NEWSRELEASE
For Release: November 14, 2008
Contact:
john.mcdowell@sba.gov
SBA Number: 08-33 ADVO
Small Businesses Are America’s Innovators
Patents Per Employee Outstrip Those Of Larger Firms
WASHINGTON, D.C. – Small businesses are the innovators of the American economy as they obtain many more patents per employee than larger firms, according to a study released today by the Office of Advocacy of the U.S. Small Business Administration. Moreover, their patents outperform larger firms on a number of measurements, suggesting that small firm patents in general are more likely to be technologically important than those of larger firms.
“Small firms are the innovative driver of the American economy,” said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. He added, “This report adds more weight to the evidence we already have that encouraging small firms is the best way to increase innovation, productivity, and jobs.”
The report analyzes a database of 1,293 small and large technology firms and more than 1 million patent records between 2002 and 2006. An Analysis of Small Business Patents by Industry and Firm Size, written by 1790 Analytics, LLC, with funding from the Office of Advocacy, builds on earlier work of the authors in 2003 and 2004.
Not only do all small firms (<500 employees) obtain more patents per employee than larger firms, but the relationship seems to hold for all size classes. That is, firms with fewer than 25 employees have a higher patent per employee ratio than those with fewer than 50 employees and so on.
The authors found that during the period studied, small firms made up 40 percent of all firms with 15 or more patents. They also found that the smaller patenting firms are younger, with 56.5 percent under 15 years old, while 90 percent of the larger firms were 15 or more years old.
The Office of Advocacy, the “small business watchdog” of the federal government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats, and it funds research into small business issues.
For more information and a complete copy of the report, visit the Office of Advocacy web site at
www.sba.gov/advo.###
The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. For more information, visit
www.sba.gov/advo, or call (202) 205-6533.