Information Technology and the Distribution of Inventive Activity
We examine the relationship between the diffusion of advanced internet technology and the geographic concentration of invention, as measured by patents. First, we show that patenting became more concentrated from the early 1990s to the early 2000s and, similarly, that counties that were leaders in patenting in the early 1990s produced relatively more patents by the early 2000s. Second, we compare the extent of invention in counties that were leaders in internet adoption to those that were not. We see little difference in the growth rate of patenting between leaders and laggards in internet adoption, on average. However, we find that the rate of patent growth was faster among counties who were not leaders in patenting in the early 1990s but were leaders in internet adoption by 2000, suggesting that the internet helped stem the trend towards more geographic concentration. We show that these results are largely driven by patents filed by distant collaborators rather than non-collaborative patents or patents by non-distant collaborators, suggesting low cost long-distance digital communication as a potential mechanism.
We thank Adam Jaffe, Ben Jones, Scott Stern, and participants at the pre-conference and conference for helpful comments and suggestions. We thank Yasin Ozcan for outstanding research assistance. We also thank Harte Hanks Market Intelligence for supplying data. All opinions and errors are ours alone. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Avi Goldfarb has between $5,000 and $10,000 in equity in several publicly traded technology companies as part of a broad investment portfolio.
Information Technology and the Distribution of Inventive Activity, Chris Forman, Avi Goldfarb, Shane Greenstein. in The Changing Frontier: Rethinking Science and Innovation Policy, Jaffe and Jones. 2015