Startups are responsible for Big Tech’s innovation

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The Future. Big Tech is credited for having creative ideas, but a recent study suggests that startups generate much more innovation than the large companies who capitalize on them. If we truly prize innovation, we should make things easier for startups — not tech giants.

Patent discrepancy
A paper in The Strategic Management Journal measured the innovation of startups vs. large corporations.

  • The paper studied patent citations in the solar energy sector from 1976 to 2019, measuring the power and novelty of a patented idea by the number of times it was cited by later patents.
  • Startups outclassed large companies by this metric, accounting for about 12% of patents filed but 22.3% of future citations.
  • After two to three years, startup ideas far outpace Big Tech’s in citations, nearly doubling established companies’ citation rates nine years out.

1% inspiration, 99% corporation
While startups have most of the creative ideas, large companies are in a position to capitalize on them and scale them up. It’s not fraud to tweak an idea and sell it without compensating the idea’s originator — unethical though it may be.

But if all Big Tech really does is optimize for growth and profit, maybe we don’t have to cut them so many breaks.

Luke Perrotta


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