Richard Florida
by Richard Florida
Thu Jul 16th 2009 at 9:53am UTC

Global Sources of American Innovation

Yesterday, we looked at overall trends in U.S. innovation measured by patents. Today, we break out U.S. patents between U.S.-resident and non-resident or foreign inventors patenting in the U.S.

Numerous studies have shown that, over the past two or three decades, the role of foreign scientists, technologists, and entrepreneurs in U.S. innovation has increased. Recent studies by AnnaLee Saxenian and Vivek Wadhwa and others find that anywhere between a third and half of all Silicon Valley start-ups during the 1990s had a foreign entrepreneur or scientist on their core founding team. As I have previously argued, foreign-born scientists currently make up 17 percent of all bachelor’s degree holders, 29 percent of master’s degree holders, 38 percent of PhDs, and nearly 25 percent of American scientists and engineers. My earlier research shows that Japanese companies – and some European companies as well – chose to locate research labs in the U.S. to access a diverse mix of scientific talent they cannot attract in their home countries.

The graph below shows the overall trend in patenting for U.S.-resident and non-resident foreign inventors between 1980 and 2005. Non-resident inventors have just about pulled even with U.S. inventors in patenting, and their rate of inventive activity more or less tracks that of U.S.-based inventors. But here again, even with two dips since 2000, the rate and level of innovation over the past decade remains up.

Clearly, foreign inventors have become a key feature of the U.S. innovation system. Without them the level of innovation would be much lower. Another way of saying this is that the American system of innovation has become increasingly dependent upon non-resident inventors. Foreign inventors patent in the U.S. to secure intellectual property protection in the large U.S. market. Clusters of sophisticated and demanding consumers and end-users help make the U.S. the place to be for high-end innovation, as Amir Bhidé points out in The Venturesome Economy.

While foreign patenting boosts the overall rate of innovation in the U.S., there is a considerable chance that these patented innovations are commercialized and produced off-shore, and thus that the U.S. economy will accrue less overall economic benefit from those technologies. While this is not direct evidence for Mandel’s innovation interrupted thesis, it provides a possible mechanism that might limit the commercialization and overall economic impact of innovation in the U.S.

8 Responses to “Global Sources of American Innovation”

  1. Creative Class: Global Sources Of American Innovation | Lies My Gantt Chart Told Me Says:

    [...] Great data on foreign born innovation via patent filings over at Creative Class (see article here). This really makes the case for having an open immigrate policy rather than a closed border one. [...]

  2. Michael Wells Says:

    Fascinating if not unexpected. I wonder if the same percentages would hold in Canada and other high immigration countries?

    And while it’s not good for the American economy, it might not be an entirely bad thing for commercialization to boost developing economies or for immigrants to be a link between US and emerging countries like China, India, etc.

  3. Dale B. Halling Says:

    Your data also shows that there has not been extraordinary increase in the number of patents. As the US becomes an information economy, you would expect a greater number of people to be involved in inventive activities. This should result in an increasing rate of patents. However, my studies show that patents have increased less than the rate of GDP and patents to US residents have increased at a rate less than the population.

    For information on the Laws of Innovation see http://hallingblog.com/2009/07/15/natural-laws-of-innovation-1/

  4. Curt Says:

    I have to wonder about the ‘quality’ of the patents being applied for and granted. Certainly I’ve heard stories about what seem to be very trivial software features being turned into patents; it’s hard to say without good data whether this is a major factor overall or not…

  5. RS Says:

    Seems to me like the figure shows that patents granted to US residents have approximately doubled over the shown period while those for non-US residents have approximately tripled. Still yet, this has occurred under conditions where the patent acceptance rate has fallen by approximately 1/3 (beginning to systemically fall in 1999) and across at time period at which the US has become more concentrated in industries with less theoretical reason to patent in the first place (i.e. service sector).

    To me, this seems to be an extraordinary increase, espeically given the circumstances. As well, given that US population has not doubled (residents) or tripled (non-residents) over the period 1980-2006, I wonder how the per-capita patent rate could have possibly risen slower than population as others have suggested… that seems counterintuitive.

  6. Creative Class » Blog Archive » The New Geography of American Innovation - Creative Class Says:

    [...] Innovation The past couple of days, I’ve looked at the trends in overall patents and nationality of inventor. Today I turn to the regional distribution of innovation across U.S. regions.It’s well-known [...]

  7. Creative Class » Blog Archive » Innovation and Economic Crises - Creative Class Says:

    [...] With the help of my MPI team, I’ve tracked patent data since 1980, examined patent trends for U.S. resident and foreign, non-resident inventors, and looked at the geographic distribution of patenting.Overall, the trend [...]

  8. Michael Wells Says:

    Something that strikes me is that the resident and non-resident lines track each other pretty closely. Yes, non-residents are getting almost half of patents, way out of proportion to their numbers, but the peaks and valleys are the same as residents.

    The increase is fairly steady until 1998 when it jumps abruptly, levels off from 2001 to 2004, drops in 05 and rebounds in 06. What are those changes about? Is 98 to 01 the tech bubble?

    Looking back a few posts, “What’s happening to American Innovation”, applications started climbing in 1998 and haven’t slowed, while patents granted have gone up & down. Is this because of poorer quality applications or slower processing in the patent office? Or are the applications so innovative the patent office doesn’t understand them? Or was the patent office staff downsized during the Bush years?