NCPA - National Center for Policy Analysis

Local Research Fuels Innovation And Patents

February 19, 2001

According to a new report from CHI Research Inc., innovation is local. Businesses that once turned to giants like IBM and Bell Labs for technology ideas are now looking to universities and research institutes in their own backyards for new ideas.

Universities have become big players in innovation and patenting, led by a few dominant high tech regions like San Francisco, San Diego, Washington and Boston. During the last 20 years, the number of universities producing substantial numbers of patents more than tripled. The study also found that the West Coast has overtaken the Middle Atlantic regions in the number of patents awarded.

A look at U.S. patents across the past twenty years shows that the explosion of information and health technologies is changing how ideas develop into products.

  • In 1980 information technology (IT) accounted for 9 percent of U.S. patents.
  • By 1999 IT had grown to 25 percent of U.S. patents.
  • Health technology grew from 6 percent in 1980 to 13 percent by 1999.
  • From 1980 to 1999 health and IT accounted for 57 percent of the growth in U.S. patents.

In addition, small patentees slightly increased their share of patents during the mid-to-late 1990s.

  • In 1993 small patentees accounted for 44 percent of patents by U.S. companies.
  • By 1998, this had grown to 45 percent.

One clear trend is that in-state scientific capabilities are key to the success of local high-tech businesses.

Source: Diana Hick, et al., "The Changing Composition of Innovative Activity in the U.S. - A Portrait Based Upon Patent Analysis," Research Policy (forthcoming), CHI Research, Inc., February 9, 2000.


Browse more articles on Economic Issues