PhillyInc: R&D is alive and well in the United States

It's understandable to worry that the United States' best days as an innovator may be over.

Manufacturing has declined steadily since the 1970s as the U.S. economy has become more heavily dependent on growth in the service sector. Given that scientists and engineers toiled in labs to dream up products that U.S. factories made, it's not a great leap to suppose that less manufacturing means less research and development.

Well, a new survey developed jointly by the National Science Foundation and the U.S. Census Bureau may not settle any dinner-table arguments, but it overhauls how the nation has collected data about R&D for the last six decades.

Since 1953, the NSF has provided estimates through its Survey of Industrial Research and Development. Under that series, annual inflation-adjusted company-funded R&D rose in all but six years, while federally funded industrial R&D increased in about half of the years.

But there was a definite concern that the survey was missing a big piece of the R&D puzzle because it was focused only on domestic activity. It was obvious many U.S. companies were shifting research offshore, while foreign-based corporations were locating R&D labs in the United States.

The new Business R&D and Innovation Survey, which published its initial results Wednesday, aims to provide a deeper picture.

The survey of 39,553 companies found worldwide R&D expenses of $330 billion, of which $234 billion worth was performed in the United States by domestic companies in 2008. It also found $49 billion spent here by federal government agencies or labs, higher education, and foreign corporations or governments.

That total of $283 billion in domestic R&D expenditures for 2008 can be compared with the $269 billion from the NSF's old survey.

But what cannot be compared is the $62 billion spent by domestic sources outside the United States. At $11 billion, the pharmaceutical sector accounted for the largest share of that research offshoring. But the automotive, semiconductor, and software industries collectively spent $21 billion on R&D across the border.

Arden Bement, director of the NSF, said in a webcast with reporters that it was clear to him from the data that the United States was not falling behind in its commitment to R&D spending.

Bement was also impressed with the amount of research spending by small business. At $63 billion, R&D spending by firms with five to 499 employees accounted for 22 percent of the business R&D done domestically.

Future data releases will provide breakdowns of research spending by state.

Fly, Flyers, Fly

The William Penn statue atop City Hall may not be sporting a Philadelphia Flyers jersey as these Stanley Cup Finals get under way, but come Friday expect to see a lot of orange and black in the workplace.

Like a lot of companies, Vanguard Group still has casual Fridays, when employees may ditch the ties and power suits. But depending on the sports season, you often see a lot of team jerseys on Fridays.

Vanguard spokesman John S. Woerth said the Malvern corporate campus would be "Flyered up" for Friday. But out in Scottsdale, Ariz., where the mutual fund giant has a regional office, you are more likely to see Steve Nash jerseys as the Phoenix Suns and the Los Angeles Lakers fight in the NBA's Western Conference finals.

During a speech Tuesday, Vanguard chief executive officer F. William McNabb III told the audience it's easy to guess what he wore on past "jersey days" during football season. But when the Philadelphia Eagles traded quarterback Donovan McNabb to the Washington Redskins in the off-season, the top Vanguardian had a quandary:

What would he wear?

He offered a sneak peek to the 350 people in the audience when he held up the No. 18 jersey of Eagles wide receiver Jeremy Maclin.

"It's close," McNabb said.