Not Made in America: Where U.S. Innovation Really Comes From
Many of the country's best and
brightest ideas? Well, they're not exactly home-grown.
There's
probably no other country as innovative as the United States. At least that's the
trope. But recent statistics from the U.S. Patent Office and new independent
surveys suggest much of America's innovation is not home-grown: many of the
country's best and brightest ideas come from non-citizens.
"There's
the idea of the American melting pot, everything and everyone comes here,"
says Vivek Wadhwa, an entrepreneur and researcher of public policy at Stanford
Law School. "When we combine this with entrepreneurship and the American
Dream, world-changing ideas come from America."
The
U.S. has always been a country of immigrants. But it's also a place where
innovators from abroad patent their big ideas--though they may not necessarily
intend to become citizens.
Innovation by the Numbers
In
2013, 51 percent of the 303,000 patents filed in the U.S. were of foreign origin,
according to the USPTO. That's a decrease of one percentage point compared to
2012, but about equal to the percentage of foreign patents granted every year
for the past decade. To get some perspective, in 1963, only 18 percent of
patents originated from foreign sources.
The
force of foreign innovation is not only felt in patent creation, it's also in
the number of startups foreigners create in the U.S. The two are frequently
related, as the company usually commercializes the patented idea or product.
Additionally,
more than half of startups in Silicon Valley were founded by foreign-born
entrepreneurs, according to Wadhwa and the Kauffman Foundation. (Kauffman's most recent index, released on Wednesday,
also indicates that immigrant entrepreneurs are currently starting businesses
at a rate roughly twice that of native-born business owners.)
How Did We Get Here?
A
number of obvious factors contribute to the overflow of foreign ideas in U.S.
patents: The country has a vast consumer population, and its staggering $17
trillion gross domestic product is the biggest market in the world, so it makes
sense that entrepreneurs want to file patents here.
But
the U.S., with its breadth and depth of patent law, also offers more patent
protection than most other countries or regions. That's important for
innovators , should they wind up in court to protect their ideas against
infringers, experts say.
"Having
a patent in the U.S has a lot of benefit potentially," says George Beck, a
partner specializing in intellectual property at Foley & Lardner in
Washington, D.C. "The U.S has an established court system, and the
enforcement mechanisms are strong,"
Both
the size of the U.S. market and its strong patent protections were important
considerations to Vishal Sankhla, co-founder and chief technology officer of Viralheat, a social
media analytics company in Santa Clara, Calif.
Sankhla, who has raised $4.5 million
in funding from Mayfield Fund, filed for two patents in 2009, the same year he
founded his company. The patents, which cover technology that helps other
companies predict the buying preferences of customers, were granted just this
year.
"Ninety percent of our
customers and our competition [are] in the U.S.," Sankhla, who was born in
India and who has been in the U.S. for more than 10 years, says.
Sankhla's decision to get a patent
in the U.S., rather than other countries, also came down to two other
considerations: having recourse to the U.S. court system and the U.S.
International Trade Commission. The latter has the power to block potentially infringing
products from entering the country, Sankhla says.
Nevertheless, the process of getting
the patents was time-consuming and costly. Once all the filing and attorney
fees were factored in, it cost between $20,000 and $25,000 per patent, Sankhla
says. But that was essential for his company to grow, Sankhla says, adding
other foreign entrepreneurs are eager to come to the U.S for similar reasons.
"Having a U.S. patent available
to you is a whole different thing, and it is definitely very important in terms
of being able to take your idea to the next level," Sankhla says.
BY Jeremy Quittner http://www.inc.com/jeremy-quittner/foreign-patents-and-united-states-innovation.html?cid=em01020week15b
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