Philippe Aghion, Ufuk Akcigit, Ari Hyytinen, Otto Toivanen, 23 December 2017

Innovation is a crucial element of modern societies, but who becomes an inventor? This column shows that parental income affects the probability of someone becoming an inventor, but that this impact is greatly diminished once parents’ socioeconomic status, parents’ education, and the individual's IQ are controlled for. Overall, the results suggest a prominent role for parental education and for IQ in explaining an individual’s probability of inventing.

Katja Mann, Lukas Püttmann, 07 December 2017

Researchers disagree over whether automation is creating or destroying jobs. This column introduces a new indicator of automation constructed by applying a machine learning algorithm to classify patents, and uses the result to investigate which US regions and industries are most exposed to automation. This indicator suggests that automation has created more jobs in the US than it has destroyed.

Monika Schnitzer, Martin Watzinger, 31 October 2017

Conventional wisdom holds that venture capital-financed start-up companies generate positive spillovers for other businesses, but these spillovers are hard to measure accurately. This column uses a broader analysis of patent spillovers than previous studies to argue that venture capital-financed start-up companies help established companies innovate, and play a significant role in the commercialisation of new technologies. This suggests that subsidies for venture capital investment should be at least as large as current R&D subsidies.

Mark Schankerman, Florian Schuett, 27 October 2017

Critics of the patent system argue that ineffective patent office screening is posing an impediment to innovation. This column develops a model to examine the effect of examination, fees, and court litigation on patent quality. Results show that frontloading fees (i.e. higher fees for application versus approval), capping litigation costs, and intensifying patent office examination all lead to increases in social welfare. Simulations calibrated with existing data suggest that about 65-85% of granted patents are invalid.

Kenta Ikeuchi, Kazuyuki Motohashi, Ryuichi Tamura, Naotoshi Tsukada, 28 June 2017

There is growing interest in measuring the scientific aspects of industrial innovation and performance to understand the economic impact of publicly funded R&D. This column presents new indicators for science-industry linkages in Japan based on a novel dataset combining academic research paper data, patent data, and economic census data. It finds that the academic sector is getting more involved in patenting activities, and that scientific knowledge generated in the sector is being utilised not only in science-based industries, but also in many others.

Hidemichi Fujii, Shunsuke Managi, 16 June 2017

Patent applications are a good indicator of the nature of technological progress. This column compares trends in applications for artificial intelligence patents in Japan and the US. One finding is that the Japanese market appears to be less attractive for artificial intelligence technology application, perhaps due to its stricter regulations on the collection and use of data.

Ufuk Akcigit, John Grigsby, Tom Nicholas, 27 March 2017

The impact of immigration on US economic development has become a controversial issue in recent policy debates. This column, arising from a study linking Federal Census data with patent records, examines the historical role of immigrant inventors in the process of US technological innovation. Immigrant inventors appear to have been of central importance to American innovation during the 19th and 20th centuries, both through their own inventive activity and through their influence on domestic inventors.

William Maloney, Felipe Valencia Caicedo, 24 March 2017

The generation and diffusion of scientific knowledge and technology are assumed to be drivers of modern economic growth, but there is a lack of firm empirical evidence of this. This column uses the first detailed data on the density of engineers in the western hemisphere to argue that historical differences in innovative capacity, as captured by the density of engineers in 1880, explain a significant fraction of the Great Divergence. The results confirm the imperative of developing higher-order human capital.

David Autor, David Dorn, Gordon Hanson, Gary P. Pisano, Pian Shu, 20 March 2017

The discussion of the decline in US manufacturing during the 2016 presidential election campaign largely focused on job losses. This column examines the effects of Chinese import competition on another metric for the health of the US manufacturing sector – innovation.  Firms whose industries were exposed to a greater surge of Chinese import competition from 1991 to 2007 experienced a significant decline in their patent output as well as their R&D expenditures. While politicians’ ‘obsession’ with manufacturing is primarily due to job losses, an accompanying reduction in innovation may well affect economic growth in the longer term.

Martin Watzinger, Thomas Fackler, Markus Nagler, Monika Schnitzer, 19 February 2017

There is growing concern that dominant companies use patents strategically to keep competitors from entering their market. This column uses the landmark 1956 Consent Decree against Bell Labs to explore whether antitrust enforcement is an effective remedy to the problem. Results show that patents can indeed be used as an entry barrier for start-up firms, and that the compulsory licensing of patents can foster market entry and innovation. However, compulsory licensing is found to be ineffective in markets where dominant firms have other means of market foreclosure.

