By Connor O’Brien and Adam Ozimek
Key Findings
- Foreign-born talent plays an indispensable role in innovation in strategic industries (those important for national or economic security).
- Immigrants are authors or co-authors on 30 percent of all patents in strategic industries. While making up just 20 percent of the workforce in strategic industries, immigrants have a much larger impact on innovation.
- Within strategic manufacturing industries, Communications Equipment (35 percent) and Semiconductors (34 percent) had the highest share of patents authored or co-authored by immigrants between 2000 and 2018.
Introduction
Nearly one out of every seven people who live in the United States is foreign-born. Yet the benefits of immigration have been much larger than immigrants’ share of the population would suggest. Foreign-born talent has been instrumental in American scientific and technological leadership, accounting for more than one-third of U.S. Nobel Prizes over the last decade. And as we will show, immigrants drive innovation in strategically important American industries.
We use U.S. patent data between 2000 and 2018 to estimate the share of patents with foreign-born authors by industry. We find that immigrants authored or co-authored 30 percent of patents within U.S. industries that are important for economic and national security, from semiconductors to automobile manufacturing to software development.
These results build on our previous research on high-skilled immigrants in the strategic industry workforce, further reinforcing our conclusion that America’s openness to foreign-born talent is vital for American security interests. The reform and expansion of our high-skilled immigration pathways, which are currently both outdated and undersized, must therefore be a national priority.
Immigrants drive patenting in strategic industries.
The strategic sector of the economy includes industries like Aerospace Manufacturing, Scientific Research & Development, Computer System Design, and Medical Equipment Manufacturing. The sector is largely split between manufacturing and professional services. (As with our prior research, we use the list of industries identified by Brookings Metro as particularly high both in R&D per worker and in the employment of workers in STEM—Science, Technology, Engineering, & Math—occupations.)
Within all strategic industries, we find that 30 percent of patents were authored by immigrant inventors. This is substantially higher than the 20 percent of the workforce that immigrants make up in this sector, as estimated in our previous work.
The share of patents that are immigrant-authored varies widely by industry. In the information industries considered strategic, 44 percent of patents originate from immigrant inventors. In professional services, the share is 38 percent.
The strategic manufacturing industry holds the vast majority of patents from across all the strategic industries. The share of its patents authored by immigrants is 29 percent—significantly higher than the 19.5 percent of its workers who are immigrants.
Geopolitical flashpoints like semiconductors and communications equipment manufacturing are especially reliant on foreign talent.
The two strategic manufacturing industries with the highest share of immigrant-authored patents are Communications Equipment (35 percent) and Semiconductor Manufacturing (34 percent). Each of these industries is at the forefront of economic competition between the United States and China.
The U.S. has cracked down on the use of telecommunications equipment from Chinese manufacturers like Huawei and ZTE in recent years, citing national security concerns. Viewing potential Chinese domination of 5G networks across the world as an unacceptable security risk, both the Trump and Biden administrations have also encouraged allied countries to limit or eliminate the use of Chinese telecommunications equipment in critical systems.
At the same time, the $52 billion CHIPS and Science Act includes subsidies to develop a domestic semiconductor manufacturing industry. And the Biden administration has continued to use export controls to prevent the sale of American semiconductor technology to China.
These policies can improve the global position of American companies in the short run. The subsidies have already boosted the construction of semiconductor factories—but they don’t guarantee that these factories will achieve and sustain a fast pace of innovation. Export controls can prevent the flow of sensitive technologies to adversaries because American companies own the intellectual property—but they don’t guarantee that American companies will invent the critical technologies of the future.
In the long run, America’s ability to secure its interests in these industries will depend instead on whether American companies can continue to innovate well beyond this moment of active policymaking. And that in turn depends on whether the United States is home to the most productive and innovative workers. Getting immigration policy right is thus vital both to establish American competitiveness in these industries and to fortify its geopolitical position.
The big picture: Immigrant talent is indispensable to strategic industries.
America’s openness to talent is an enormous strategic asset. Foreign-born workers account for one-fifth of the workforce in industries critical to economic and national security, slightly more than their share of the overall workforce. But immigrants make up even greater shares of the highest-skilled workers in strategic industries. One-quarter of strategic industry workers with a college degree or higher are foreign-born. An estimated 36 percent of workers with a graduate degree in strategic industries are foreign-born.
Finally, as we have shown, immigrants are a disproportionate driver of innovation in strategic industries. Maintaining and expanding American firms’ ability to recruit the best and brightest from around the world will directly influence whether the United States ultimately wins the race to dominate the next generation of emerging technologies.
American policymakers are increasingly focused on industrial policy, but they should not neglect the central role that high-skilled immigration plays in national competitiveness. Our existing high-skilled immigration system is badly broken. And yet, despite the roadblocks and bureaucracy we throw in their way, high-skilled immigrants are a competitive advantage. Indeed they are an advantage the United States should lean into rather than ignore.
Appendix: a note on the data
We use data provided by economist William Kerr based on his past work on the ethnic composition of U.S.-based inventors. He supplied us with estimates of ethnic patent shares by three-digit Standard Industrial Classification (SIC) industries, independent of immigration status. Already, the combined European and English ethnic shares reasonably approximate the overall foreign-born share found by Akcigit and Goldschlag (2023) using administrative microdata from the U.S. Census Bureau.
To get the granularity necessary to analyze strategic industries—which are defined according to four-digit North American Industry Classification System codes (NAICS)—we crosswalk Kerr’s SIC estimates to four-digit NAICS industries, then benchmark these estimates according to Akcigit and Goldschlag’s sectoral estimates. This gives us a representative estimate of the number and share of patents authored or co-authored by foreign-born inventors with granular industry details.
Our entire sample of patents filed with the United States Patent and Trademark Office (USPTO) between 2000 and 2018 (with at least one U.S.-based inventor) includes more than 2.1 million patents. While strategic industries make up 15 percent of overall employment, 62 percent of patents filed over this period were for inventions for strategic industries.
