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We know that innovation is a key driver of economic growth, but technical and social innovation has also spurred improvements in health, inequality, and social relations. Contemporary innovations in biology and artificial intelligence have tremendous potential to promote prosperity, improve health and education (including for the world’s most disadvantaged), and address global challenges such as pandemics and climate change.

The role of innovation in economic growth has become increasingly important. Innovation is essential for a healthy and thriving economy because it increases productivity, boosts consumer confidence and spending, generates increased profits for businesses, and creates new jobs. The result is that economists have calculated that approximately is attributed to innovation. It’s no secret that innovation is a . According to the Organization for Economic Co-Operation and Development (OECD), nations with environments conducive to innovation witness higher GDP growth rates than their peers who lack these conditions. By fostering innovation, we can create entirely new industries and revenue streams. The internet is a prime example of this: it has completely transformed how we conduct business and opened up a world of opportunity in terms of markets for goods and services.

Trademark pendency is a top USPTO priority. For over a decade, the agency maintained trademark first action pendency between 2.5 and 3.5 months. An unprecedented surge in trademark filings during FY 2020 and FY 2021 resulted in a backlog that, in turn, increased pendency. Although new trademark application filings have since declined and inventory is stabilizing, the backlog remains high and will likely remain so for the foreseeable future. Accordingly, the USPTO did not meet its total pendency target of 14.5 months for FY 2023, finishing the year instead at 14.6 months (0.1 months higher than goal). First action pendency, however, was 8.5 months, which met the planned target. During FY 2023, the USPTO launched the following initiatives to reduce trademark pendency and enhance customer communication: • Hiring examining attorneys and specialists. The USPTO hired 86 examining attorneys—a class of 46 in October 2022 and another class of 40 in April 2023—all of whom trained virtually. The Office of Trademark Services also hired additional specialists to support examination of maintenance fillings. • Enlisting paralegal support. The USPTO established the TMFlex program after analyzing paralegal support in the Register Protection Office (RPO). Paralegals hired under the program support investigative tasks, primarily for anti-scam work. TMFlex has streamlined anti-scam efforts and had a positive effect on final (disposal) pendency. The agency is also discussing possibilities for nonlawyers to assist in the application process. Publishing a website pendency widget. Based on stakeholder feedback, the USPTO added a pendency widget to several Trademarks webpages showing the date of applications currently in examination, thereby increasing transparency. • Exploring opportunities for efficiency. The USPTO hired a third-party management consulting firm to identify changes that could improve efficiency and effectiveness. Trademarks also holds regular internal ideation sessions with the union and USPTO leaders to brainstorm additional improvements and make the examination process more efficient. In addition, Trademarks is exploring opportunities to automate processes wherever possible.

