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Causes of German Inventiveness, 1815–1990. What We Can Learn from Patent Statistics
Abstract
In the second half of the 19th century, Germany developed into one of
the most innovative economies in the world and was able to defend this position
in the 20th century. In order to investigate the causes of this inventiveness, it is
necessary to quantify innovations and assign them to inventors, regions and indus-
tries. For this reason, various historical patent databases have been set up over the
last two decades, currently covering the period from 1815 to 1990. We present these
patent databases and give an overview of the main empirical studies based on these statistics.
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This paper examines the patterns of technology transfer from Britain to France during the early phases of industrializing using a dataset comprising all patents granted in France in the period 1791–1844. Exploiting the peculiarities of French legislation, we construct an array of patent quality indicators and investigate their determinants. We find that patents filed by British inventors or French inventors with personal connections to British inventors were of relatively higher quality. Overall, our results show that the French innovation system was capable of attracting and effectively absorbing key technologies from Britain.
We study the impact of inclusive institutions on innovation using novel, hand-collected, county-level data for Imperial Germany. We use the timing and geography of the French occupation of different German regions after the French Revolution of 1789 as an instrument for institutional quality. We find that the number of patents per capita in counties with the longest occupation was more than double that in unoccupied counties. Among the institutional changes brought by the French, the introduction of the Code civil, ensuring equality before the law, and the promotion of commercial freedom through the abolition of guilds and trade licenses had a stronger effect on innovation than the abolition of serfdom, which increased labor market mobility, and agricultural reforms that broke up the power of rural elites. The effect of institutions on innovation is particularly pronounced for high-tech innovation, suggesting that innovation might be a key channel through which institutions ultimately affect economic growth. Our findings highlight inclusive institutions as a first-order determinant of innovation.
This paper was accepted by Gustavo Manso, finance.
We document the generation and the content of the Comprehensive Patent Database (CPDB) of the German Democratic Republic (GDR) (1949-1990), which is freely available at GESIS https://doi.org/10.7802/2448. The database contains all patents granted in the GDR and published by the Office of Inventions and Patents (later: German Patent and Trade Mark Office/DPMA). The core database covers the years 1950-1990 and contains 24 variables with manually cleaned and processed information on a total of 261,822 unique patents of the GDR.
We document the generation and the content of the Comprehensive Patent Database (CPDB) of the German Democratic Republic (GDR) (1949-1990), which is freely available at GESIS https://doi.org/10.7802/2448. The database contains all patents granted in the GDR and published by the Office of Inventions and Patents (later: German Patent and Trade Mark Office/DPMA). The core database covers the years 1950-1990 and contains 24 variables with manually cleaned and processed information on a total of 261,822 unique patents of the GDR.
In the second half of the nineteenth century, the patent office of the German state
Wuerttemberg strategically discriminated against foreign inventors by charging
comparatively high patent fees. We show that this administrative practice was
driven by fiscal and protectionist motives.
In this essay, we trace the evolution of four different patent laws in Sweden; from the first Swedish law of privilegia exclusiva in 1819 to the country becoming only the third country in the world to introduce novelty searches into the law of 1884. We discuss the ensuing contemporary public debates surrounding new proposals for legislation, as well as discernible effects of new patent laws. From being mainly a question about the “tyranny of monopolies” in the early laws to being one of “life and death for Swedish industry” in the subsequent laws, we show how changes in patent legislation resulted in three different types of innovation; technological, market and organizational. The results show that although the early laws implied severe litigation problems and considerably shorter patent terms, an early market for technology emerged as legislation had clearly established that intellectual property could be sold, bought and inherited. Concurrently the law of 1856 created a market for patenting services and patent agencies by requiring the use of Swedish agents by foreign patentees. Finally, foreign patenting increased as restrictions on patentees being non-Swedish citizens were gradually phased out.
