and are subject to both sampling and nonsampling errors.
For 2008, 39,553 companies were sampled representing 1,926,012 companies in the population. The estimated number of companies that reported worldwide R&D expense was 58,304 and the estimated number that reported R&D paid for or funded by others was 11,453. The estimated number that reported both worldwide expense and funded R&D was 7,679. The overall response rate was 77.4%; the response rate for the top 500 domestic R&D-performing companies was 92.6%. Industry classification was based on the dominant business activity for domestic R&D performance where available. For companies that did not report business activity codes for R&D, the classification used for sampling was assigned.
More detailed information about the survey sample and methodology will be available in the forthcoming survey description at http://www.nsf.gov/statistics/survey.cfm. Copies of the BRDIS questionnaires and comparisons of BRDIS with the predecessor survey are available at http://www.nsf.gov/statistics/srvyindustry/about/brdis/. Coefficients of variation and imputation rates for the statistics in this InfoBrief are available from the authors.
An InfoBrief on business innovation is being prepared and will present additional preliminary BRDIS data for 2008. Detailed tables for 2008 will be available in the report R&D and Innovation in Business: 2008 at http://www.nsf.gov/statistics/ in early 2011. Individual tables may be available in advance of publication of the full report. For further information, please contact the authors.
Notes
[1] Francisco Moris, Research and Development Statistics Program, Division of Science Resources Statistics, National Science Foundation (SRS/NSF), 4201 Wilson Boulevard, Suite 965, Arlington VA 22230 (fmoris@nsf.gov; 703-292-4678). Nirmala Kannankutty, Office of the Division Director, SRS/NSF, 4201 Wilson Boulevard, Suite 965, Arlington VA 22230 (nkannank@nsf.gov; 703-292-7797).
[2] The predecessor Survey of Industrial R&D reported that respondents employed 16.7 million total workers in the United States in 2007. However, this measure was based on R&D performers only and thus excluded companies that funded but did not perform R&D.
[3] Worldwide company-performed R&D was derived by totaling the domestic and foreign performance cited in U.S. Businesses Report 2008 Worldwide R&D Expense of $330 Billion: Findings from a New NSF Survey, NSF 10-322, table 2, available at http://www.nsf.gov/statistics/infbrief/nsf10322/.
[4] For general information on BRDIS see U.S. Businesses Report 2008 Worldwide R&D Expense of $330 Billion: Findings from a New NSF Survey (NSF 10-322), available at http://www.nsf.gov/statistics/infbrief/nsf10322/.
[5] SIRD measured R&D employment exclusively on a full-time equivalent (FTE) basis and focused on R&D scientists and engineers. Future BRDIS data will also include an FTE measure, but only for domestic R&D scientists and engineers. Estimates will be available in early 2011.
[6] The closest indicator from SIRD shows that companies spent domestically $253,858 per FTE R&D scientist or engineer in 2007. The latter is not fully comparable with the domestic figure from BRDIS.
