We live in an era in which innovation and entrepreneurship seem ubiquitous, particularly in regions like Silicon Valley, Boston, and the Research Triangle Park. But many metrics of economic growth, such as productivity growth and business dynamism, have been at best modest in recent years. The resolution of this apparent paradox is dramatic heterogeneity across sectors, with some industries seeing robust innovation and entrepreneurship and others seeing stagnation. By construction, the impact of innovation and entrepreneurship on overall economic performance is the cumulative impact of their effects on individual sectors. Understanding the potential for growth in the aggregate economy depends, therefore, on understanding the sector-by-sector potential for growth. This insight motivates the twelve studies of different sectors that are presented in this volume. Each study identifies specific productivity improvements enabled by innovation and entrepreneurship, for example as a result of new production technologies, increased competition, or new organizational forms. These twelve studies, along with three synthetic chapters, provide new insights on the sectoral patterns and concentration of the contributions of innovation and entrepreneurship to economic growth.
with Lauren Russell and Lei Yu
Forthcoming, Review of Economics & Statistics
We investigate how establishing a college affects local educational attainment using historical natural experiments in which "runner-up" locations were strongly considered to become college sites but ultimately not chosen for as-good-as-random reasons. While runner-up counties have since had opportunity to establish their own colleges, winners are still more likely to have a college today. Using this variation, we find that winning counties today have college degree attainment rates 58% higher than runner-up counties and have larger shares of employment in high human capital sectors. These effects are not driven primarily by college employees, migration, or local development.
American Economic Journal: Economic Policy, Vol. 15, No. 2, May 2023, pg. 1-41
I use narrative historical data on site selection decisions for a subset of U.S. colleges to identify “runner-up” locations that were strongly considered to become the sites of new colleges. Using runner-up counties as counterfactuals in a difference-in-difference model, I find that establishing a college causes 62% more patents per year. Linking patents to novel college yearbook data reveal that only 12% of patents in a college’s county came from that college’s alumni or faculty. I find only small differences in patenting between establishing colleges and establishing other institutions, as well as between colleges with different focuses on technical fields.
Innovation has long been seen as central to long-term regional growth. Due to the absence of comprehensive data on the geography of innovation covering long time periods quantifying long-term innovation-development linkages has been challenging. We use newly available patent data from the United States coded to consistent geographies over 150 years to document changing patterns in the geography of innovation. Our analysis reveals three findings. First, the high levels of spatial concentration of innovation today are similar to those in the decades after the Civil War. Second, changes in share of the top 1% locations' innovation drive national spatial concentration trends after 1945. Third, regional innovation leadership displays persistence, but the strength of persistence appears to have fallen over time. We relate our analysis to recent findings in the literature and suggest promising avenues for future inquiry.
Featured on: VoxEU
Journal of Economics and Management Strategy, Vol. 30, No. 2, Summer 2021, pg. 368-397
I provide a primer on six recent large-scale historical patent datasets for use in innovation research. I discuss how each dataset is constructed, the types of patent information included in each, and the quality and completeness of each. Throughout, I emphasize when our knowledge of the history of invention is dependent on the data source used and provide recommendations about which dataset is most likely to be best for different contexts. Overall, these datasets paint a remarkably consistent picture of the history of U.S. invention. When the datasets do disagree, these differences tend to be minor, although I highlight some important exceptions. I further describe several "niche" historical patent datasets that allow researchers to study institutional contexts that cannot be studied using modern patent data. Finally, I discuss features of patent data that are not available for the historical patents but are available for modern patents.
Previous versions of this paper circulated with the titles "Comparing Historical Patent Datasets" and "Historical Patent Data: A Primer and Some Pitfalls."
Explorations in Economic History, Vol. 74, Oct. 2019
We assemble a novel dataset linking inventors listed in the Annual Reports of the Commissioner of Patents to Population Census records spanning 1870 to 1940. We find that inventors are not a random subset of the population. They differ in some unsurprising ways in that they tend to be older, whiter, and more likely male. However, these patterns do change over time. The odds ratio relative to the population as a whole of female inventors increases from a low of 0.07 in 1880 to a high of 0.13 in 1940 and that of non-whites ranges from 0.16 in 1880 to 0.34 in 1940. Both populations remain severely underrepresented throughout the timeframe. We find changes in the occupations of inventors with trends away from farming and towards white collar occupations. We also show the increasing importance of foreign born people in patenting. In 1870, the odds of a foreign born person patenting relative to the population as a whole is nearly 1 and increases to over 1.6 by 1940.
Introduction to The Role of Innovation and Entrepreneurship in Economic Growth, edited by Mike Andrews, Aaron K. Chatterji, Josh Lerner, and Scott Stern, University of Chicago Press, 2022, pg. 1-28.
