Inventing a New Economy
What patent applications can tell us about America's economic prospects.
It should surprise no one that increased spending on R & D generates the patent flow that we have been discussing.
A few caveats are necessary—not about the data but about drawing quick policy conclusions from it. A patent application filed and granted in the United States by a U.S. company might not generate many jobs or much economic activity in the United States if the production and marketing of any resulting product or service took place overseas. So a critical question that remains is whether innovation in the United States will continue to have as significant and broad-based an economic impact as it has in the past. On balance, is it preferable to have Apple doing its R & D here, even if it manufactures the iPod in China? Of course it is, because the R & D here creates great value and wealth. But the loss of manufacturing jobs to the rest of the world has enormous economic consequences for the middle class.
Historically, our economic growth has depended in large part on our ability to generate new ideas and innovations. In addition, while there can be substantial discussion about which policies will best keep our innovation engine churning, increased investments in education—especially in technical fields—and basic R & D seem critical to any agenda. If we want robust economic growth to return, then we had better figure out how to reverse some of the trends suggested by this quick examination of patent data.