The Acquisition and Commercialization of Invention in American Manufacturing: Incidence and Impact

Ashish Arora (), Wesley M. Cohen and John P. Walsh

No 20264, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Recent accounts suggest the development and commercialization of invention has become more “open.” Greater division of labor between inventors and innovators can enhance social welfare through gains from trade and greater economies of specialization. Moreover, this extensive reliance upon outside sources for invention also suggests that understanding the factors that condition the extramural supply of inventions to innovators is crucial to understanding the determinants of the rate and direction of innovative activity. This paper reports on a recent survey of over 6000 American manufacturing and service sector firms on the extent to which innovators rely upon external sources of invention. Our results indicate that, between 2007 and 2009, 16% of manufacturing firms had innovated – meaning had introduced a product that was new to the industry. Of these, 49% report that their most important new product had originated from an outside source, notably customers, suppliers and technology specialists (i.e., universities, independent inventors and R&D contractors). We also estimate the contribution of each source to innovation in the US economy. Although customers are the most frequent outside source, inventions acquired from technology specialists tend to be the more economically more significant in term of their gross commercial value. As a group, external sources of invention make a significant contribution to the overall rate of innovation in the economy. Innovation policies, both public and private, should pay careful attention to external supply of invention, and the efficiency of the mechanisms mediating between inventors and innovators.

JEL-codes: L1 O3 O30 O31 O32 O34 (search for similar items in EconPapers)
Date: 2014-06
New Economics Papers: this item is included in nep-cse, nep-ind, nep-ino and nep-tid
Note: PR
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Citations: View citations in EconPapers (7)

Published as Ashish Arora & Wesley M. Cohen & John P. Walsh, 2016. "The acquisition and commercialization of invention in American manufacturing: Incidence and impact," Research Policy, vol 45(6), pages 1113-1128.

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Journal Article: The acquisition and commercialization of invention in American manufacturing: Incidence and impact (2016)
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