Patent applications stabilizing allowing the USPTO to catch up

The USPTO’s Budget includes two distinct programs: the Patent Program and the Trademark Program. The agency receives fee collections for incoming patent and trademark work to finance patent and trademark operations, respectively. As a fully fee-funded agency, the USPTO relies on a comprehensive, multiyear budgetary outlook. Long-term planning estimates facilitate effective resource planning and inform fee setting over the five-year budget horizon. The five-year forecast summary reflects the USPTO’s point-in-time planning assumptions and budget priorities. The five-year estimates contain inherent uncertainty because future economic conditions upon which the USPTO bases fee collections and spending requirements are unknown. The USPTO routinely updates its fee collection forecasts, tracks operational and financial performance, and monitors changes in the economy to mitigate this risk of uncertainty. Appendix IV provides a detailed description of how the USPTO develops workload and fee collection estimates for the two programs. The USPTO has two [operating reserves] ORs: patent and trademark. The agency maintains OR balances to mitigate financial and operational risk (see the OR description in Appendix IV). The ORs contain[ing] unspent prior-year fee collections that, once apportioned by the Office of Management and Budget (OMB), are immediately available for use. The USPTO uses all available funding sources (i.e., appropriated fee collections and ORs) to finance agency operations continuously. The ORs supplement annual collections when annual spending requirements exceed revenue, help the USPTO manage cash flow when normal seasonal variability causes spending to exceed fee collections periodically, and provide funding for unplanned requirements necessary for the USPTO’s continued operations. The ORs are not distinct accounts or segregated fund balances. The USPTO manages the ORs within a range of acceptable balances (between minimum and optimal targets) and assesses its options when balances fall either below or above that range. Annually, the USPTO evaluates OR forecasts, including cash flow and any planned use of OR funds, as part of the budget formulation process and in accordance with the USPTO’s OR policy. The USPTO compares the forecasted OR balances to the operating range for both ORs. Minimum planning targets are intended to address immediate, unplanned changes in the economic or operating environments as the reserve builds to the optimal target level. The USPTO reviews minimum and optimal planning targets every three years to ensure the reserve operating range (between minimum and optimal targets) mitigates the severity of an array of financial risks. Based on the current risk environment, including various risk factors such as economic and funding uncertainty and the high percentage of fixed costs, the USPTO established a minimum planning level of 8% of total spending (or one month of operating expenses) and an optimal, long-range planning target of 22% (or about three months of operating expenses) for the Patent Program as well as a minimum planning level of 23% of total spending (or about three months of operating expenses) and an optimal, long-range planning target of 50% (or six months of operating expenses) for the Trademark Program. Annual OR balances do not include USPTO deposits in the Patent and Trademark Fee Reserve Fund (PTFRF), which is a separate account. When actual fee collections exceed amounts authorized in annual appropriations in any given year, the USPTO deposits the excess in the PTFRF. The USPTO cannot use PTFRF deposits immediately; thus, PTFRF balances do not mitigate short-term operational financing risks. The agency must notify Congress, using the congressional reprogramming process, before it may use PTFRF deposits to finance USPTO operations. Long-Term Planning As mentioned in the Executive Summary, the UAIA was enacted on December 29, 2022. The USPTO has identified the resources and budgetary requirements needed to satisfy UAIA provisions. The agency plans to continue refining costs associated with the UAIA in future budgets. Significant provisions of the UAIA include: • Establishment of satellite (regional) and community outreach offices: The law directs the USPTO to establish a Southeast Regional Office by December 2025 and to complete a study by December 2024 to determine whether additional satellite offices are necessary. In addition, it directs the USPTO to establish no fewer than four community outreach offices throughout the United States by December 2027. It also requires the agency to partner with local organizations to create programs that provide education on the patent system, promote career benefits of entrepreneurship and innovation, and educate prospective inventors in underrepresented populations and locations. • Updates to the Patent Pro Bono Program: the law directs the USPTO to increase efforts to enhance the Patent Pro Bono Program, including completing a study by December 2023 and submitting the results to the Committee on the Judiciary of the House of Representatives. • Pre-prosecution assessment pilot program: The law directs the USPTO to establish a pilot program to assist first-time prospective patent applicants in assessing the strengths and weaknesses of a potential patent application by December 2023. • Fee reductions for small and micro entities: The law increased small entity discounts from 50% to 60% and micro entity discounts from 75% to 80% on December 29, 2022. It also directs the agency to perform a fee study by December 2024 and to submit the results to the Committee of the Judiciary of the Senate and the Committee on the Judiciary of the House of Representatives. Cost Containment and Savings The USPTO is committed to fiscal responsibility. The agency makes prudent decisions to align spending priorities with fee collection projections to meet workload requirements and maintain sufficient OR levels. This Budget builds on $40 million in real estate savings assumed in the FY 2024 PB and beginning in FY 2025 to include an additional annual cost savings of $12 million through more leased space reductions in Northern Virginia. The combined reduction in campus space amounts to estimated annual cost savings of approximately $52 million. Further, despite upward pressure from inflation, supply chain disruptions, and government-wide pay raises, along with a steady appetite for IT improvements that offer business value to fee-paying customers, the USPTO will continue to achieve IT cost containment goals via systems and equipment modernization over the budget horizon. Patents Five-Year Outlook The USPTO continues to focus on producing accurate and consistent results in patent search and examination while improving timeliness. Ensuring the reliability of issued patents so stakeholders have confidence in patent grants requires the USPTO to invest time, training, and other resources, as supported by the Budget. In the FY 2025 Budget, the USPTO projects a 1.5% growth annually for serialized (original) filings—the largest component of the overall application growth rate—for FY 2024 and FY 2025 and a 1.0% growth each year between FY 2026 and FY 2029. Given current filing trends and other economic behavior assumptions, the USPTO plans to hire approximately 800 to 850 patent examiners in FY 2024 through FY 2025, and between 700 and 900 patent examiners in FY 2026 through FY 2029, as demonstrated in figure 1(a). As seen in figure 1(b), the USPTO projects an overall annual growth rate of 2.1% in UPR application filings in FY 2025. The agency calculates all patent spending and fee estimates based on these assumptions. The UPR annual growth rate differs from the serialized growth rate in that it also includes request for continued examination (RCE) filings. RCE filings comprise approximately 24% of disposal filings annually. The USPTO continues to engage in various initiatives designed to reduce RCE filings, which would ultimately reduce the total UPR filing growth rate.

