The US as an Innovator

The US exports a surprising amount of knowledge, but is it falling?

By Nate Griffin – November 17th, 2021

The US received nearly $122 billion in royalties and license fees in Q3 of 2021. These fees come from a wide variety of products and services such as movies and entertainment royalties, but also from the use of technology in manufacturing and other sectors.

These fees, therefore, are a proxy for innovation and knowledge being shared overseas.

A 2014 analysis by the US International Trade Commission found that the European Union was by far the largest importer of US intellectual property, remitting nearly $42 billion in fees back to the US. China

That same report finds that the EU and Japan were both major exporters of intellectual property to the US, receiving 13.9 and 12.3 billion in royalty and license fees.

While total exports of intellectual property have been flat since about 2014, the percentage per GDP has been falling. This raises the question: Is the US investing enough in research and development of new technology?

Reference:

U.S. Bureau of Economic Analysis, Exports of services: Royalties and license fees [B684RC1Q027SBEA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/B684RC1Q027SBEA, November 17, 2021.