Homegrown Innovation

Event with Undersecretary of Commerce David Kappos on Job Creation and Innovation

Undersecretary of Commerce David Kappos talks at a CAP event about how innovation and patent reform may be the critical, hidden component for U.S. job creation.

For more on this event, click here.

Technological innovation is responsible for three-fourths of our nation’s post-World War II economic growth rate, Undersecretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office David Kappos told attendees at a Center for American Progress event this week on the role of innovation and intellectual property in the U.S. economy.

The United States is beginning to pull itself out of the Great Recession, yet still faces a daunting unemployment problem as we try to get the 8 million people who lost their jobs back to work. There may be no single solution to jumpstarting employment growth, but Kappos argued that intellectual property is one area that doesn’t receive much attention yet could hold the key to creating scores of new jobs.

Kappos detailed how the USPTO can play a vital role in fostering a robust, competitive economy. He focused on the importance of strengthening patent protection, increasing efficiency in the patent application process, and fostering innovation in crucial sectors of the economy such as green technology.

Kappos argued that a system that strongly protects and enforces patents forms the bedrock of the United States’ economic growth. This approach encourages inventors, researchers, and businesses to create the kinds of innovations that give rise to new businesses and new jobs. “The economic success of the United States is deeply rooted in the history of American innovation,” said Kappos. And if we don’t adamantly protect intellectual property, our overseas competitors will appropriate, and perhaps even misappropriate, ideas, research, and technologies born within the United States in order to compete against us. This lapse in protection of intellectual property could spell the loss of untold numbers of domestic jobs.

Kappos cited AxleTech as an example of a company that has created a substantial number of jobs thanks to the intellectual property protections guaranteed by the USPTO. AxleTech is a company located in southwest Michigan that manufactures machine hardware and utilizes patent protections in its business model. “Since it began as a spin-off in 2002, AxleTech has more than doubled its workforce and it now employs more than 1,000 people,” said Kappos. “Take that as an example of a company that depends heavily on the patent system.”

When Kappos was sworn in to his position, he found himself confronted with an enormous backlog of patent applications left over from the previous administration. Due to the pressing need for more jobs in the current economic recession, Kappos is making efficiency a top goal at the USPTO, saying, “Reducing that backlog is one of my highest priorities” and that “the backlog of more than 700,000 patent applications stands as a barrier to innovation and economic growth.”

Estimates show that the United States could be losing billions of dollars annually due to the potential that withers in this extensive backlog. Kappos says this is “not acceptable.” He envisions a speedier, more transparent, and more flexible process that will not permit job creation to be stifled by a process that allows applications for patents on groundbreaking technology to wallow for years in an inefficient, log-jammed system.

Part of this goal of greater efficiency is recognizing that, “Some patents need to be issued more quickly than others,” Kappos said. He sees an important role for the USPTO in fostering the growth of certain crucial sectors of the economy, such as green innovation. “The USPTO is right in the middle of that equation,” said Kappos with regard to the current boom in technologies aimed at helping reverse climate change. The USPTO can both create jobs and tackle environmental issues by expediting the patent application process for more urgent inventions, research, and ideas.

Kappos cited a recent quote during his talk that was printed in the Harvard Business Review; it calls the USPTO the “biggest job creator you never heard of.” Intellectual property often isn’t the first thing that one hears about in discussions of unemployment, but it has a substantial impact on the continued growth of the U.S. economy. And through the implementation of Kappos’ vision for a more effective, efficient, and proactive USPTO, it is highly possible that we will start to see a significant increase in jobs stemming from innovation and intellectual property.

For more on this event, click here.

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