Innovation in the US Government

This chapter examines the US government’s intramural research and development over a 40-year period, drawing together multiple human capital, spending, and patent datasets. The US Federal Government innovates along four dimensions: technological, organizational, regulatory, and policy. After discussing these dimensions, we focus on the inputs to and outputs of government intramural technological innovation. We measure innovative effort and results by accounting for government scientists and dollars committed to R&D and patents created with government involvement. Overall, we show that intramural innovations, measured by government-assigned patents, are slightly more original and general, but less cited, than patents awarded to companies and non-government organizations patenting in the same technology classes. The majority of the 200,000 federal government scientists work at the Department of Defense, Department of Energy, and NASA, and are largely in physical science and engineering occupations; other agencies’ scientific expertise is weighted toward mathematics, social sciences, and data analytics. As these latter disciplines’ innovative outputs are less readily patented, measuring federal government innovative output with government-assigned patents is likely to over-emphasize innovations in engineering and physical sciences while underreporting innovations in other disciplines. We discuss implications of our findings for public- and private-sector innovation and identify questions for future research.