In spite of important recent work on the history of technology and the dynamics of technological change in Latin America, the literature in this field remains relatively undeveloped. In part, this is due to a relative scarcity of available sources for conducting research. This research note argues that national patent records are an important and untapped source for a wide range of studies on technology and technological change. The research note announces the creation of major new comprehensive databases of patent records in several Latin American countries, part of a larger, ongoing project to compile and make publically accessible patent records across the region. We also provide an introduction to the history of patents in Latin America, followed by a discussion of both the use (and misuse) of patents as historical evidence and recent advances in collecting and using patent evidence in Latin America.
The effect of human capital on growth involves multiple channels. On the one hand, an increase in human capital directly affects economic growth by enhancing labor productivity in production. On the other hand, human capital is an important input into R&D and therefore increases labor productivity indirectly by accelerating technological change. In addition, different types of human capital such as basic and higher education or training-on-the-job might play different roles in both production and innovation activities. We merge individual data on valuable patents granted in Prussia in the late nineteenth-century with county-level data on literacy, craftsmanship, secondary schooling, and income tax revenues to explore the complex relationship between various types of human capital, innovation, and income. We find that the Second Industrial Revolution can be seen as a transition period when it comes to the role of human capital. As in the preceding First Industrial Revolution, “useful knowledge” embodied in master craftsmen was related to innovation, especially of independent inventors. As in the subsequent twentieth century, the quality of basic education was associated with both workers’ productivity and firms’ R&D processes. In a final step, we show that literacy had also a negative effect on fertility which increased with innovation. In general, our findings support the notion that the accumulation of basic human capital was crucial for the transition to modern economic growth.
It is clear that technology is a key driver of economic growth. Much less clear is where new technologies are produced and how the geography of U.S. invention has changed over the last two hundred years. Patent data report the geography, history, and technological characteristics of invention. However, those data have only recently become available in digital form and at the present time there exists no comprehensive dataset on the geography of knowledge production in the United States prior to 1975. The database presented in this paper unveils the geography of historical patents granted by the United States Patent and Trademark Office (USPTO) from 1836 to 1975. This historical dataset, HistPat, is constructed using digitalized records of original patent documents that are publicly available. We describe a methodological procedure that allows recovery of geographical information on patents from the digital records. HistPat can be used in different disciplines ranging from geography, economics, history, network science, and science and technology studies. Additionally, it is easily merged with post-1975 USPTO digital patent data to extend it until today.
What are the long-term economic effects of a more equal distribution of wealth? We investigate consequences of land inequality, exploiting variation in land inheritance rules that traverse political, linguistic, geological, and religious borders in Germany. In some German areas, inherited land was to be shared or divided equally among children, while in others land was ruled to be indivisible. Using a geographic regression discontinuity design, we first show a more equal land distribution in areas with equal division; other potential drivers of growth are smooth at the boundary and equal division areas were not historically more developed. Today, equal division areas feature higher average incomes and more entrepreneurship which goes in hand with a right-shifted skill, income, and wealth distribution. We show evidence consistent with the more even distribution of land leading to more innovative industrial by-employment during Germany’s transition from an agrarian to an industrial economy that, in the long-run, led to more entrepreneurship.
We discuss the considerable literature that has developed in recent years providing rigorous evidence on how industrial policies work. This literature is a significant improvement over the earlier generation of empirical work, which was largely correlational and marred by interpretational problems. On the whole, the recent crop of papers offers a more positive take on industrial policy. We review the standard rationales and critiques of industrial policy and provide a broad overview of new empirical approaches to measurement. We discuss how the recent literature, paying close attention to measurement, causal inference, and economic structure, is offering a nuanced and contextual understanding of the effects of industrial policy. We re-evaluate the East Asian experience with industrial policy in light of recent results. Finally, we conclude by reviewing how industrial policy is being reshaped by a new understanding of governance, a richer set of policy instruments beyond subsidies, and the reality of deindustrialization.