New efforts to reduce backlog now

The increase in R&D expenditures has contributed to the surge in patent applications, but cannot fully explain it. Changes in competition seem to have played a key role in growing patenting trends in ICT industries. Some studies have reported the relevance of building patent portfolios and strategic patenting behaviour for firms in the US semi-conductor industry and the European mobile phone industry. Changes in patent regimes might have also contributed to the increase by making patents more valuable and easier or less costly to obtain. The surge in patenting in the United States, notably in ICT, started after important court decisions increased damage awards to plaintiffs in infringement litigation, hence increasing the value of patents (e.g. the Kodak-Polaroid case in 1986). The extension of the subject matter, notably in the United States, resulted in a greater number of patents for software and genetic inventions. In addition, high grant rates in the United States may have attracted more applications which in turn have generated more grants, and part of the surge in EPO might have come from a sharp reduction in patent fees (effective in July 1997). Overall, a mixed picture emerges, with part of the surge in patenting being explained by growth in inventions, notably in new areas, part being contingent upon changes in the economic environment and in patent regimes (Kortum and Lerner, 1999; Kortum, Eaton and Lerner, 2003).

We find evidence that the PTO is indeed overgranting patents during times in which the Agency lacks sufficient resources to meet its expected demand for examination. Moreover, our findings suggest that the PTO is preferentially granting those patents it stands to benefit the most from—those in high-continuation-filing-rate technologies, such as information and communication technologies, which include software, business methods, and information stor- age, and health-related technologies, which include surgical and medical in- struments and genetics. What are we to make of the evidence that the PTO is granting patents in an effort to diminish repeat filings? On the one hand it suggests that policymakers are generally correct in suggesting that the Agency allows too many bad pa- tents. Importantly, however, it also suggests that policymakers have been bark- ing up the wrong tree. By ignoring the important role that repeat filings play in influencing PTO decisionmaking, legal scholarship has overlooked a substantial source of Agency bias. As a result, the recent “fixes” to the patent system to improve patent quality fail to address the substantial overgranting bias identi- fied in this Article.11 Additionally, and equally as worrisome, policymakers have also failed to appreciate that the PTO may not just be biased toward al- lowing patents in general but also be biased toward allowing particular types of patents. Accordingly, recognition of the harms from the granting of bad patents has been underinclusive. To the extent that the PTO is extending preferential treatment to technologies based on backlog incentives and not based on legiti- mate social interests in intervening in certain industries, the Agency may also be undesirably distorting the allocation of resources across different sectors of the economy. That is, because the PTO is preferentially granting patents in high-continuation-rate technologies, such as information and communication and health-related technologies, society may be overinvesting resources in these technological fields. The rest of the Article is organized as follows. Part I briefly describes the primary complaint that scholars and stakeholders have registered against the patent system: the PTO issues too many bad patents. This Part also describes how the literature to date has failed to produce any persuasive empirical evi- dence demonstrating that the Agency is in fact biased toward allowing patents. Part II theorizes the PTO’s possible incentive to grant patents, introducing a model of agency behavior under resource constraints that predicts that the PTO will act on the incentive to grant additional patents when it faces binding re- source constraints—that is, when the Agency cannot meet its expected exami- nation demand through available resources. Part III refines this model of agen- cy behavior by examining how the PTO’s incentive to grant additional patents to curtail repeat filings likely varies across patent types. Part III culminates with the delineation of several testable hypotheses that will guide our empirical analysis. Part IV describes the dataset and the methodology employed to test our hypotheses. The results of our empirical analysis are presented in Part V. In Part VI, we explore the mechanisms of action that may underlie our primary results. Finally, Part VII evaluates the implications of our results and assesses potential methods to reduce the PTO’s tendency toward issuing patents. I. HARMS FROM PTO OVERGRANTING AND INSUFFICIENCY OF EVIDENCE A. Overgranting Explanations and Harms There is near-universal agreement that the U.S. patent system suffers from rampant shortcomings and failures.12 Many believe the root cause of the sys- tem’s malfunction is that the PTO grants too many invalid patents.13 The PTO’s perceived penchant for issuing invalid patents has been at- tributed to a multitude of causes. Some contend that the Agency suffers from poor management, while others argue it is hamstrung by the strength of its pa- tent examiner union. Both have been blamed for the structure of the PTO’s ex- aminer compensation system, which favors patent grants over denials.14 Others have argued that the PTO’s dearth of resources precludes it from spending suf- ficient time inspecting patent applications.15 Still others contend the Agency’s lack of expertise, especially in emerging fields of science, is the root cause of its overgranting proclivities.16 Finally, some have assigned responsibility to the Agency’s culture, noting that the PTO once famously asserted that its “primary mission” is “to help customers get patents.”17 Irrespective of the exact cause, invalidly issued patents—that is, patents that are granted even though the invention fails to meet the patentability re- quirements—impose significant costs on society. Such patents can be utilized by nonpracticing entities or patent trolls to opportunistically extract licensing fees from innovators;18 they can also impede competitors seeking to enter markets19 and stunt further innovation.20 Erroneously issued patents can inhibit the ability of start-ups to obtain venture capital, especially if a dominant player in the market holds the patent in question.21 Finally, such patents can also com- promise business relations for market entrants, as customers may be deterred from transacting with a company out of fear of a contributory patent infringe- ment suit.22 More generally, invalid patents can result in supracompetitive pricing and diminished quantity. While society may accept such consequences for a proper- ly issued patent, an invalid patent imposes these costs upon society without providing the commensurate benefits.23 That is, a PTO that is applying the pa- tentability standards in a patent-protective manner is likely to be routinely granting patents on inventions that either were already known or represent only a trivial advancement over existing scientific knowledge.24 As a result, a grant-biased PTO is likely to systematically issue patents that fail to provide any in- novation benefit.25

