As Patenting Soars to Historic Rates, the Most Inventive Metropolitan Areas are Leaving Others Behind

After three decades of growth, the patenting rate is near a historic high not seen since the Industrial Revolution, according to a new report released today by the Brookings Institution Metropolitan Policy Program. Patents are a major contributor to regional economic growth; yet, 92 percent of all U.S. patents are invented in just 100 of the nation’s roughly 360 metropolitan areas—home to 59 percent of residents.

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Brookings report identifies most and least inventive metro areas; San Jose, CA and Burlington, VT lead the way

Washington, D.C. (PRWEB) February 01, 2013

After three decades of growth, the patenting rate is near a historic high not seen since the Industrial Revolution, according to a new report released today by the Brookings Institution Metropolitan Policy Program. Patents are a major contributor to regional economic growth; yet, 92 percent of all U.S. patents are invented in just 100 of the nation’s roughly 360 metropolitan areas—home to 59 percent of residents.

“Patenting Prosperity: Invention and Economic Performance in the United States and its Metropolitan Areas” is the first analysis of its kind to present patenting trends on a regional level from 1980 to 2012. The report ranks all of the nation’s roughly 360 metropolitan areas on patenting levels and growth, while noting the firms and organizations responsible. It also analyzes how patenting has affected productivity levels in each region, comparing patents—which embody novel inventions—to other sources of economic dynamism, such as educational attainment.

The report is co-authored by Jonathan Rothwell, Brookings associate fellow, Mark Muro, Brookings senior fellow, Deborah Strumsky, assistant professor, The University of North Carolina at Charlotte, and Jose Lobo, Research Faculty, School of Sustainability, Arizona State University.

Overall, the innovative strength of the United States is still relatively high in some key areas but weak elsewhere. Other countries are surging ahead as global competition ramps up and R&D becomes more expensive and complex. Jonathan Rothwell, Brookings associate fellow and lead author of the report, stated, “While R&D spending per capita is second in the world and U.S. universities are dominant, the United States ranks 9th on patents per capita and just 24th on the share of its young-adult population graduating with four-year degrees in STEM fields” (referring to science, technology, engineering, and mathematics).

Meanwhile, metropolitan area performance is widely varied. Per person, the leading metro areas are San Jose, CA; Burlington, VT; Rochester, MN; Corvallis, OR; and Boulder, CO. Other highly inventive metro areas are scattered across the country, especially near universities with leading science research programs and metropolitan areas with high concentrations of degree holders in STEM fields. These high patenting rates help grow and sustain highly productive economies. By contrast, there a large number of low-productivity and low-patenting metropolitan areas like McAllen, TX; Youngstown, OH; Charleston, SC; and Fresno, CA. A resident of San Jose is 600 times more likely to be a patent inventor than a resident of McAllen.

“Metropolitan areas play a critically important role in invention,” said Rothwell. “They facilitate specialization, collaboration, and the sharing of suppliers, customers, and regional assets. Those assets, however, like leading research universities, are not evenly distributed across regions.”

In the last thirty years, the most patent-inventive metros saw some of the highest increases in GDP per worker, a measure of living standards. For example, San Jose, CA had the fastest productivity growth over the period 1980 to 2010 and the largest increase in patenting per capita. Other metropolitan areas with large increases in patenting also experienced large productivity gains, including Boulder, CO; Raleigh, NC; and Portland and Corvallis, both in Oregon. Though not immune to recession, metro areas with high patenting growth also enjoyed low average levels of unemployment over recent decades. Boise, ID; Provo, UT; Austin, TX; and Tucson, AZ had rapid patent growth and average unemployment rates under 5 percent from 1990 to 2010.

The patent system has come under considerable criticism of late, but various quality indicators suggest that valuable inventions are still being patented and patent-intensive industries are becoming more competitive. Moreover, the report notes that there are more scientists working today, as a share of all workers, than ever before, and R&D spending per capita is at an all time high, even as the federal share of R&D spending has fallen and R&D as a share of GDP has not increased.

The strongest growth rates in patenting took place in the information and communications industries followed by computer software and semiconductor devices, but patenting is also common in advanced manufacturing industries like aerospace, autos, and biotech.

Despite the patent system’s significant contribution to economic growth, the report calls for targeted reforms. For example, one of the most pressing issues is the abuse of litigation from firms (called “trolls”) that buy patents just to sue other companies: “Companies that make most of their profits from litigation rather than sales should face additional scrutiny before they are allowed to threaten other businesses with infringement suits,” Rothwell stated.

Public policy also has an important role in supporting R&D. The report finds that patents funded by U.S. government agencies tend to be of especially high quality, regardless if the research is conducted by universities or corporations. Federal investments in innovative small businesses have also fueled metropolitan productivity growth.

For these and other reasons, federal support of innovation must continue to grow, the authors argue, even as budget pressures tighten. Moreover, metropolitan area leaders must tailor their policy interventions and public investments to overcome their specific regional weaknesses. “If we are to maintain our position among the most innovative nations in the world, federal and regional federal policymakers must continue to support R&D funding and investments in innovative capacity,” added Mark Muro, a Brookings senior fellow and report co-author.

The Metropolitan Policy Program at Brookings provides decision-makers with cutting-edge research and policy ideas for improving the health and prosperity of metropolitan areas, including their component cities, suburbs, and rural areas. To learn more, please visit: http://www.brookings.edu/metro. Follow us on Twitter at http://www.twitter.com/brookingsmetro.

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  • Rachel Harvey
    Brookings Institution
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  • Terrance Woodbury
    Brookings Institution
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