Zusammenfassung
In diesem Beitrag untersuchen Michael Fritsch, Maria Greve und Michael Wyrwich die Auswirkungen der deutschen Teilung und Wiedervereinigung auf die Innovationsaktivitäten in Ostdeutschland. Die empirischen Analysen deuten darauf hin, dass die Vorteile der Integration der beiden Innovationssysteme zu einem großen Teil in Westdeutschland anfielen, trotz der Zunahme an Innovationsaktivitäten im Osten. Offenbar beruht dieses zunehmende Ost-West-Gefälle nicht allein auf der Ineffizienz ostdeutscher Innovationsaktivitäten während der sozialistischen Periode, sondern auch auf der im Rahmen der schnellen Wiedervereinigung erfolgten Schock-Transformation.
The distinction between macro- and microinventions is at the core of recent debates on the Industrial Revolution. Yet, the empirical testing of this notion has remained elusive. We address this issue by introducing a new quality indicator for all patents granted in England in the period 1700–1850. The indicator provides the opportunity for a large-scale empirical appraisal of macro- and microinventions. Our findings indicate that macroinventions did not exhibit any specific time-clustering, while microinventions were characterized by clustering behavior. In addition, we also find that macroinventions displayed a labor-saving bias and were mostly introduced by professional engineers. These results suggest that Allen’s and Mokyr’s views of macroinventions, rather than conflicting, should be regarded as complementary.
In this paper, we study the social background of Prussian inventors in the mid-19 th century, using biographical information for over 1,500 individuals that filed a patent in Prussia. There are four major findings. First, there is evidence for broadly based inventive activity, including a large number of inventors from middle- and lower-class backgrounds. Second, concerning the role of human capital, we argue that a combination of formal and informal education was crucial for the generation of innovation, though the importance of formal education increased over time. Third, we provide evidence that inventive activity fostered social mobility. Many inventors founded companies after they had filed a patent, suggesting that they could exploit their inventions commercially. Fourth, we show that inventors were highly mobile. Inventors migrated to the commercial centers of Prussia, in particular to Berlin and to the booming cities of the Rhine Province. In this regard, migration of highly skilled individuals may provide an explanation for the strong path-dependency that we observe when studying the geography of innovation and patenting.
A significant argument in favor of patents is that they enable knowledge disclosure, which compensates for their social cost. Although patent institutions can influence disclosure levels by what they require before granting patents, innovators have a natural bias to conceal key information because such knowledge can make a competitor’s second-generation invention and patent more powerful. Despite interest in the subject, little empirical research has been carried out to analyze how much information patents actually disclose and how patentees and corporations historically manage these kinds of monopolies. Using a key case study of a radical innovation—the four-stroke engine, patented by Nicolaus August Otto in 1876—we conducted a detailed technical analysis of its patents in six countries. Our research provides new insights on issues related to full (or lack thereof) patent disclosure, the management strategies designed to maintain patent monopolies, and the effects of such monopolies on future innovation, knowledge, and control of marketplaces.
In this paper, we investigate the economic returns to industrial espionage. We show that the flow of information provided by East German informants in the West over the period 1970–1989 led to a significant narrowing of sectoral TFP gaps between West and East Germany. These economic returns were primarily driven by relatively few high-quality pieces of information and particularly large in sectors closer to the West German technological frontier. Our findings suggest that the East-to-West German TFP ratio would have been 13.3 percent lower at the end of the Cold War had East Germany not engaged in industrial espionage in the West. (JEL L16, N44, O33, O38, O47, P24)
The article analyses Swedish and Finnish patent agents and their businesses at the turn of the twentieth century. Due to legal requirements, all foreign patent applications had to pass through the hands of patent agents. Despite the central role, this transnational business of technology intermediation has received only limited attention in the scholarship. The article studies the business relationships between the patent agents and their clients, and employs new datasets, which include information about all foreign patentees using a patent agent in 1860–1910. The main findings are that the transnational business relationships affected the specialisation of national patent agents, especially in Finland, where patent agents with a legal background contributed to the inflow of inventions managed by Swedish patent agents. Patent agent services also represented significant indirect costs of the patent systems for their foreign clients.
