• Business Week, Thursday, May 8, 2008 10:19 AM

America's lead in creating new products and services has remained remarkably resilient over the past decade--even as more research and development by U.S. companies is done offshore, according to a new study published by the National Academies, the Washington organization that advises the U.S. government on science and technology policy.

The 371-page report titled "Innovation in Global Industries" won't reassure all skeptics that the globalization of production and R&D is good for the U.S. One drawback is that most of the conclusions are based on old data: In some cases the numbers are from 2002.

But the authors marshal a wealth of evidence to show that despite an explosion of outsourcing to India and Ireland, for example, America's software industry still trumps the rest of the world in exports of packaged software and services, patent activity, and venture capital investment. When it comes to biotechnology, the U.S. lures more venture capital than all other countries combined.

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