As we saw yesterday, Michael Mandel argues that commercial innovation in the U.S. has slowed in recent years. To shed light on this, my team and I tracked U.S. patent data for the past decade – and for the entire 20th century.
The first graph above tracks patent applications and patents granted from 1980 to 2005. Overall, the trend-lines are up. The line is steeper for patent applications, but it also tracks consistently upward for actual patents granted. There are significant dips after the tech-crunch of 2001 and in the wake of the financial bubble, even before the economic crisis of 2008. But those dips do little to throw off the basic upward trajectory of American innovation. In 2007, the overall level of patents granted was significantly higher than a decade earlier.
The second graph below controls for population, tracking the trend in patents per 10,000 residents. The trend-lines tell much the same story. Despite two recent dips, the overall trend in patenting is up considerably over the past decade.
The evidence here does not support the notion of an innovation shortfall. The overall level of innovation is up over the past decade. The most we can say is that the rate of innovation has leveled off in recent years when we control for population. Nonetheless, the trajectory of American innovation remains consistently up.
As we will see tomorrow, the picture gets a bit more complicated when we parse patents by U.S.-born (resident) and foreign (non-resident) inventors.
July 15th, 2009 at 4:42 pm
Maybe this is just semantics, but aren’t patents issued for “inventions” rather than innovations? The innovation lies in doing something with the patented product.
From the discussions on this blog this week, it seems a challenge of late has been obtaining funding (capital) to do something innovative with a new invention — like mass produce it as a consumer item.
Think about Research in Motion and the Blackberry. They had to settle a lawsuit with someone who apparently patented the concept of a tiny keyboard on a cel-phone, but who never actually produced the product. RIM was the innovator (and arguably the inventor as well since I don’t think they borrowed anything from the unknown patent holder).
Is there any way to track how many patents become viable innovations?
Maybe that number has declined and many people and corporations are securing patents to block competitors or to “get rich quick” off others’ efforts (as I would argue happened in the case of the Blackberry controversy).
July 15th, 2009 at 5:32 pm
Yea like the patent of human DNA genes, what is going on here
July 15th, 2009 at 7:10 pm
I agree with Wendy. I think this misses Mandel’s point. The innovation-based argument for economic development is solid, and we are getting better at measuring and tracking innovation. We are even doing a fairly decent job getting this message across to state and local economic developers. The missing link now is to make a compelling case that innovation metrics, such as patents, can tell us something meaningful about outcomes: stronger economies, more competitive regions, higher standards of living, etc. I think we’re falling short on that front.
July 15th, 2009 at 9:02 pm
NESTA in the UK has proposed new approaches to measuring innovation beyond patent applications. They speak about “hidden innovation” that occurs in every sector but is not captured by patent applications. Take a look at their report here:
http://www.nesta.org.uk/hidden-innovation-report/
However we do need to keep measuring patents. We have historic data and it is an accepted measure of innovation activity.
July 16th, 2009 at 4:16 am
Patent applications are also skewed by “defensive” patents. Some corporations attempt to patent everything they do so as to defend themselves against RIM-type law suits. These patents add nothing to innovation. Meanwhile other highly useful innovations, such as the “mute” button on a TV remote control, appear not to be patented (and are now not patentable).
July 16th, 2009 at 3:45 pm
I do not believe that Patents are a good proxy for innovation. The Patent system is currently in a bubble; companies are seeking more patents simply because everyone else is. You have to patent to defend yourself and be part of the game.
Software patents are the most egregious example, in my opinion. I have two software patents that I consider to be lame ideas, but my employer nevertheless invested a lot of time and legal fees in getting them patented, presumably to add to its arsenal.
The patent system is dysfunctional, and academic research that relies on counting patents is extremely dubious.
July 17th, 2009 at 9:45 am
[...] EDTThe New Geography of American Innovation The past couple of days, I’ve looked at the trends in overall patents and nationality of inventor. Today I turn to the regional distribution of innovation across U.S. [...]
July 18th, 2009 at 11:38 pm
okay, so i haven’t read all of these pieces just yet, but do we necessarily need an academic study to demonstrate something like racism breeding inequality?
actually, i appreciate this post, btw.
if a society values quick fixes and short term “solutions” to “problems” due to systemic factors, then it won’t be too surprising that innovation would decline.
i wrote a piece recently about an example of u.s. decline in creativity when examining electronic dance music’s decline here, as innovations and technology use has risen in europe. i believe i posted this here months ago, focused on the issue of creativity in the united states and how it clearly is in decline and worsening as a result of high cost of living in its so-called most “creative” cities, which cater primarily to established creative types and not developing ones who tend to have the most unique ideas and approaches.
if the emphasis is mostly on “the bottom line,” then creativity can easily be stifled, because while the concept of “creativity” may be utilized to solve problems a business faces, on the other hand a powerful institution will also be VERY upset or not accepting, if a “creative” idea contradicts the status quo of dominant industry, of which the U.S. has had a major claim to (like say GM rejecting “green” technology).
in a so-called “creative” city like new york, the cost of living is so high that many businesses cannot “afford” to take risks on new ideas or creative workers with such ideas/work that have not “proven” successful…they are “too big to fail” (like say why hollywood films seem to have been increasingly ridiculed as even more so market based “consumable entertainment” versus unique art that can be “entertaining” and even enlightening), so the opportunities disappear.
therefore it is little wonder why the u.s. is and will continue at the current rate to fall behind other nations without such significant obstacles in the area of creativity.
July 18th, 2009 at 11:44 pm
i will also attest as a native new yorker that the inability for less well off individuals, native or otherwise (see ‘Man Push Cart’) to last long here, with hope of “success,” ruins all sorts of chances of new york being a “true” hub of true unique creativity.
instead nyc, imho, is either a place to list on the life or work resume of people (”when i was X i lived in nyc for X years”), or to take over and destroy competition to prove (mostly to oneself) one’s mastery of whatever field one works in.