WIPO’s World Intellection Property Indictors 2024 Report and What the Data Suggests re: US Competitiveness

The *World Intellectual Property Indicators 2024* report from WIPO sheds light on global innovation trends, with implications that are particularly critical for U.S. competitiveness. While global patent filings grew by 2.7% in 2023, driven largely by countries like China, South Korea, India, and Japan, the United States faces growing challenges in maintaining its leadership in innovation amid intensifying competition.

China’s dominance in patent filings is striking—it accounted for nearly half of global applications in 2023. India also saw a remarkable 15.7% increase, with resident filings surpassing non-resident ones for the first time. These trends highlight the rapid development of innovation ecosystems in Asia, fueled by targeted industrial policies and government incentives. For U.S. companies, this surge signals heightened competition as Asian firms increasingly secure enforceable patents in critical sectors such as electronics, automotive engineering, and renewable energy.

The report underscores a shift in global innovation dynamics. Asia now accounts for nearly 69% of all patent applications, a dramatic rise compared to a decade ago. This regional concentration suggests that the U.S. must adapt to an era where innovation hubs are diversifying and expanding beyond traditional Western strongholds. While the U.S. maintains a strong international footprint—particularly in cutting-edge fields like Generative AI—its domestic patent activity risks stagnation without proactive measures.

For American competitiveness, this data serves as both a warning and an opportunity. The U.S. has historically relied on its robust R&D ecosystem to drive innovation, but sustaining this edge requires policy adjustments that prioritize intellectual property protection and technological advancement. Initiatives like the Patent Eligibility Restoration Act (PERA) aim to clarify IP laws and expand patentability, particularly for emerging technologies like AI. Such measures are vital for countering challenges posed by foreign innovators and ensuring American inventors remain competitive globally.

Another key lever in all of this are the incentives the US provides to encourage and support innovation in the US in the first place! That incentives package has historically included: (1) R&D tax credits; and (2) full deductibility of research and experimental costs.

The US can do better to expand the ability to monetize the R&D tax credits in particular expanding the credit rate and expanding the applicability of the Qualified Small Business (“QSB”) payroll offset option. The US can also do better by restoring full deductibility of R&E costs under Section 174.

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