Engineers Improve a Company’s Productivity Even When They Don’t Do R&D

If you are an industrial scientist or an industrial engineer who is working at a company that produces goods or services, you are more likely to be participating in the production process than to be doing R&D in a lab. That doesn’t mean that your and your colleagues’ technology adoption, domain knowledge, and approach to work don’t contribute to your company’s labor productivity and worker earnings.

A working paper issued in June 2017 by the U.S. National Bureau of Economic Research found that engineers at organizations that produce goods and services—even when they have non-research roles—still improve their organization’s labor productivity and employee earnings. The bigger the number of these employees, the higher the improvement in these two economic indicators.

The morals of the story? As a capitalist society and as people who lead businesses, we have yet to learn about the real, quantifiable impact of R&D on a country’s economy and an organization’s balance sheet.

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Note: The mentioned paper is NBER Working Paper No. 23484, “The Effects of Scientists and Engineers on Productivity and Earnings at the Establishment Where They Work,” by Erling Barth, James C. Davis, Richard B. Freeman, and Andrew J. Wang.

Innovation Manager at ICB, a software company. Curious about the technology of business and the business of technology.