Institutions and Technological Innovation During the Early Economic Growth: Evidence from the Great Inventors of the United States, 1790-1930

47 Pages Posted: 1 Jun 2006 Last revised: 20 Dec 2013

See all articles by B. Zorina Khan

B. Zorina Khan

Bowdoin College - Department of Economics; National Bureau of Economic Research (NBER)

Kenneth L. Sokoloff

University of California, Los Angeles (UCLA) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: December 2004

Abstract

Employing a sample of renowned U.S. inventors that combines biographical detail with information on the patents they received over their careers, we highlight the impact of early U.S. patent institutions in providing broad access to economic opportunity and in encouraging trade in new technological knowledge. Through setting low fees and establishing administrative procedures for application, the United States deliberately created a patent system that allowed a much wider range, in socioeconomic class terms, of technologically creative individuals to obtain property rights to their inventions than did European patent institutions. Moreover, by requiring that applications be examined for novelty by technical experts, and by enforcing patent rights strictly, the U.S. system reduced uncertainty about the validity of patent rights, and in that way lowered the cost of transacting in them. Creating secure assets in new technological knowledge and facilitating access to markets in technology in this way both stimulated specialization at invention and further enhanced the opportunities available to technologically creative individuals who would otherwise have lacked the capital to directly extract returns from their efforts. Indeed, we show that until the late 19th century, the 'great inventors' of the U.S. generally had backgrounds that permitted them only limited formal schooling, and made extensive use of their abilities under the patent system to extract returns from trading their patent rights. The usefulness of the 19th century U.S. patent system to inventors with humble origins may have implications for the design of intellectual property institutions in contemporary developing countries.

Suggested Citation

Khan, B. Zorina and Sokoloff, Kenneth L., Institutions and Technological Innovation During the Early Economic Growth: Evidence from the Great Inventors of the United States, 1790-1930 (December 2004). NBER Working Paper No. w10966. Available at SSRN: https://ssrn.com/abstract=633627

B. Zorina Khan (Contact Author)

Bowdoin College - Department of Economics ( email )

Brunswick, ME 04011
United States
207-725-3000 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Kenneth L. Sokoloff

University of California, Los Angeles (UCLA) - Department of Economics ( email )

Box 951477
Los Angeles, CA 90095-1477
United States
310-825-4249,310-825-1011 (Phone)
310-825-9528 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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