Using patents and publications to assess R&D efficiency in the states of the USA q V.J. Thomas * , Seema Sharma, Sudhir K. Jain Department of Management Studies, Indian Institute of Technology-Delhi, New Delhi 110016, India article info Keywords: Patents R&D efficiency American Paradox USA BRICS American states abstract Even with the USA spending the largest amounts in R&D, its share in total patent grants worldwide has been declining. This decline is also evident in its share of world scientific publications. These develop- ments have been termed by some as the ‘‘American Paradox”. Extant research on R&D efficiency and tech- nological innovation capability has considered the USA as a homogeneous entity and has not focused at the sub-national level. This paper analyses the R&D efficiency of 50 US states and the District of Columbia. R&D efficiency is calculated as the ratio of patents granted and scientific publications to R&D expendi- tures. Only 14 states out of the 51 regions are found to exhibit positive changes in R&D efficiency between 2004 and 2008. Comparing this performance with that of the BRICS nations over the same period we find that Brazil, India, China and South Korea show significant improvements in R&D efficiency with India tak- ing the lead. This research identifies the states in the US with the highest R&D efficiency and presents benchmarks which can be followed by policy interventions. The paper highlights the importance of con- ducting analyses of R&D efficiency using patents and publications at the sub-national level for informed policy making. Ó 2010 Elsevier Ltd. All rights reserved. 1. Introduction It is widely acknowledged that the growth of knowledge based economies is fuelled by research and development (R&D) and tech- nological innovation. With large sums of money being invested in R&D by developed and developing countries, there is a growing interest in measuring scientific productivity and the efficiency of the R&D process. Initial comparative studies of scientific productivity of nations have focused mainly on developed countries [1–10]. These studies have led to the identification of various declines and paradoxes. The European Paradox [11,12] highlights the excellence of the European Union in scientific publications which does not get trans- lated to innovations and market success. Recently, attention has been drawn to the American Paradox which describes the falling world shares of scientific publications and patents of the USA de- spite world leading research investment [13–15]. This is generally attributed to the increasing world shares of various Asian nations like China and South Korea [16–22]. 2. Data and methods Patents have generally been accepted as indicators of the inno- vation and R&D process in the absence of more robust indicators [23]. The reason for using patents as an indicator has been the widespread availability of patent statistics collected over long periods of time across nations and regions. The USA has been able to provide patent statistics with breakdown for its various states. Even though not all inventions are patented and not all patents are useful, they have become the most common indicator of inno- vative output. Another, albeit an academic indicator of the R&D process, is the number of scientific publications. While publica- tions are a valuable source of information on R&D output, they may suffer from language bias [24,25]. Publications include arti- cles, letters, notes and reviews [26]. As most publications have multiple authors, sometimes from different countries, it becomes difficult to determine the contribution of different authors. Addi- tionally it is also difficult to divide multiple author papers among various countries. Several methods have been developed to resolve both these issues [26,27]. Publication output is also not the only form of scientific output. Project reports, monographs and other gray literature are equally important. However, as data on such outputs are not available, we use scientific publications as an R&D output. This may favor states with high scientific publica- tions. The data on patents is collected from the US Patent and Trademark Office [28] and the data on publications is compiled from the ISI Web of Knowledge Science Citation Index Expanded (v.4.1). 0172-2190/$ - see front matter Ó 2010 Elsevier Ltd. All rights reserved. doi:10.1016/j.wpi.2010.01.005 q A preliminary draft version of this paper was accepted for presentation at the Eighth Global Conference on Flexible Systems Management, Stevens Institute of Technology, New Jersey, USA (June 14–16, 2008). Although it was eventually not presented, it has been included in the CD of the conference proceedings. * Corresponding author. Tel.: +91 11 26591171; fax: +91 11 26862620. E-mail address: vjthomas_2001@yahoo.co.in (V.J. Thomas). World Patent Information 33 (2011) 4–10 Contents lists available at ScienceDirect World Patent Information journal homepage: www.elsevier.com/locate/worpatin