Harvard Study Finds Industrial Labs Fueled U.S. Innovation Boom

Research shows how organized corporate R&D reshaped the innovation system in the 20th century, with parallels to today's tech giants.

Published on Feb. 25, 2026

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A new study from Harvard's Growth Lab and the Complexity Science Hub has found that the rise of industrial research labs fundamentally reshaped the U.S. innovation system in the early 20th century. The researchers digitized historical patent data and linked it to census records, revealing how invention shifted from being centered on individual craftsmen to being dominated by professional engineers working in organized teams inside firms. The study suggests today's corporate R&D labs, like those at tech giants, could play a similar transformative role in driving innovation.

Why it matters

This research provides important historical context on how the U.S. innovation system evolved, moving from an agricultural economy to becoming a global leader in science and technology. The findings highlight how organized corporate research can spur radical breakthroughs, but also raise questions about the participation of women and immigrants, as well as the geographic concentration of innovation.

The details

The researchers digitized roughly 500,000 pages of historical patent yearbooks covering 1.6 million patents, and linked this data to census records and surveys of industrial research laboratories. This allowed them to track changes in inventors' occupations, collaborations, organizational affiliations, and the technological novelty of patents over time. They found that in the 1920s, there was a precipitous take-off of inventions combining radically new technologies, as well as a rapid rise of engineers, greater reliance on academic literature, and the emergence of academic patenting. At the organizational level, there was a shift to teamwork coordinated through firms and labs rather than family ties. Geographically, invention became more concentrated in large cities, especially on the East Coast and in the Rust Belt, with lower participation from women and foreign-born inventors.

  • The 1920s mark a precipitous take-off of inventions that list radically new combinations of technologies.
  • Over the last decade, there has been a revival of R&D labs driven by tech giants like Google, Facebook, and Amazon.

The players

Harvard Growth Lab

A research center at the Harvard Kennedy School that pushes the frontiers of economic growth and development policy research, collaborates with policymakers, and shares insights through teaching, tools, and publications.

Complexity Science Hub

An organization that addresses societal challenges by extracting meaning from large datasets representing the economy, human migration, health, climate, social values, urban development, and more.

Ricardo Hausmann

Co-author of the study, director of the Harvard Growth Lab, and professor at the Harvard Kennedy School.

Matte Hartog

Co-author of the study and researcher at the Growth Lab.

Frank Neffke

Co-author of the study, professor of Economic Transformation and Complexity at the Interdisciplinary Transformation University Austria, and researcher at the Complexity Science Hub.

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What they’re saying

“The nature of invention changed substantially, and patents increasingly combined more and newer technologies. The innovation system was transformed from one centered on craftsmen, laborers, and family ties, to one dominated by professional engineers working in organized teams inside firms.”

— Ricardo Hausmann, Co-author, director of the Harvard Growth Lab, and professor at the Harvard Kennedy School (Mirage News)

“These data are incredibly rich and provide a new quantitative lens on a tremendously important episode in U.S. history.”

— Matte Hartog, Co-author and researcher at the Growth Lab (Mirage News)

“Over the last decade, we have seen a revival of R&D labs driven by tech giants, like Google, Facebook, and Amazon. As in much of the 20th century, when behemoths like Bell Labs not only patented, but also pushed the scientific frontier, spawning several Nobel prize winners, important breakthroughs in AI are nowadays driven by industrial, not academic labs.”

— Frank Neffke, Co-author and Professor of Economic Transformation and Complexity at the Interdisciplinary Transformation University Austria (Mirage News)

What’s next

The researchers propose future examination of whether today's organized corporate research once again promotes radical versus incremental innovation, to what extent women and immigrants participate, and how it may change the geographic concentration of innovation.

The takeaway

This study provides valuable historical context on how the U.S. innovation system evolved, shifting from individual craftsmen to organized corporate R&D teams. The findings suggest today's tech giants could play a similarly transformative role, but also raise important questions about the inclusivity and geographic distribution of innovation that will require further study.