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Thursday, January 31, 2013

Patent Producers Clustered in Only a Few Cities

Patents, for all their flaws, are a widely used proxy for innovation. And a new study from the Brookings Institution shows just how clustered patent-related innovation is in America.

That cities are hot beds of creativity of all kinds well known. But the Brookings research details just how concentrated an activity associated with scientific and technological innovation â€" patent filings â€" really is. There are more than 370 metropolitan statistical areas in the United States. But the people living in just 20 metro areas â€" home to 34 percent of the population â€" generate 63 percent of the nation’s patents. In the five most patent-intensive metro areas, the study found, the average resident is 2.4 times more likely to produce a patented innovation than the average American.

Those five metro areas with the most patent filings per million people, from 2007 to 2011, were: San Jose-Snnyvale-Santa Clara, Calif; Burlington-South Burlington, Vt.; Rochester, Minn.; Corvallis, Ore.; and Boulder, Colo.

(It’s easy to see why silicon Valley is on the list, but the others The common thread among three of the cities, Burlington, Rochester and Boulder, is universities and I.B.M. Corvallis is also a university town, with a Hewlett-Packard facility.)

The 49-page report, according to its lead author, Jonathan Rothwell, a senior research associate at Brookings, was an attempt to put a yardstick to the output of innovation, make comparisons and suggest useful policy steps.

One school of thought in regional economic development, Mr. Rothwell observed, has emphasized stimulating consumption by investing in downtown sports stadiums, convention centers and shopping malls â€" attractive urban settings to attract people and dollars. That was the path, he said, taken by some central California cities, like Stockton.

“Those investments proved to be made on a house of sand,â€!  Mr. Rothwell said, noting that Stockton declared bankruptcy last year, a financial casualty of the real estate recession.

The prime economic engines, Mr. Rothwell said, are research universities. These university communities are patent-generating powerhouses and large recipients of research funding from the federal government, a resource at risk, Mr, Rothwell observed, with budget cuts in the offing. And companies that receive federal Small Business Innovation Research grants tend to be prolific patenters.

Patent-intensive metro areas, Mr. Rothwell said, enjoy higher incomes, even compared with cities of comparable size and education levels. “San Diego does much better than, say, Atlanta or Houston,” he said. One factor, he added, was that the college educated in San Diego were far more likely to have degrees in science, technology, engineering or math than in Atlanta or Houston.

The Brookings report says some critical things to say about sectors of the patent system, notably broad ad vague software patents. “The growing popularity of open-source software is something of a rebuke to the patent system,” write the authors Mr. Rothwell, Jose Lobo, Deborah Shrumsky and Mark Muro.

But the study points to the trends of increasing research spending per patent, and the rising number of citations and claims in each patent as evidence that the pace of patent activity overall is a good stand-in measure of innovation â€" and it is growing.