Starting in the early 1980s, there began a series of changes to patent policy and practice in the U.S. that have had the generally perceived effect of strengthening the protection that patents provide, and extending the applicability of that protection institutionally, geographically and technologically. Roughly coincident in time with these significant changes in the legal and institutional environment, there has been a dramatic, historically unprecedented surge in patenting by U.S. inventors. This confluence of events provides a major challenge and opportunity for scholars of technological change and for science and technology policy. On the one hand, significant changes in property-rights regimes do not happen very often and provide, at least in principle, an unusual set of “natural experiments” that ought to greatly improve our ability to understand how different regimes affect behavior. On the other hand, policy-makers have a right to expect that social scientists can analyze these developments and provide vital input regarding the economic and social consequences of policy changes of this sort.

As America’s innovation agency, the USPTO understands the importance of delivering timely, efficient services that help innovators, creators, entrepreneurs, and brand owners bring their ideas to impact more quickly and efficiently. Robust and reliable patents and trademarks offer meaningful, enforceable IP protection to those who hold them and those around them who operate in the same competitive landscape. Patents In FY 2023, the USPTO received 462,215 serialized patent applications (new patent filings), an increase of 1.0% over the number received in FY 2022. Patent grants totaled 346,152, a 2.0% decrease from FY 2022. While the quantity of patent applications (filings) increased, processing time remained relatively stable with some fluctuations. Design patent applications surpassed 53,000, slightly below the USPTO’s FY 2023 projection of 60,000. The USPTO established its patent timeliness goals based on PTA, the agency’s overall adherence to statutorily defined time frames. Reducing issued PTAs provides consistently shorter processing time for all applications and gives applicants greater certainty of timeliness in their own cases. The USPTO exceeded its FY 2023 PTA target of 80%, achieving 81% total compliance for mailed actions (i.e., office actions the agency mailed to applicants). An office action is an official letter from the patent examiner to the patent applicant during the patent examination process (i.e., patent prosecution). The USPTO did not meet its PTA compliance target for remaining inventory (i.e., cases awaiting action from the agency); total PTA compliance was 82%, 4% below the target of 86%. The agency has implemented numerous approaches to address remaining inventory, including catch-up overtime, revisions to the examiner award program, and increased hiring targets. In September 2023, the USPTO issued U.S. design patent 1 million, an important milestone in American innovation and creativity. The agency continues to address patent application inventory and focus on investments in patent examination quality, including application readiness, continuation practice, prior art and searching, training, and prosecution changes and enhancements to improve patent durability. The USPTO released several external surveys throughout FY 2023 to capture customer perceptions of its work quality. These surveys focused on respondent opinions regarding patent examiners’ adherence to rules and procedures; the correctness, clarity, and consistency of rejections; and overall examination quality. The agency invited more than 3,000 randomly selected frequent customers to participate, and results showed a quality net promoter score of 58, above targeted performance. This survey cycle marked the agency’s fifth consecutive reporting period and its highest results on record, with over 60% of customers rating the agency’s work quality as good or excellent. The cornerstone of the USPTO’s work is the quality of its IP protections. Emerging technologies using AI, machine learning (ML), and robotic process automation (RPA) bring potential opportunities to maximize both the USPTO’s operations and workforce. These tools can serve as catalysts for operating efficiencies and