A study based on the patent-filing history of 760K+ US inventors finds they produce fewer innovations after joining big firms vs. inventors hired by young firms
Big companies are hiring an ever-larger proportion of America's inventors, who are less productive once they join LinkedIn: Christopher Mims . Tweets: @freakonometrics , @carnage4life , @carnage4life , and @anshublog LinkedIn: Christopher Mims : Is Big Tech's R&D Spending Actually Hurting Innovation in the U.S.? — Big companies are hiring an ever-larger proportion of America's inventors, who are less productive once they join … Tweets: Arthur Charpentier / @freakonometrics : “inventors are increasingly concentrated in large incumbents, less likely to work for young firms, and less likely to become entrepreneurs” https://bfi.uchicago.edu/... see https://www.wsj.com/... Dare Obasanjo / @carnage4life : Research shows that when people who've filed patents join big tech companies their compensation goes up and their patents filed goes down. The implication being big tech is bad for innovation except there's zero relationship between patents & innovation. https://www.wsj.com/... Dare Obasanjo / @carnage4life : The biggest filer of patents for the past 30 years is IBM and no one considers them an innovative company. OTOH, the GPT craze was spurred by a paper written by Google researchers not a patent. Also I have first hand knowledge from holding 20 patents. Innovation is unrelated. https://twitter.com/... Anshu Sharma / @anshublog : Big companies hire the best, ship the least. Wørd: https://twitter.com/...
Context & Ripple Effects
A Wall Street Journal analysis of 760K+ inventor patent histories lands on an uncomfortable asymmetry: large incumbents are absorbing a growing share of America's inventors, yet those same inventors file fewer innovations once inside. That reframes the earlier finding that the biggest companies' productivity growth came from investing in their own technology — scale bought efficiency, not invention.
The timing sharpens it. Giants are already cutting staff on big bets and moonshots like Alexa and Google X, and pivoting toward products that pay for themselves, so the marginal inventor hired into a big firm is landing in a shrinking exploratory bench. The study also echoes an older thesis that startups out-innovate incumbents precisely when incumbents look unassailable.
First-order effects
- Big Tech firms hiring inventors get less inventive output per hire than young firms do, while the pool of inventors available to startups and new entrants shrinks as concentration rises.
Second-order effects
- With giants cutting exploratory teams like Alexa and Google's moonshot groups and steering R&D toward revenue-bearing products, displaced researchers become the recruiting pipeline for younger firms — partially offsetting the concentration effect.
Third-order effects
- If incumbent hiring keeps concentrating inventive talent while suppressing its output, US innovation increasingly depends on whether capital reaches young firms able to re-employ that talent — otherwise the patent engine consolidates around fewer, less-productive corporate labs.
The trend: Inventive talent is migrating from entrepreneurial firms into large incumbents where it produces less, making startup access to experienced researchers the bottleneck for future innovation waves.