A new NBER study on the trend of technology patents since the 1970s takes a deeper dive into the data behind the rapid growth of patenting within this field.
Patenting in software, cloud computing, and artificial intelligence has grown rapidly in recent years. Such patents are acquired primarily by large US technology firms such as IBM, Microsoft, Google, and HP, as well as by Japanese multinationals such as Sony, Canon, and Fujitsu. Chinese patenting in the US is small but growing rapidly, and world-leading for drone technology. Patenting in machine learning has seen exponential growth since 2010, although patenting in neural networks saw a strong burst of activity in the 1990s that has only recently been surpassed. In all technological fields, the number of patents per inventor has declined near-monotonically, except for large increases in inventor productivity in software and semiconductors in the late 1990s. In most high-tech fields, Japan is the only country outside the US with significant US patenting activity; however, whereas Japan played an important role in the burst of neural network patenting in the 1990s, it has not been involved in the current acceleration. Comparing the periods 1970-89 and 2000-15, patenting in the current period has been primarily by entrant assignees, with the exception of neural networks.
These results aren’t particularly surprising. As the home of Silicon Valley and the birthplace of the Third Industrial Revolution, the United States leads the way by a large margin in software patenting, though Japanese firms are a strong presence in the field. What’s more interesting is the dramatic increase in the number of patent applications and patents issued.
We document a continued dramatic increase in software patents during the course of the twenty-first century, with a 60.2% increase in ultimately successful filings between 2000 and 2013, and a 168.6% increase in applications over the same period. The rate of increase—albeit on a modest base—is far more dramatic for many of the emerging technologies, such as drones, cloud computing, and machine learning.
(Note: the number of patent grants falls off following 2013 due to long patent processing times.)
The other interesting finding of the paper is the relationship between patenting and the number of inventors listed on each patent.
The most striking finding is the rapid fall in patents per inventor once each field opens up. It appears new technology fields are characterized by rapid bursts of innovation from a relatively small group of inventors followed by a fanning out and slowing down in per-inventor productivity.
Of course, the authors remind us that their analysis is limited because it’s difficult to evaluate the quality of the patents issued, making them an imperfect measure for innovation.
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