The State of USA’s Innovative Capabilities

In a previous post, I talked about the tragedy of foreign inventors being granted more patents that American residents for the first time in history. While those who claim that it is only natural that emerging economies gain ground in the US, things seem to be more troublesome. In another study, numbers show that in 2009 the US owns a lower percentage of international patents than what it did in 2005. However, this trend wasn’t observed for other advanced countries such as Japan, Germany, France and Britain. All these other countries have advanced their share  of international patents. Therefore, saying that emerging countries are advancing as they should and that it is the main reason for foreigners being granted more patents doesn’t hold anymore.

Even more frightening, if it is true that other economies are emerging, then it is more important for American firms to go out there and get international patents, so they can own global markets who are now more attractive because of the said emerging economies. But what we observe here is the complete opposite and we see that America’s international position is weakening.

Now, like if all this wasn’t enough, American state universities will see their budgets shrink for around $3 billion. This is added to another $3 billion that was removed from budget last year. In other words, US administration is expecting a miracle since it is hoping that cutting costs will actually lead to more productivity from scientists. Now, taking into account that knowledge is created and transferred to firms from universities, investing less in universities will most likely lead to worse results in terms of innovation. Therefore, the only logical explanation to US administration’s cut in university endowment could come from it’s intention to offshore eve more of it’s innovative capabilities. Maybe the idea is to fight it’s own lack of innovation by bringing-in innovators from outside the country.