Invention, Knowledge Transfer, and Innovation

Creativity and scientific discovery produce broad economic and social benefits through an interrelated system of invention, knowledge transfer, and innovation. Government, businesses, universities and nonprofits, and individuals all play an important role in these activities. Internationally, both the developed and the developing world are key actors in this system.

Invention is the development of a new process or product that is potentially useful, previously unknown, and nonobvious. Patent data reveal a subset of inventions that have been granted a property right in exchange for public disclosure of the invention when the patent is granted. Patent awards are often used by inventors to protect their intellectual property. According to data from the U.S. Patent and Trademark Office (USPTO), the number of U.S. patents granted to both U.S. and international inventors in recent years rose to slightly more than 300,000 in 2016. Inventors from around the globe increasingly seek patent protection in the United States. Over the past decade, U.S. inventors annually received about half of all U.S. granted patents; inventors in Japan and the EU received most of the rest. However, a growing number of inventors in South Korea have received U.S. patents, while U.S. patents granted to inventors in China and India remain modest despite growing rapidly from small bases.

U.S. knowledge- and technology-intensive industries receive most USPTO patents granted to U.S. industries. U.S. high-technology manufacturing industries received slightly more than 60% of the 61,000 U.S. patents granted to manufacturing industries in 2015; medium-high-technology manufacturing industries accounted for almost a quarter. Commercial knowledge-intensive services received 87% of the 30,000 patents granted to nonmanufacturing industries in 2015.

Although patenting by academic inventors is increasing, it is still relatively limited with only about 6,600 U.S. patents granted in 2016. Five technology areas receive over one-half of the U.S. patents granted to U.S. academic institutions—pharmaceuticals (15%), biotechnology (14%), medical technology (11%), organic chemistry (7%), and measurement (7%).

U.S. patents granted, by selected country, region, or economy of inventor: 2006–16

Percent
YearUnited StatesEuropean UnionJapanSouth KoreaTaiwanChinaIndia
200651.414.121.23.43.70.60.3
200750.314.121.24.03.90.80.4
200848.913.921.44.84.01.00.4
200949.013.321.25.24.01.20.4
201048.814.020.55.33.71.50.5
201148.113.720.65.43.91.70.6
201247.514.320.15.24.22.10.7
201347.814.718.85.24.02.40.9
201447.714.918.05.53.82.71.0
201546.914.917.66.03.93.01.2
201647.114.816.56.43.83.81.2

U.S. academic patents, by selected technology area: 5-year averages, 2002–16

Number
Technology area2002–062007–112012–16
Biotechnology611640848
Pharmaceuticals468445841
Medical technology240267594
Measurement256309408
Organic chemistry240238414

Knowledge transfer is the process by which technology or knowledge developed in one place or for one purpose is applied elsewhere for a similar or different purpose. This transfer can take place freely, through knowledge sharing, as well as through exchange, for example by licensing or consulting. Citations from patents to S&E articles are one measure of knowledge transfer from research to patented inventions. These citations are overwhelmingly to articles from academic institutions, accounting for over 60% of citations across all S&E research fields. This dominance is not surprising, given the important role of academic institutions in producing peer-reviewed research. For patent citations to literature from nonacademic institutions, industry publications contribute the most to patenting in computer sciences (27%), physics (23%), and engineering (21%).

Federal agencies transfer technology through a variety of channels. Most measures of federal technology transfer track the number of activities, such as inventions disclosed, patent applications filed, and patents issued. Three federal agencies lead technology transfers—the Department of Energy, the Department of Defense, and the National Aeronautics and Space Administration. Federal government research publications also measure federal technology transfer and accounted for 7% of total U.S. S&E articles in 2016.

Citation to U.S. S&E articles in U.S. patents, by selected S&E field and sector of author: 2016

Percent
FieldAcademicFederal governmentFFRDCsNonprofitIndustry
Chemistry7134217
Computer sciences6811127
Medical sciences68501010
Engineering6634321
Biological sciences6751717
Physics6338123

FFRDCs = federally funded research and development centers.

Indicators 2018: Citations of S&E Articles and USPTO Patents, Chapter 8.

Federal technology transfer activity indicators for U.S. agencies with federal laboratories: FYs 2001–14

Thousands
YearPatents issuedPatent applications filedInventions disclosed
20011.62.24.0
20021.52.14.1
20031.62.35.1
20041.41.85.5
20051.01.74.8
20061.31.95.2
20071.41.84.5
20081.32.04.6
20091.32.04.5
20101.52.04.8
20111.42.35.3
20122.22.45.4
20131.92.55.3
20141.92.65.1

Businesses implement innovation through the introduction of new or significantly improved products and processes. Product innovations can include goods or services. Among U.S. companies, 17% report introducing a new or significantly improved product or process between 2013 and 2015.

Manufacturing firms reported higher rates of product and process innovations than did nonmanufacturing firms during that period (33% versus 15%). The lead innovators among manufacturing industries are computer and electronic products (57%) and electrical equipment and components (48%).

Nonmanufacturing companies report the highest rates of innovation among computer system and design services (44%), scientific R&D services (44%), electronic shopping and auctions (40%), and information (31%).

U.S. manufacturing companies reporting product or process innovation, by selected industry: 2013–15

Percent
IndustryShare of U.S. manufacturing companies
All manufacturing industries33.1
Paper33.6
Plastics and rubber products38.2
Petroleum and coal products38.4
Machinery44.4
Chemicals45.3
Transportation equipment45.6
Miscellaneous manufacturing46.7
Electrical equipments and components47.7
Computer and electronic products56.7

U.S. nonmanufacturing companies reporting product or process innovation, by selected industry: 2013–15

Percent
IndustryShare of U.S. nonmanufacturing companies
All nonmanufacturing industries15.4
Transportation and warehousing15.6
Health care services16.5
Architectural and engineering 21.4
Information30.5
Electronic shopping and auctions39.5
Scientific R&D services 43.7
Computer systems design services44.0

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