cost savings, enhancing the work of patent examiners and increasing access to prior art. For example, all patent examiners are now using the Patents End-to-End (PE2E) Search suite, and more than half regularly engage the suite’s AI search features. To date, these examiners have run about 1.5 million queries, an indication of their adoption and acceptance of AI technology. Further, over 67% of patent examiners have used Similarity Search, a PE2E addition launched in October 2022 that uses trained AI models to produce a list of domestic and foreign patent documents based on examiner-selected application criteria (e.g., specification). Agency technical teams perform rigorous testing on these tools, collect real-time examiner feedback, and make continuous improvements to the underlying AI and ML models to meet performance standards and foster effectiveness. Ongoing assessments have yielded positive results, and the human element of AI remains the USPTO’s guiding principle in these endeavors. Human input is critical to model improvement; in fact, AI empowers, rather than replaces, human experts by exposing relevant information and suggesting new avenues of investigation. In turn, this capability allows patent examiners to find more relevant prior art that strengthens office actions and improves the reliability of patentability determinations. Recognizing that patent applications are becoming increasingly complex and that technologies are converging, the USPTO will ensure patent examiners have access to the best prior art as early as possible in the prosecution process. To that end, the USPTO continues its stewardship of the Global Dossier— another tool that improves the reliability of determinations of patentability. The dossier, delivered by the Five IP Offices or IP5 (USPTO, European Patent Office, Japan Patent Office, Korean Intellectual Property Office, and China National Intellectual Property Administration), enables agency examiners to view work from any IP5 agency, including prior art references cited in related patent applications. Trademarks The USPTO received 737,018 trademark application classes for registration in FY 2023—50,777 classes fewer than FY 2022. Although the rate of new trademark applications declined, FY 2023 trademark filings were roughly in line with the 738,112 new applications filed in FY 2020, marking [marked] a return to historical growth rates. Two important metrics for measuring the Trademarks program are first action pendency and total pendency. First action pendency is the average time from the date an application is filed to the examining attorney’s first office action. Total pendency is the average time between the date an application is filed and the notice of abandonment, notice of allowance, or registration. Trademark pendency is a top USPTO priority. For over a decade, the agency maintained trademark first action pendency between 2.5 and 3.5 months. An unprecedented surge in trademark filings during FY 2020 and FY 2021 resulted in a backlog that, in turn, increased pendency. Although new trademark application filings have since declined and inventory is stabilizing, the backlog remains high and will likely remain so for the foreseeable future. Accordingly, the USPTO did not meet its total pendency target of 14.5 months for FY 2023, finishing the year instead at 14.6 months (0.1 months higher than goal). First action pendency, however, was 8.5 months, which met the planned target. During FY 2023, the USPTO launched the following initiatives to reduce trademark pendency and enhance customer communication:

C. The Patent System's Enthusiasm for Artificial Intelligence

The last section illustrated that there is much to be excited about concerning AI. The USPTO's interest in artificial intelligence signals a critical moment for U.S. innovation. Evidence suggests that the patent system is becoming less accessible to small businesses, women, and minorities. 230 Research from other domains reveals that artificial intelligence, when applied to a problem with blind technological optimism, furthers disparities in power. 231 If the U.S. ignores these trends, then it risks further alienating small businesses and innovators that have been integral to the story of U.S. innovation. This section describes the problem in further detail.

