Category Archives: Intellectual Property

Why Immigration Drives Innovation

Economic history reveals one unmistakable psychological pattern.
By Joseph Henrich – When President Coolidge signed the Johnson-Reed Act into law in 1924, he drained the well-spring of American ingenuity. The new policy sought to restore the ethnic homogeneity of 1890 America by tightening the 1921 immigration quotas. As a result, immigration from eastern Europe and Italy plummeted, and Asian immigrants were banned. Assessing the law’s impact, the economists Petra Moser and Shmuel San show how this steep and selective cut in immigration stymied U.S. innovation across a swath of scientific fields, including radio waves, radiation and polymers—all fields in which Eastern European immigrants had made contributions prior to 1924. Not only did patenting drop by two-thirds across 36 scientific domains, but U.S-born researchers became less creative as well, experiencing a 62% decline in their own patenting. American scientists lost the insights, ideas and fresh perspectives that inevitably flow in with immigrants.

Before this, from 1850 to 1920, American innovation and economic growth had been fueled by immigration. The 1899 inflow included a large fraction of groups that were later deemed “undesirable”: e.g., 26% Italians, 12% “Hebrews,” and 9% “Poles.” Taking advantage of the randomness provided by expanding railroad networks and changing circumstances in Europe, a trio of economists—Sandra Sequeira, Nathan Nunn and Nancy Qian–demonstrate that counties that ended up with more immigrants subsequently innovated more rapidly and earned higher incomes, both in the short-term and today. The telephone, hot blast furnace, screw propeller, flashlight and ironclad ship were all pioneered by immigrants. The analysis also suggests that immigrants made native-born Americans more creative. Nikola Tesla, a Serbian who grew up in the Austrian Empire, provided George Westinghouse, a New Yorker whose parents had migrated from Westphalia, with a key missing component for his system of electrification based on AC current (Tesla also patented 100s of other inventions).

In ending the quotas imposed under the Harding-Coolidge administration, President Johnson remarked in 1964 that “Today, with my signature, this system is abolished…Men of needed skill and talent were denied entrance because they came from southern or eastern Europe or from one of the developing continents…” By the mid-1970s, U.S innovation was again powerfully fueled by immigrants, now coming from places like Mexico, China, India, Philippines and Vietnam. From 1975 to 2010, an additional 10,000 immigrants generated 22% more patents every five years. Again, not only did immigrants innovate, they also stoked the creative energies of the locals. more>

Why Some Counties Are Powerhouses For Innovation

By Christopher Boone – By my analysis of data from the U.S. Patent Office, Santa Clara County, California, is sprinting ahead of the country. Between 2000 and 2015, more than 140,000 patents were granted in Santa Clara County. That’s triple the number for second-ranked San Diego County.

Four other counties in California – Los Angeles, San Mateo, Alameda and Orange – make the top 10.

These counties are in large metropolitan areas that are known as technology and innovation centers, including San Francisco, San Diego, Boston and Seattle. The other metro areas in the top 10, not the usual tech-hub suspects, are Greater Los Angeles, Detroit and Phoenix.

Besides large concentrated populations, these metro areas share two other ingredients that support innovation. All of them have one or more leading research universities and a large proportion of college-educated people.

Santa Clara County is home to Stanford University, an institution that has become synonymous with the high-tech and innovation economy of Silicon Valley.

Stanford’s rise as a world-class research university coincided with a rapid increase in federal and military spending during the Cold War. The university’s suburban location gave it an advantage, too, by providing land for expansion and for burgeoning high-tech companies. Stanford’s leadership aggressively courted research opportunities aligned with the priorities of the military-industrial complex, including electronics, computing and aerospace.

Another common trait about most of these centers of innovation is the jaw-dropping cost of housing.

Competition for higher-wage talent pushes up housing and other costs in these innovation centers. Although housing prices increased in greater Boston, Phoenix and Detroit, they remained relative bargains compared to the West Coast.

In my view, one way to unleash innovation would be to tap into the rich diversity of students, faculty and communities at two- and four-year colleges beyond the typical top 100 research institutes. more>

American power at stake in great innovation race


By Peter Engelke – Americans like to think of themselves as the most innovative people in the world. At least since 1945, they have had good reason to believe so. During the Cold War, the United States built the most formidable technology-producing innovation system the world has ever seen.

Coordinated action by the U.S. government, the private sector and academia, combined with America’s unique postwar culture, crafted this system.

But the American system has seen better days. America’s leaders, at federal and state levels, have failed to maintain this system much less upgrade it.

As a result, America’s long list of difficulties includes falling public investment in research and development (R&D, a critical and under-appreciated factor in national innovativeness), an under-skilled workforce, flagging support for public higher education, decaying infrastructure and much more.

The global tech-innovation economy therefore is more than a just crowded place. It is also crowded where it counts: at the very top, where it no longer can be said that the U.S. stands alone. Several of the countries listed here, plus others, routinely score higher than the United States in global innovation rankings.

The U.S. will not long remain the global leader in innovation unless it takes decisive action across several fronts. more>

Enlightenment rationality is not enough: we need a new Romanticism | Aeon Ideas

BOOK REVIEW

Enlightenment Now, Author: Steven Pinker.
Modern Prometheus: Editing the Human Genome with Crispr-Cas9, Author: Jim Kozubek.
The Will to Knowledge, Author: Michel Foucault.

By Jim Kozubek – Progress creates the illusion that we are moving toward deeper knowledge when, in fact, imperfect theories constantly lead us astray.

The conflict is relevant in this age of anti-science, with far-Right activists questioning climate change, evolution and other current finds. But is that really bad? Nineteenth-century Romanticism was the first movement to take on the Enlightenment – and we still see its effects in such areas as environmentalism, asceticism and the ethical exercise of conscience.

