The Patent Economy
July 25, 2013
July 25, 2013
With D.C. hotly debating what’s required for the next phase of U.S. economic growth this week, we were reminded of the excellent work of the Metropolitan Policy Program at the Brookings Institute earlier this year, with the publication of “Patenting Prosperity: Invention and Economic Performance in the United States and its Metropolitan Areas” by Jonathan Rothwell, José Lobo, Deborah Strumsky and Mark Muro.
Looking at U.S. patent data from 1980 to 2012, they drew a number of conclusions that show how “inventions, embodied in patents, are a major driver of long-term regional economic performance,” not the least of which is that “patenting is associated with higher productivity growth, lower unemployment rates, and the creation of more publicly-traded companies.” For example, the authors calculated that a low-patenting metro area could gain $4,300 more per worker over a decade’s time, if it became a high-patenting metro area.
Also notable was their research on one of the key measures of inventive activity in the U.S.: patent quality. There is a common theme among critics of the U.S. patent system that the rise in patent applications is contributing to an ever-increasing number of low-quality patents being issued that are in turn clogging U.S. courts and dragging down American innovation.
In fact, this report found that:
That’s not to say the authors did not also point out flaws in the patent economy, and areas we could all improve, but it is still encouraging to see how more data and analysis of this kind can help explain our increasingly “intangible economy.”