Scientific output of small and medium size firms in high techindustries

The author focuses on the scientific output of small and medium-sized firms in high-tech industries in the US. The indicators for technological output have been defined differently by different researchers. Economists have used patents as the measure of research and development (R&D) output, partly because they are easier to delineate than other indicators. Behavioral researchers interested in the R&D management process have relied on publications as a surrogate measure for R&D output, while research in science policy and innovation has focused on products and processes as indicators of innovation and technical output. The author focuses on all three measures as indicators of R&D output and investigates the interrelationship among them as well as the correlates for this output. Except for the chemical industry. R&D expenditure is closely related to size as measured by annual sales, rather than the net income. It is observed that a growing firm is more likely to spend proportionately more money in R&D. The three output measures-patents, papers, and new products-are correlated, but the pattern of the relationship is different in different industries. It is noted that a firm's grown is linked with new products in only some industries. Patents do not seem to have any effect on sales growth. The growth in R&D is not a factor leading to a higher level of scientific productivity. The important factor is the average level of R&D spending. The policy implication for this observation is to maintain a steady funding level of R&D, avoiding sudden changes in R&D budget