The Changing Structure of American Innovation: Some Cautionary Remarks for Economic Growth

Abstract

A defining feature of modern economic growth is the systematic application of science to advance technology. However, despite sustained progress in scientific knowledge, recent productivity growth in the United States has been disappointing. We review major changes in the American innovation ecosystem over the past century. The past three decades have been marked by a growing division of labor between universities focusing on research and large corporations focusing on development. Knowledge produced by universities is not often in a form that can be readily digested and turned into new goods and services. Small firms and university technology transfer offices cannot fully substitute for corporate research, which had previously integrated multiple disciplines at the scale required to solve significant technical problems. Therefore, whereas the division of innovative labor may have raised the volume of science by universities, it has also slowed, at least for a period of time, the transformation of that knowledge into novel products and processes.

How does basic research improve innovation performance in the world’s major pharmaceutical firms?

“…The relative importance of basic research in total R&D expenditures of firms has however declined over time, from 7 percent in 1991 to 5.5 percent in 2015. 2 Several explanations have been put forward to explain this decline (especially in the 1990s and 2000s), such as increased opportunities to tap into external basic research conducted by universities and start-ups and growing appropriation problems due to increased competition and knowledge spillovers (Arora, Belenzon, and Patacconi 2018;Arora et al 2020;Arora, Belenzon, and Sheer 2021).…”

University Innovation and the Professor's Privilege

“…2 Section V concludes. 2 Online Appendix I presents a simple model to further clarify motivations and pitfalls when giving majority rights to the university at the expense of the individual researcher. Online Appendix II considers additional empirical findings, studying the publication behavior of university researchers and how this changes with the reform.…”

Trademarks, patents and the appropriation strategies of incumbents: the scope of new firm formation in European regions

“…New firm formation is also positively associated with the share of young firms in patenting in the focal industry, in line with the evolutionary view of regional economic innovation and industrial dynamics (e.g., Louçã & Mendonça, 2002). On the other hand, a higher contribution of universities to the patent stocks in the region does not translate into higher levels of new firm formation, It may be that patents, if they are applied for by universities, may be further away from the commercialization phase (e.g., Arora et al, 2020) and less directly relevant for new firms looking for opportunities to benefit from knowledge spillovers. New firm formation is also significantly and positively related to GDP per capita growth and industry growth.…”