The reorganization of the American innovation ecosystem and the challenge of translating science

In this paper, we focus on lack of translational research as a potential explanation for the recent slowdown in productivity growth, as opposed to a slowdown in science or the decline in the novelty of science. We provide evidence that the translation of science (as measured through citations by patents) has dropped for novel science. This drop is correlated with the withdrawal of large firms from science (especially the physical sciences), as measured through their publications. Fields where venture capital-backed startups have entered have experienced an increase in the translation of science, but their entry has largely occurred in the life sciences and Information and Communication Technology. Sectors such as chemicals and materials science have instead been neglected, both by large firms and startups. Our results point to the role of large firms and their labs in facilitating the translation and commercialization of science. A growing division of innovative labor may have delivered gains from specialization in the production and use of science in some sectors, but appears to have left a void in others.

Duke Scholars

Author Sharon Belenzon Fuqua School of Business

Author Ashish Arora Fuqua School of Business