This chapter focuses on the creation of inventions, knowledge transfer, and innovation through the introduction of new and improved goods and services. Many indicators in earlier chapters focus on S&E fields that flow into basic research and innovation.

Taken as a whole, Indicators chapters show a dynamic system, with global players large and small. Knowledge creation through skilled and trained workers, producing research discoveries and new technologies, fuel a fast-changing, knowledge-intensive global economy. Throughout, Indicators provides insights into inputs and activities of the U.S. innovation system in relation to the rest of the world. These topics include the development of human capital in S&E (Chapter 1, Chapter 2, and Chapter 3), R&D expenditures (Chapter 4 and Chapter 5), peer-reviewed research activities (Chapter 5), trade in knowledge-intensive industries (Chapter 6), and public perception of science (Chapter 7). The State Indicators data tool provides state-level indicators for many of these topics.

This chapter’s indicators address invention, knowledge transfer, and innovation with high-quality data from a variety of sources, tracing through technology areas, industries, and product markets. While informative together, none provide a completely satisfactory innovation indicator alone. A key insight of this chapter is that a multiple-framework approach, when applied to complex and disparate data, can yield valuable insights into where and how innovation is taking place.

Looking forward, four main data challenges in the innovation system are (1) indicator coverage for all sectors of the economy, including households and entrepreneurs, government, and nonprofit institutions; (2) indicators of invention for unpatented inventions; (3) time series or other linked data to trace activities across time and geography, and finally, (4) indicators focused on impact and outcome measures for policy use.