Charts

Immigrants are more likely to possess college and advanced degrees, and more likely to work in STEM fields. This in turn leads to disproportionate immigrant contributions to innovation.

Across sectors of the economy, business start-ups are less common than they were decades ago. The continuous decline across those three years demonstrates that the disappearance of start-ups is an ongoing trend and not primarily a cyclical phenomenon. The consistent fall in start-up rates across industries is suggestive of a broad-based rather than sector-specific trend.

This chart examines trends in entrepreneurship—defined here as self-employment with at least 10 employees—by the educational attainment of entrepreneurs. For people with more than a high school diploma, entrepreneurship is a less common vocation than it was 25 years ago. The decline is especially pronounced among those with advanced degrees: in 1992 4.0 percent of 25- to 54-year-olds with an advanced degree (beyond a bachelor’s) were entrepreneurs. By 2017 this rate had fallen to 2.2 percent.

Patent counts are one way to measure innovation. They are an imperfect measure, however, because patents vary in importance and some might be low quality. Due to varying standards, it is more difficult to make cross-national and over-time comparisons; making those comparisons can be informative about both innovation and differences in countries’ patent systems, however.

This chart shows the steep drop-off in women’s participation at each stage of involvement in STEM. Although 57 percent of all four-year degrees are earned by women, only 35 percent of STEM bachelor’s degrees go to women. Participation in innovation is even more limited: women make up just 22 percent of the STEM workforce and are responsible for only 16 percent of granted patents.

The innovation pipeline requires large inputs of R&D spending that might be difficult to monetize due to their substantial spillovers to the broader economy. In addition, these investments often yield benefits only many years later, which can complicate the process of organizing and financing the investments.

Though many patents are certainly valuable to workers and firms that possess them, it might be less immediately obvious whether patents are closely associated with innovation. Measuring this link is critical to understanding both the social benefits of the patent system and the usefulness of the patent-based approach to analyzing innovation. In this chart the share of firms reporting that they had implemented an improved product, service, or business method is plotted against the number of patents generated by every 1,000 employees.

Between 2000 and 2015, 59 percent of U.S. patents were awarded to applicants living in 20 metro areas with only 36 percent of the population. This chart shows the number of patent grants by metropolitan statistical areas, with larger circles indicating proportionally larger numbers of patents.

Patents are both a tool for promoting innovation and a useful metric by which to measure it. However, patents—even valid patents—also impose significant costs. This chart shows the annual number of defendants sued in patent lawsuits—a proxy for litigation costs—broken out separately for lawsuits filed by NPEs and operating companies.

Beyond R&D spending, a crucial input into producing patents is education. Contrary to the stereotype of the college-dropout entrepreneur, innovation—at least as measured by high-quality patent activity—is almost exclusively accomplished by people with advanced degrees.

While patents can and do come in all fields, the stereotype of a scientist or engineer generating a patent is broadly true, and industries with more STEM workers tend to patent more. STEM workers are distributed highly unevenly across industries.

This chart shows the fraction of immigrants in the United States in the labor force, STEM workforce, PhD-holding population, high-quality patent-holding population, and among Nobel Prize recipients in the sciences.

R&D spending—a key input into the innovation pipeline—is associated with a higher output of high-quality patents (defined as those filed in at least two offices). This relationship is evident within countries, and is also apparent when comparing countries, as shown in this chart.

From basic research to developing and bringing a new product to market, technological progress is increasingly costly. Although total R&D spending has increased as a share of GDP from  1953 to 2015, the share has increased little since the early 1980s, implying that the dollar value of R&D spending has risen along with GDP in recent decades.

The cost of computing has fallen spectacularly since the 1980s, creating a strong incentive for employers to substitute cheap technology for expensive labor. 

Solutions to the country’s growing water challenges lie, in part, with the development and adoption of new innovative technologies. Yet, in comparison to the clean energy sector, innovation in the water sector has remained low. Using the numbers of patents filed in clean energy and water purification as indicators, the clean energy sector has exhibited a much higher rate of innovation over the past decade.

Technological and medical innovations have drastically reduced the mortality rate and increased life expectancy in the United States

The United States lags far behind other countries in training students in the STEM fields that advance scientific and technological innovations.

Since the advent of computers, consumers have enjoyed greater bang for their buck as computers have become increasingly powerful.

In the past 40 years, as the pace of innovation has slowed, American workers have experienced lower growth rates of productivity and compensation.