A dynamic system of innovation activities, including invention, the transfer of knowledge, and the introduction of new products and processes, generates outcomes that range from new vaccines to counter a pandemic to advances in machine learning. Historically, participation has tended to be limited to higher-income regions, countries, and economies; within these locations, participation has tended to be limited to higher-income men. These trends are changing.

Intellectual property indicators, such as patenting and trademarks, show where new products and processes are emerging. Patenting and trademark activity by middle-income countries is increasing. This increasing participation of middle-income countries in intellectual property registration and other innovation activities results in both collaboration opportunities and competition challenges. Additionally, with the global supply chain being reliant on international S&E capacity, this interconnectedness generates widespread risk in terms of national security, transmission of disease, and disruption in global and domestic economies.

Both international collaboration and collaboration across sectors within and between countries contribute to globally important innovation activity. Domestically, annual statistics on knowledge transfer at universities and federal laboratories show that overall growth in research collaborations, technology licensing, and support for startups were slowed during the COVID-19 pandemic.

The process of innovation, from R&D to invention to the release of a new product, can be a long one, and recent data suggest that, overall, the incidence of this activity is declining. Based on self-reported company data, the introduction of a new product that is significantly different from other products by U.S. businesses as assessed over a 3-year period declined from 19% in 2017 to 9% in 2020.

The regional and demographic differences in invention activities (patenting) and innovation activities (trademarking) show that these critical activities are unevenly distributed among demographic groups and among geographic regions. Women also participate throughout the system, although their numbers are fewer than those for men.

Geographically, county data for the United States on patenting and trademark activity show that the intensity of innovation activities takes place unevenly across the country, with more dense activity in urban and metropolitan areas, along the East Coast and West Coast, and in the Northeast. This is consistent with patterns from other countries as well, where R&D, highly skilled workers, and patenting tend to concentrate in metropolitan areas (Planes-Satorra and Paunov 2017). Concentration supports local growth while other regions, lacking these attributes, grow more slowly. The underparticipation of large sections of the population provides an opportunity to increase innovation in multiple dimensions.

The data highlighted in this report also illustrate shifts in the locations and types of R&D activities and associated outputs. Chief among these shifts is the rise of China as a global contributor to inventive output. Another clear shift is the growing role of universities in private sector innovation. The last decade has seen a 50% increase in the number of university licenses and license options to private sector entities. This growth is due to university technology transfer to startups and other small companies; however, the scale of this activity relative to the overall economy is small. Invention, knowledge transfer, and innovation are indispensable to improving national and global health, well-being, and security.