This is an introduction to the volume The Role of Innovation and Entrepreneurship in Economic Growth. The chapters collected in this volume seek to answer the following questions: What is the relationship between innovation/entrepreneurship and economic growth in specific industrial sectors? How has the relationship between innovation/entrepreneurship and economic growth changed over time? How much do policies, programs, and specialized institutions meant to encourage innovation or entrepreneurship ultimately spur economic growth? Does innovation or entrepreneurship affect economic performance and social progress other than through measured productivity and economic growth, and if so, how can these effects be measured? We synthesize the chapters in this volume and present broad conclusions.
In The Economics of Research and Innovation in Agriculture, edited by Petra Moser, University of Chicago Press, 2021, pg. 139-175
To estimate the local effects of establishing land grant colleges, I compare locations that receive a land grant college to "runner-up" locations that were in contention to receive the land grant but did not for as-good-as-random reasons. I find that establishing a land grant college causes an increase in local invention, including in particular agricultural inventions, in college counties relative to the runner-up counties. But land grant college counties see only small and imprecisely estimated improvements in agricultural performance, measured by yield and output, relative to the runner-up counties. I discuss several alternative interpretations of these findings. By comparing the establishment of land grant colleges to non-land grant colleges, I show that land grants appear to cause smaller increases in local invention, population, and agricultural output, but larger increases in agricultural yields and new crop varieties. The effect of land grant colleges on local innovations is largest, even relative to non-land grant colleges, following the passage of legislation that increases funding to agricultural research.
Cato Policy Brief, Aug. 2023
A policy brief summarizing the methodology and conclusions from my paper "Bar Talk: Informal Social Networks, Alcohol Prohibition, and Invention." I show that events that disrupt informal social networks can cause declines in innovative activity, but innovation returns as people rebuild their social networks in the aftermath of the disruption.
Journal of Economic History Vol. 82, No. 2, June 2022, pg. 619-621
A review of Hintz's 2022 book, which provides a rich description of independent U.S. inventors throughout the 20th century. This is a period of time in which independent inventors are typically overshadowed by corporate innovations in the eyes of historians and the general public.
Journal of Economic Literature, Vol. 59, No. 1, March 2021, pg. 294-296
A review of Urquiola's 2020 book, which argues that the decentralized nature of the U.S. higher education system led to the U.S.'s dominance in university research.
Brookings Report, Nov. 2020
The history of Black people’s contributions to the catalog of inventions that marked the Second Industrial Revolution has been largely muted. This period is considered one of the most innovative eras in world history, seeing the birth of major advances in agriculture, transportation, communications, manufacturing, and electricity that fueled rapid economic growth. With the exception of a few notable inventors who are regularly elevated during Black History Month—e.g., George Washington Carver (peanut products) and Madam C. J. Walker (hair products)—the disregard of many of the era’s Black inventors not only whitewashes the historical record, but biases who we perceive to be innovators in the present. Using a new database of inventors, this report demonstrates that Black contributions to the Industrial Revolution were influenced by the disproportionate number of Black Americans who lived in the U.S. South in the late 19th and early 20th century, where their opportunities to acquire and apply skills were severely limited by oppressive institutions. Black Americans living outside the South invented nearly as frequently as white Americans, and at rates that would be considered extremely high by historic or global standards of invention even today.
Journal of Economic History, Vol. 79, No. 2, June 2019, pg. 514-517
I evaluate the importance of informal social interactions for invention by exploiting a massive involuntary disruption of informal networks from U.S. history: alcohol prohibition. State-level prohibition differentially treated counties depending on whether they were wet or dry prior to the state laws. After prohibition, previously wet counties had 13-35% fewer patents per year relative to consistently dry counties. The drop was largest 2-3 years after the imposition of prohibition and then rebounded as individuals reconstructed their informal social networks. I conduct several additional analyses that suggest the observed drop in patenting was driven by the disruption of informal social networks. Using data on inventors’ identities and collaborations, I show that individuals who were successful inventors before prohibition became relatively more likely to struggle to invent in the social network that evolved in response to prohibition, and that the new social network led to a change in the direction of inventive activity.