2. Comparing Pharmaceutical Prices in the United States and Other Countries

Facing criticism over exorbitant prices and monopolistic pricing practices, pharmaceutical companies claim that high average returns are necessary to incentivize pharmaceutical R&D, given its high-risk nature.139 Yet, with pharmaceutical companies ranking among the most profitable,140 pharmaceutical prices have sparked controversy throughout the years.141

The patent system has long been criticized for limiting access to pharmaceuticals. Patents grant inventors a limited period of exclusivity with an attempt to allow recoupment of investments in the invention process. In the pharmaceutical industry, this exclusivity and the resulting lack of competition leads to exorbitant prices. High prices limit access to potentially life-saving medicines and hinder achievement of the “highest attainable standard of health,” which several international instruments recognize as a human right.

The pharmaceutical industry claims patents are essential to encourage innovation in risky, lengthy and costly research and development (R&D) processes. But it has yet to put forward indisputable evidence to the actual effects of patents on innovation.

II. Patents in the Context of AI Systems and Pharmaceutical Innovation

A. A Brief Primer on Patent Law

Most technologies are developed by many inventors over many years, a process called “cumulative” innovation. Too often, however, early inventors get a patent on a small and perhaps insignificant piece of the technological puzzle, yet their patent covers the entire puzzle. Inventors who solve subsequent parts of the puzzle may need to pay royalties to the patentee, even if their contributions are larger.

As legal experts who focus on technology law and policy, we suggest that the problem boils down to two issues: too many patents and too little accurate information about them.

The framers of the U.S. Constitution were not wrong. Patents did serve an important purpose during the days when technology advances happened over decades or centuries. In today’s era of exponentially advancing technologies, however, patents have become the greatest inhibitor to innovation and are holding the United States back. The only way of staying ahead is to out-innovate a competitor; speed to market and constant reinvention are critical. Patents do the reverse; they create disincentives to innovate and slow down innovators by allowing technology laggards and extortionists to sue them.

A new paper, , by Robin Feldman, of the University of California-Hastings Law School, and my colleague Mark Lemley, of Stanford Law School, dispels what doubt there may have been about the innovation value of patents. They analyzed the experience of real companies to see how often patent licenses actually spur innovation or technology transfer when patent holders assert their patents against companies. They found that almost no new innovation resulted. When patents were licensed, regardless of whether they were licensed from companies, patent trolls, or universities, they were practically worthless in enabling innovation.

The Advisory Committee for Genetics Health and Society has also concluded that patent rights are “neither necessary nor sufficient conditions” for the development of genetic tests.170 Moreover, most empirical research shows that there is “little to no inhibitory effect” of DNA patents on later scientific research efforts.171 Further still, patents are not the only incentive system in place. For academic science, where substantial amounts of genetic discoveries are made, “public funding, professional rewards, and scientific norms of discovery already provide robust incentives for invention, thus undermining the justification for exclusive rights.”172 Thus, the Myriad holding that genes are patent-ineligible subject matter should not impede gene discovery efforts or development of genetic tests because patents were not a major driving force in the field to start.

In global pandemic crises like COVID-19, the urgency and scale of the crisis – as well as the spotlight placed on pharmaceutical companies – mean that contributing to the search for effective medicines, vaccines or diagnostics is essential for socially responsible companies in the sector.2 It is therefore unsurprising that we are seeing industry-wide efforts unfold at unprecedented scale and pace. Whereas there is always scope for more activity, industry is currently contributing in a variety of ways. Examples include pharmaceutical companies donating existing compounds to assess their utility in the fight against COVID- 19; screening existing compound libraries in-house or with partners to see if they can be repurposed; accelerating trials for potentially effective medicine or vaccine candidates; and in some cases rapidly accelerating in-house research and development to discover new treatments or vaccine agents and develop diagnostics tests.3,4 Pharmaceutical companies are collaborating with each other in some of these efforts and participating in global R&D partnerships (such as the Innovative Medicines Initiative effort to accel- erate the development of potential therapies for COVID-19) and supporting national efforts to expand diagnosis and testing capacity and ensure affordable and ready access to potential solutions.3,5,6

