Who's Winning Innovation? Institutional and Organizational Explanations of Patenting in the United States, 1963-2012

With access to information and technology associated with the rise of the knowledge economy, the potential for individual innovation seems limitless. Yet, there are many ways in which organizations seem to dominate the current innovation landscape. According to the knowledge-based view of the firm, knowledge creation is the organization’s raison d’être. Organizational entities facilitate social interaction and the recombination of resources, technologies, and ideas, which are central to knowledge creation processes. Organizations also possess tremendous capabilities for developing, implementing, and diffusing novel alternatives, especially compared with individual innovators. Moreover, institutions increasingly legitimize organizations’ legal claims to innovative ideas. Given all these advantages, are individuals losing ground to organizations in the innovation process? In this paper we examine historical trends in patenting and estimate parameters for regression models for 362 metropolitan areas (Core Based Statistical Area [CBSAs]) in the U.S. The analyses indicate that since the early 1960s, overall rates of organizational patents are increasing while individual patenting rates have declined, especially compared to organizational patenting. Results from regression models also suggest that larger numbers of organizations in CBSAs is associated with decreasing individual patenting as a percent of total patents.