How can policymakers encourage innovators to disclose information in their patents when innovators have an incentive to strategically withhold this information? We build a duopoly model in which the innovator chooses how much to disclose about their cost-reducing invention before engaging in Cournot competition. More disclosure allows the follower to copy more of the invention, while also signaling that the innovator is a strong competitor. More disclosure also increases the probability that the innovator wins an infringement suit against a follower that copies. We find that policies that increase patent protection have different effects on disclosure depending on whether they change the damages imposed if an innovator wins an infringement suit or change the probability that the innovator wins. If damages increase, all innovator types disclose more, while if the probability of winning increases, high-quality innovators disclose less and low-quality innovators disclose more. To test this prediction, we use the 2016 Halo v. Pulse decision, which increased damages conditional on the inventor winning, and the 2011 Microsoft v. i4i decision, which increased the probability of an inventor winning. We find that the Halo decision increased disclosur efor the entire distribution of patents, while the i4i decision reduced patent disclosure for the highest quality patents and increased disclosure for the lowest quality patents. We conclude that the manner in which patent protection is increased matters for information disclosure, and some pro-patent policies can be counterproductive by reducing disclosure for the highest quality inventions.
We exploit historical natural experiments to test whether universities increase economic mobility and equality. We use runner-up counties that were strongly considered to become university sites but were not selected for as-good-as-random reasons as counterfactuals for university counties. University establishment causes greater intergenerational income mobility but also increases cross-sectional income inequality. We highlight four findings to explain this seeming paradox: universities hollow out the local labor market and provide greater opportunities to achieve top incomes, both of which increase cross-sectional inequality, and increase educational attainment and connections to high-SES people, which prevent inequality from perpetuating into intergenerational immobility.
with Lexi Smith
How should research resources be allocated across space to have the most beneficial impact on society? Prior studies suggest that the rate and direction of science is influenced by the local ideas scientists are most exposed to, and hence local conditions shape the direction of science. We investigate this hypothesis in the context of agricultural research, constructing a measure that quantifies the extent to which land grant colleges are located in counties that grow different distributions of crops than the rest of their states, which we refer to as agricultural unrepresentativeness. Consistent with the prior literature, land grant colleges in more agriculturally unrepresentative counties produce research focusing on unrepresentative crops. Because college locations are not determined randomly, these results may reflect endogenous sorting by state policymakers rather than causal effects of local agricultural conditions; we find evidence of such endogenous sorting. We isolate exogenous variation in land grant college's agricultural unrepresentativeness using historical college site selection natural experiments. When using only this exogenous variation, we find no correlation between land grant counties' unrepresentativeness and the unrepresentativeness of agricultural research. To understand this null result, we investigate actions land grant colleges can take to overcome the effects of local agricultural conditions, focusing especially on extension services. Land grant colleges that are exogenously placed in agriculturally unrepresentative areas build more extension stations and place them in more agriculturally representative parts of their states. We conclude that local agricultural conditions do not determine the direction of science so long as researchers can take actions to obtain non-local information.
Featured On: New Things Under the Sun Newsletter
Why does the share of women vary widely across STEM majors? Women make up a large share of majors in biology, chemistry, and related fields, but only a small share of physics and engineering majors. We propose a historical explanation for this puzzle: college home economics programs during the early 20th century introduced a generation of women to some scientific fields, but not others. Using novel data from college course catalogs, we quantify how science-heavy the early field of home economics was. We then document a contemporaneous relationship between the relative sizes of home economics and science programs using two datasets: a cross section from the 1910 Commissioner of Education report and panel data from a college of historical college yearbooks. In both datasets, we find that a ten percentage point increase in the share of women majoring in home economics is associated with a roughly 3 percentage point increase in the share of women majoring in science. We exploit the relationship between male agricultural education and home economics to construct an instrument for the relative size of home economics programs and argue that the observed relationship is likely causal. Finally, we document that historical home economics predicts the share of women studying biology in years since 1965.
Featured On: Marginal Revolution
We estimate how the availability of informal gathering places can facilitate knowledge spillovers that lead to innovation. More specifically, we estimate how the spread of coffee shops increases local inventive activity. To account for endogeneity in the number of coffee shops in an area, we use an instrumental variables approach based on the geographic and time patterns of the opening of Starbucks coffee establishments. As Starbucks opened new establishments, these establishments tended to spread outward from the location of the first Starbucks establishment in Seattle. Using this strategy, we find that 10% faster growth in the number of new Starbucks stores in a county increases patent filings in that county by about 4-6%. Average patent quality also increases in counties that see a faster growth in coffee establishments. Collaborative patenting and patenting by firms both increase, as does collaboration across firms, providing suggestive evidence that coffee shops are especially conducive for cross-firm business meetings. We obtain similar results when using instrumental variables based on the geographic and temporal patterns of the opening of other large coffee chains as well, each of which had their first establishments in different parts of the country.
Featured on: New York Times
This manuscript describes how locations were selected for a large sample of U.S. colleges and universities. It is designed to serve as an extended historical appendix to Andrews (2022) and describes how the sample was constructed for that project. My hope is that this historical narrative detail on college site selection processes will be of wider interest to historians, education researchers, and other scholars.