The primary purpose of such innovation is to benefit patients and wider population health. Although there are also reputational benefits from involvement that can be realised across the industry, there are likely to be relatively few companies that are ‘commercial’ winners. Those who might gain substantial revenues will be under pressure not to be seen as profiting from the pandemic. In the United Kingdom for example, GSK has stated that it does not expect to profit from its COVID-19 related activities and that any gains will be invested in supporting research and long-term pandemic preparedness, as well as in developing products that would be affordable in the world’s poorest countries.7 Similarly, in the United States AbbVie has waived intellectual property rights for an existing combination product that is being tested for therapeutic potential against COVID-19, which would support affordability and allow for a supply of generics.8,9 Johnson & Johnson has stated that its potential vaccine – which is expected to begin trials – will be available on a not-for-profit basis during the pandemic.10

Synthetic biology has grown exponentially in less than a decade, with CRISPR gene-editing as the key technology driving this through its use in areas like cancer, infectious diseases, and rare, undertreated indications.

It’s a multidisciplinary approach, often termed ‘synbio’, that involves redesigning organisms – including through ‘plug and play’ combinations of pathways for drug design and development – where with artificial intelligence (AI) increasingly plays a central role.

When it comes to assessing the strength of , observers tend to rely on comparisons to recent history. For example, Americans recently saw 27 consecutive months of unemployment below 4% — a streak unseen in the United States . Similarly, 2023 was arguably the best year for U.S. job creation . But there’s also an international dimension to this. In January, The Washington Post that Americans were experiencing “the world’s best recovery,” which was “outperforming all of its major trading partners.” Around the same time, an Axios similarly noted, “The United States economy grew faster than any other large advanced economy last year — by a wide margin — and is on track to do so again in 2024.” The article added that Americans were winning the post-pandemic global economic “war.” As 2024 approaches the halfway point, the assessments haven’t changed at all. The World Bank this week not only noted that the Biden-era economy is the world’s strongest, it also concluded that the global economy is in better shape . “Globally, overall things are better today than they were just four or five months ago,” Indermit Gill, the World Bank’s chief economist said. “A big part of this has to do with the resilience of the U.S. economy.” Gill’s report further credited “U.S. dynamism” with helping stabilize the economies abroad. A Washington Post added, “The United States is the only advanced economy growing significantly faster than the bank anticipated at the start of the year.”

Growth in the US economy continues to come in above expectations, despite elevated interest rates, weakness in other major economies, and the drawdown of excess savings. Although real GDP growth slowed in the first quarter of this year, it is looking increasingly as though policymakers have managed to avoid a recession, all while bringing down inflation closer to the 2% target. Deloitte’s baseline scenario is still positive in the near term. Consumer spending is expected to remain strong for the first half of 2024 due to sustained improvements in the labor market and stable levels of spending by the business and government sectors. These factors are projected to support real GDP growth this year. While Deloitte’s baseline forecast remains hopeful, we have once again included a scenario that is more optimistic than our baseline—one where labor productivity gains surpass baseline expectations, and structural changes to the labor market occur in the longer term. However, economists are often skeptical of embracing pure optimism. We have therefore developed a scenario highlighting the short-to-medium-term downside risks still clouding the outlook. In this scenario, continued geopolitical conflicts and trade actions cause inflation to stay higher for longer, driving the Federal Reserve to hike rates.

One might argue that dominant US firms are no longer young. In addition, the US technology giants have bought many companies created elsewhere. Yet that is surely one of their strengths.

Moreover, the US continues to lead in venture capital. According to Dealroom, venture capital investment totalled $487bn from 2018 to the first quarter of 2021 in the US, against $379bn from all of China, UK, India, Germany, France, Canada, Israel and Singapore. Even as a ratio to GDP, US investment only came behind Israel and Singapore. In international patent filings, China was first in 2019, with 59,045 versus 57,705 by the US. But the rest of the top 10 countries were US allies. Combined with the US, their patent filings were almost 175,000.