Daron Acemoğlu, Ufuk Akcigit, William Kerr, 20 January 2017

Innovation is typically seen as a cumulative process, with new technologies building on existing knowledge - but our knowledge of how progress in a specific area is influenced by knowledge in other, ‘upstream’ areas is limited. Using US patent data, this column identifies a stable ‘innovation network’ that serves as a conduit for cumulative knowledge development. Technological advances in one field can advance progress in multiple neighbouring fields, but will have a stronger influence on more closely related areas.

Monika Schnitzer, 30 September 2016

How do patents affect innovation? In this video, Monika Schnitzer uses the example of Bell labs to explain how compulsory licensing leads to more innovation. This video was recorded during the European Economic Association's Congress held in Geneva at the end of August 2016. 

Daron Acemoğlu, Jacob Moscona, James Robinson, 27 June 2016

The ‘great inventions’ view of productivity growth ascribes the excellent growth from 1920 to 1970 in the US to a handful of advances, and suggests that today poor productivity performance is driven by a lack of breakthrough discoveries. This column argues instead that the development of an effective governmental infrastructure in the 19th century accounted for a major part of US technological progress and prominence in this period. Infrastructure design thus appears to have the power to reinvigorate technological progress.

Ross Levine, Chen Lin, Lai Wei, 27 May 2016

Economic theory offers conflicting perspectives on the relationship between insider trading and innovation. To date, the empirical evidence is similarly inconclusive. This column exploits the staggered enforcement of inside trading laws across countries to explore the effect on patenting behaviour. The findings point to a robust positive effect of enforcement on various measures of patenting behaviour. Legal systems that protect outside investors from corporate insiders thus help to foster innovation. 

Bronwyn Hall, Christian Helmers, Georg von Graevenitz, 23 April 2016

Patent filings have proliferated globally in recent years. While some may see this as a direct consequence of increased innovation, this column uses evidence from the UK to show that patent thickets – patents belonging to many companies protecting overlapping technology – reduce innovation. Patent thickets decrease entry (i.e. first time patenting in an area) by 20%, which is substantial bearing in mind that the average probability of entry into a technology area is only about 1.5%.

Nobuaki Hamaguchi, Keisuke Kondo, 07 February 2016

There is no consensus on the effects of agglomeration on innovation. This column presents new evidence on how knowledge turnover impacts the quality of innovation. Agglomerated regions with active knowledge turnover, as measured by interregional migration of university graduates, tend to have a higher number of patent citations, the metric used for quality of innovation. Cluster policy aimed at active innovation may not be effective if interregional migration of knowledge workers is inactive.

Alberto Galasso, Mark Schankerman, 07 January 2016

Economists take a keen interest in patent rights and their effect on innovation. The primary argument for the existence of patents is, after all, that they incentivise entrepreneurs to seek profit through innovating. This column looks at how patent rights affect innovation by small and large firms, finding that the results vary greatly depending on size. 

Sari Pekkala Kerr, William Kerr, 12 December 2015

The globalisation of innovation is proceeding at a fast pace. This column argues that the ethnic composition of a firm’s US-based inventive work force is an important factor in whether the firm engages in international collaborations. Collaborative patents are often utilised when a US public company is entering into a new foreign region for innovative work. This is especially notable in markets with weak intellectual property protections.

Hiroyasu Inoue, Kentaro Nakajima, Yukiko Saito, 11 February 2015

Despite vast improvements in information and communications technology, the tendency of firms in related industries to cluster together hardly changed between 1985 and 2005. This column examines the relationship between geographic clustering and innovation using establishment-level data from Japan. Research establishments – especially those in high-technology industries – are more localised than average. The degree of localisation is greater when establishments are weighted by their creativity, as measured by the number of patents created and the number of citations received.

Iain Cockburn, Jean Lanjouw, Mark Schankerman, 22 November 2014

Patented pharmaceuticals diffuse across international borders slowly, and sometimes not at all. This column analyses the effect of patent protection and price regulation on the speed of and extent to which drugs enter new markets. There is a fundamental tradeoff between affordability – taking the form of low patent protection and strong price regulation – and rate of entry into a national market.

Pages

Events

CEPR Policy Research