Technological intensity: Concept and measurement

Abstract Technological intensity, the degree to which scientific research effort contributes to an industry's productivity increase and/or revenue enhancement, is commonly measured by the industry's ratio of own-performed research to its output. If this R&D/output percentage is taken as an indicator of the need for public support, it is seriously misleading: an industry benefits as well by research undertaken by the foreign affiliates of its member firms, by its first- and higher-round suppliers, and by university and government laboratories. This view is supported by evidence from Canada.