Entrepreneurs Lead in Green Innovation

Entrepreneurs Lead in Green Innovation

Small businesses have more patents per employee than large companies.

Small businesses are home to innovation, and that is particularly true when it comes to green technologies. A report released last week at the World Green Energy Symposium in Philadelphia by the Small Business Administration’s Office of Advocacy found that while small companies account for about 8 percent of all U.S. patents, they account for 14 percent of green technology patents.

The Analysis of Small Business Innovation in Green Technologies study also found that small businesses are even more productive overall than originally thought, as measured in terms of patents per employee. The current study finds that small innovative companies are 16 times more productive than large innovative companies in terms of patents per employee. That’s higher than found in previous studies.

“Small businesses are leading the way in green technology innovation as they have with innovation over all,” said SBA Chief Counsel Winslow Sargeant. “It is important that government help foster innovation which leads to commercialization.”

Previous Office of Advocacy studies on small business patenting activity identified the existence of a collection of independent, innovative small businesses with 15 or more patents over a five-year period. The studies also showed that innovative small firms had a higher percentage of emerging technology patents in their portfolios than their larger counterparts.

Looking at green technologies specifically, the recent study found that small companies account for more than 32 percent of the patents in both smart grids and solar energy, and 15 percent of patents in batteries and fuel cells. The study also concluded that green technology patents by small business are more “original and influential,” as they are cited 2.5 times more often than patent applications of larger companies.

The study suggests a migration of talent to small business. It showed that 80 percent of the “prolific” inventors—those with five or more recent green patents with a citation index of one or more—who are currently at small green technology companies had previously worked at large companies, or large government or university labs.

Large companies are four times more likely than small companies to have at least one green patent, but small companies are more likely than larger companies to have green technology as a core part of their business.

A recent focus on “green” jobs, businesses, and technology led to this study of a subset of these innovative patent holders. Click here for the report and research summary.

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