Fewer US Patents Means Fewer US Jobs

I often try to balance out my writing – not being too extreme in either direction and since yesterday I ended the day with a very positive piece about the billions of dollars in communications M&A transactions, today I thought it worth mentioning the decline of US patents granted to Americans. Here is an excerpt from a BusinessWeek article on the topic:

For the first time in 2009, non-Americans were granted more U.S. patents than resident inventors, accounting for 50.7% of new grants, according to recent data from the Patent & Trademark Office. Moreover, for only the second time in the last 25 years, patent applications fell overall in the year ended Sept. 30.

The role reversal had been only a matter of time. Led by Japan and the likes of South Korea and China, other countries have been zigzagging their way higher in patent awards for decades, while the number granted to U.S. residents peaked in 2001. Still, the inflection point troubles American tech industry advocates and other analysts. “The U.S. is losing its innovation base,” says Robert D. Atkinson, founder and president of the Information Technology & Innovation Foundation (ITIF), a Washington think tank.

Perhaps the best part of the article is the quote from Mark Chandler, general counsel of Cisco Systems when referring to the US system of allowing the best and brightest from around the world to be educated in the US and then forced to leave the country, “We’re forcing these people to do their productive work elsewhere. They should have a green card stapled to their admittance letter.”

Of course the Great Recession is likely part of the problem as so many US-based companies cut spending to increase profitability but those people who value US ingenuity, competitiveness and job creation should be very worried about the future.

What should be done? The government should allow in- even court the best and brightest students from around the world – have them educated and then give them grants to start companies in the US. We should overhaul our immigration system, allowing the smartest and most productive citizens of the world easy access to jobs and opportunities in the US.

We should encourage entrepreneurship. Truly embrace it. President Obama should discuss it weekly while in office. We should give large tax credits to people who start companies. Furthermore, we should pay for their insurance for a few years. In short, let’s remember our roots – entrepreneurship – that is what makes this country a great place to live. Thanks to new jobs created by the automotive, manufacturing, service and computing industries, entire generations of Americans saw a tremendous increase in quality of life over their parents.

If we are interested in seeing our descendants living better than us – or even at the same level, we better understand the world is much more competitive than ever and India and China would be happy to become economic superpowers at our expense. They take competition very seriously and I have to ask seriously, do we?

If we truly want to boost employment – we need to think long-term and that means finding ways to create generations of good jobs by attracting the people who are most likely able to create them.

  • Ron Walters
    December 22, 2009 at 10:03 am

    Rich, I hope your comments spark real change in the way the US deals with its immigration policy.

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