Innovation and the economic sectors

An analysis of the contribution of research and development and concomitant innovation to corporate market valuation was reported by Fluke and Kump. The data were further analyzed to ascertain the relative R&D investment in the service sector and the goods sector in a population of 30 companies most affected by accounting treatment of R&D expenditures; it was found that 97% of these companies are in the goods sector. All ten of the companies that have generated the most U.S. patents in the last five years are in the goods sector. Of the ten companies that made the largest investment in R&D, 90% are in the goods sector. Inferences related to the nature of the service sector are discussed.