Novel information on land rent is used to estimate the income side of German net national product (NNP) in 1851–1913 without recourse to output side aggregates. The new series shows higher values during the initial part of the period of observation, which narrows the wedge that opens up between existing estimates of NNP before the 1880s. The results support a modified Crafts–Harley view of the first phase of German industrialization: despite rapid catch-up growth of industrial leading sectors from the 1840s to the 1870s, the pace of aggregate growth accelerated only gradually. The initially small size of the modern sector and the simultaneity of the first phase of industrialization and the first wave of globalization account for this paradox. The labor share remained largely constant; the decline of the land share in NNP was compensated by a rise of the capital share.
In this article, we give an overview of the differences in German patent legislations between 1815 and 1876. German patent laws differed in particular with regard to the application and approval system, the treatment of foreign applicants, and patent fees. Differences in the former two categories provide an explanation why the number of patents was considerably lower in Prussia than in other states. While the number of Prussian patents per capita almost stagnated between 1840 and 1872, it increased in Baden, Bavaria and Saxony. Formal differences in patent law do not fully explain this pattern, but Prussian patent policy does. The Prussian patent authority set high barriers to get a patent by applying a thorough technical examination and a strict definition of novelty. Furthermore, we show that states using a registration system granted a considerably higher number of patents than states with technical examinations.
In 1864, the patent law of the Kingdom of Sardinia was extended to the newly created Kingdom of Italy. In this paper, on the basis of a new dataset containing all Italian patents granted over the period 1855-1872, we examine the formative years of this crucial institutional change. Firstly, we map the characteristics of the inventors before and after the 1864 reform. In particular, we look at their nationality and geographical distribution within the country, the technological fields in which they were active, the intensity of use of the system (sporadic versus “systematic” patentees), and their investments in patent protection (measured in terms of the fees they were paying). We find that the reform of the patent system prompted a reconfiguration of the geographical structure of Italian inventive activity, producing an increasing participation of the inventors of the other pre-unitary states, and, at the same time, becoming more attractive for inventors on a large international scale. This can be interpreted as a sign of an effective integration policy, at least in this specific domain of government activity.
During the 1870s and 80s many countries revised their national patent laws. This was also a period when international co-operation was intensified to reach an agreement on patent legislation. It culminated in the Paris Patent Convention of 1880, leading to an increased harmonization of the various national patent laws. In Norway the revision of the patent law was set in motion in the 1870s, culminating in a new law in 1885. The paper analyses this process, and in particular how it related to legislative work that went on abroad.
The influence of the patent system on the economic performance of Western countries during the Industrial Revolution is an important but difficult question to address. With the United Kingdom and the United States, France was one of the first countries to adopt a modern patent legislation in 1791. The aim of this paper is to understand the paradox of such a system, which was based on a democratic and natural-right conception of invention but turned out to be restrictive. It analyses the legal framework and its evolution from 1791 to the late 1850s and reveals its contradictory aspects: a natural right inspiration vs a restrictive access due to the cost of the patent. It shows how the 1844 Patent Act reform did not end the criticism of the French patent system. Then, in a second part, it considers the diffusion of patents in time, in different regions and industries and stresses the heterogeneity of the patent system.
We present a framework for understanding the effects of automation and other types of technological changes on labor demand, and use it to interpret changes in US employment over the recent past. At the center of our framework is the allocation of tasks to capital and labor—the task content of production. Automation, which enables capital to replace labor in tasks it was previously engaged in, shifts the task content of production against labor because of a displacement effect. As a result, automation always reduces the labor share in value added and may reduce labor demand even as it raises productivity. The effects of automation are counterbalanced by the creation of new tasks in which labor has a comparative advantage. The introduction of new tasks changes the task content of production in favor of labor because of a reinstatement effect, and always raises the labor share and labor demand. We show how the role of changes in the task content of production—due to automation and new tasks—can be inferred from industry-level data. Our empirical decomposition suggests that the slower growth of employment over the last three decades is accounted for by an acceleration in the displacement effect, especially in manufacturing, a weaker reinstatement effect, and slower growth of productivity than in previous decades.