In our new era of Enlightenment, we need Romanticism again.

With science becoming a brutal game of market forces and patent controls, the skeptics and Romantics among us must weigh in, and we already are. In one study that provides free genome sequencing for newborns, only 7 per cent of parents wanted to take part, suggesting that the public is cautious about how data might be abused by insurers, business and government.

Pinker’s solution to the distortion is investing science with secular humanism, an elastic concept of goodness that plies against financial pressures. But can we depend on technologists for such a benevolent spirit?

Right now, in biotech, only the market rules.

Modern-day Romantics have a right to be concerned about the motives of scientists, if not of science itself. more>

Eleven facts about innovation and patents

By Jay Shambaugh, Ryan Nunn, and Becca Portman – It is difficult to overstate the importance of technological progress for living standards. Consider the example of Argentina and Austria, as shown in figure A. These countries have roughly the same level of per capita inputs (labor and capital), but there is a vast gulf between them in economic output: Austria’s per capita income is more than double Argentina’s.

Labor and capital play vital roles in generating economic output and helping to explain differences in national incomes, but large disparities in per capita national income—in other words, national living standards—are due to the various ways that economies use their resources, and not just to the quantities of resources available.

In the language of growth accounting, total factor productivity (TFP) is the measure of how effective an economy is at producing economic output with a given amount of inputs. Across developed and developing economies, the majority of per capita income differences are due to total factor productivity variation (Hall and Jones 1999; Klenow and Rodríguez-Clare 1997).

In other words, most of per capita income differences are not explained by differences in available capital and labor. Moreover, sustained growth over time in per capita incomes requires growth in TFP (Solow 1957). Without technological progress, increases in labor and capital have a bounded potential to raise per capita income. more>

Intellectual property for the twenty-first-century economy

By Joseph E. Stiglitz, Dean Baker and Arjun Jayadev – The central problem is that knowledge is a (global) public good, both in the technical sense that the marginal cost of someone using it is zero, and in the more general sense that an increase in knowledge can improve wellbeing globally. Given this, the worry has been that the market will undersupply knowledge, and research will not be adequately incentivized.

There are at least three alternatives for financing and incentivizing research. One is to rely on centralized mechanisms of direct support for research, such as the National Institutes of Health and the National Science Foundation in the United States. Another is to decentralize direct funding through, say, tax credits. Or a governmental body, private foundation, or research institution can award prizes for successful innovations (or other creative activity).

The patent system can be thought of as awarding a prize. But the prize impedes the flow of knowledge, reduces the benefits derived from it, and distorts the economy. By contrast, the final alternative to this system maximizes the flow of knowledge, by maintaining a creative commons, exemplified by open-source software. more> https://goo.gl/DkdRBs

How do companies come up with new ideas?


By Scott Andes – Most people interested in technology development are familiar with the classic model of innovation.

Here, firms put new ideas into practice in a pretty regimented way. First, scientists at national laboratories or universities are funded (often by federal science agencies) to conduct basic research and make discoveries. The institution then patents these discoveries and makes them accessible to the private sector for a fee.

In the classic model there are “producers” of technology (universities and labs) and “consumers” (firms), and the transaction between the two occurs through the market (patents and licenses).

The classic model applies well in some industries, but it doesn’t fit how many companies come upon new ideas.

Cities have different economic strengths and weaknesses based on their mix of industries. Some are information-technology centers like Seattle [2, 3] and San Francisco [2, 3], while others are life science powerhouses like San Diego [2, 3, 4, 5] and Boston [2, 3, 4]. Others lead in advanced manufacturing like Akron [2], Portland [2, 3], and Pittsburgh [2, 3].

Cities should consider which innovation model best fits their industries and craft urban economic policy around their particular model.

Here are six strategies for doing so .. more> http://goo.gl/wSJwgS

Handy Tools for New Thinking

By Lindsay Hock – The foundational knowledge engineers need to succeed evolves slowly, but the applied science and data they need to access on a day-to-day basis changes constantly.

How engineers find and assimilate knowledge, as well as how they model problems around those data, has evolved to employ more computationally intensive techniques.

Digitization and indexing of information has democratized broader classes of information, enabling engineers to identify useful trends without having to read through text.

“The ability to carry your research platform from one location to another, without discontinuity in your thought process, helps accelerate problem resolution,” says Knovel. more> http://tinyurl.com/phjehot

Updates from Chicago Booth

Welcome to Nerdopolis
By Amy Merrick, Natasha Gural – With about 400,000 residents, Zurich [2] is a global financial center, but its real economic might also comes from cutting-edge industries beyond finance.

Zurich has Google’s largest engineering office in Europe (dubbed “the real Mountain View” for the panoramic vistas visible from its windows) and two of the world’s top universities.

Switzerland ranks among the global leaders in patent applications per capita and percentage of its gross domestic product spent on research. Zurich’s GDP per capita is $82,000, more than any other city worldwide, according to the Brookings Institution.

All this makes Zurich a magnet for brainpower—a Nerdopolis. more> http://tinyurl.com/nbh6yv5

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If you believe enough, can you invalidate a patent? Supreme Court to decide

By Joe Mullin – The issue that has the high court’s attention in Commil v. Cisco is how a defendant should be allowed to defend itself from accusations of infringement.

Cisco says, essentially, that when it comes to proving secondhand infringement, intent matters. It should have been allowed to present evidence that showed it had a “good-faith belief of invalidity” to the jury, which the trial judge prevented it from doing.

“If the Federal Circuit opinion stands, every accused inducer will argue to the jury that even if that patent is valid, it cannot be found liable because it thought the patent was invalid,” state Commil lawyers. more> http://tinyurl.com/naowms3

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