This paper investigates the relevance for innovation of international exhibitions. While the first of these events, i.e., London’s 1851 Great Exhibition, was an “exhibition of innovations,” many of the subsequent ones, following the model of industrial exhibitions developed in France, did not select exhibits based on novelty. In fact, they displayed a large spectrum of products, ranging from machines to primary products. Therefore, the suitability of data from their catalogs for proxying innovation, and their relationship to the traditional patent measure, should be better qualified. To do so, this paper performs an in-depth analysis of the Turin 1911 international exhibition, a medium-sized representative “French-model” exhibition. It matches a new database, built from the catalog of this event, with patents granted in Italy, revealing substantial differences. Furthermore, it evaluates how inventors could use the exhibition to promote their ideas, establish their reputation, and develop their career.
In 1917 Congress passed the Trading with the Enemy Act to prevent trade with Germany and the Central Powers. It was a wartime law designed for wartime conditions but one that, over the course of the following century, took on a secret, surprising life of its own. Eventually it became the basis for a project of worldwide economic sanctions applied by the United States at the discretion of the president during times of both war and peace. This article traces the history of the law in order to explore how the expansion of American power in the twentieth century required a transformation of the American state and the extensive use of executive powers justified by repeated declarations of national emergency.
This article analyses the spread of innovation in mid‐nineteenth‐century Germany using foreign patents as an indicator for technology transfer. It introduces a new dataset of over 1,400 patents granted in the Grand Duchy of Baden between 1843 and 1877. The data show that Baden's technology import via foreign patents from German and non‐German inventors was important. This technology transfer was broadly based, although technologies related to the textile and machine‐building industries are prominent in the data. The decision to file a patent in Baden was driven by competition and the risk of imitation. Using a gravity model with city‐level data, we find evidence that technology transfer through patents reflected existing trade links. The strong correlation between technologies filed by foreigners and domestic inventors provides further evidence that the risk of imitation fostered patent‐based technology transfer during the mid‐nineteenth century. Furthermore, we show that foreigners filed patents predominantly in industries that accounted for a high share of the workforce in Baden.
In this paper we provide a systematic appraisal of the spatial patterns of inventive activity in Italy in the period 1861-1913 using patent data. First, we introduce a characterization of the spatial distribution of patents and of its evolution over time. Second, we assess the connection between different forms of human capital and patent intensity. We establish a robust correlation between secondary technical education and science and engineering university studies and patent activity. Third, we study the connection between patents and industrialization. Our main finding is that inventive activities were an important element of the industrialization process, even in a latecomer country such as Italy.
This book examines the process of development from an epoch of Malthusian stagnation to a state of sustained economic growth. The analysis focuses on recently advanced unified growth theories that capture the intricate evolution of income per capita, technology, and population over the entire course of human history. The inconsistency of non-unified growth models with the main characteristics of the process of development across most of human history induced growth theorists to advance an alternative theory that captures in a single unified framework the epoch of Malthusian stagnation, the modern era of sustained economic growth, and the recent transition between these distinct regimes. Unified growth theory reveals the underlying micro foundations that are consistent with the growth process over the entire history of the human species, enhancing the confidence in the viability of the theory, its predictions and its policy implications for the growth process of less developed economies.
Analyzing 474 cases of firms going public in the German capital between 1892 and 1913, we show that innovative firms could rely on the Berlin stock market as a source of financing. Our data also reveal that initial public offerings (IPO) of innovative firms were characterized by particularly low underpricing, comparatively high first trading prices, and no long-run underperformance. We interpret these empirical results as evidence for the surprising fact that in the period of the Second Industrial Revolution the Berlin stock exchange was already a well-functioning market for new technology. (JEL G14, N23).