This paper uses renewal data to estimate the value of U.S. patents, controlling for patent and owner characteristics. Estimates of U.S. patent value are substantially larger than estimates for ...European patents, however, the ratio of U.S. patent value to R&D for firms is only about 3%. Contrary to a common assertion, patents issued to small patentees are much less valuable than those issued to large corporations. Litigated patents are more valuable, as are highly cited patents. However, patent citations explain little variance in value, suggesting limits to their use as a measure of patent quality.
"Bessen sets out to refute the arguments of... techno-pessimists, relying on economic analysis and on a fresh reading of history" ( The Wall Street Journal ). Technology is constantly changing our ...world, leading to more efficient production. But where once technological advancements dramatically increased wages, the median wage has remained stagnant over the past three decades. Many of today's machines have taken over the work of humans, destroying old jobs while increasing profits for business owners and raising the possibility of ever-widening economic inequality. Here, economist and software company founder James Bessen discusses why these remarkable advances have, so far, benefited only a select few. He argues the need for unique policies to develop the knowledge and skills necessary to implement rapidly evolving technologies. Currently, this technical knowledge is mostly unstandardized and difficult to acquire, learned through job experience rather than in classrooms, but labor markets rarely provide strong incentives for learning on the job. Basing his analysis on intensive research into economic history as well as today's labor markets, Bessen explores why the benefits of technology can take decades to emerge. Although the right policies can hasten the process, policy has moved in the wrong direction, protecting politically influential interests to the detriment of emerging technologies and broadly shared prosperity. This is a thoughtful look at what leaders need to do to ensure success not only for the next quarter, but for society in the long term. "Everyone agrees that education is the key to wage growth. But what kind of education?... This enlightening and insightful book... shows that economic history can provide some useful and surprising answers." —Hal Varian, chief economist at Google
Rapid advances in artificial intelligence (AI) and automation technologies have the potential to significantly disrupt labor markets.While AI and automation can augment the productivity of some ...workers, they can replace the work done by others and will likely transform almost all occupations at least to some degree. Rising automation is happening in a period of growing economic inequality, raising fears of mass technological unemployment and a renewed call for policy efforts to address the consequences of technological change. In this paper we discuss the barriers that inhibit scientists frommeasuring the effects of AI and automation on the future of work. These barriers include the lack of high-quality data about the nature of work (e.g., the dynamic requirements of occupations), lack of empirically informed models of key microlevel processes (e.g., skill substitution and human–machine complementarity), and insufficient understanding of how cognitive technologies interact with broader economic dynamics and institutional mechanisms (e.g., urban migration and international trade policy). Overcoming these barriers requires improvements in the longitudinal and spatial resolution of data, as well as refinements to data on workplace skills. These improvements will enable multidisciplinary research to quantitatively monitor and predict the complex evolution of work in tandem with technological progress. Finally, given the fundamental uncertainty in predicting technological change, we recommend developing a decision framework that focuses on resilience to unexpected scenarios in addition to general equilibrium behavior.
In recent years, business leaders, policymakers, and inventors have complained to the media and to Congress that today's patent system stifles innovation instead of fostering it. But like the ...infamous patent on the peanut butter and jelly sandwich, much of the cited evidence about the patent system is pure anecdote--making realistic policy formation difficult. Is the patent system fundamentally broken, or can it be fixed with a few modest reforms? Moving beyond rhetoric,Patent Failureprovides the first authoritative and comprehensive look at the economic performance of patents in forty years. James Bessen and Michael Meurer ask whether patents work well as property rights, and, if not, what institutional and legal reforms are necessary to make the patent system more effective.
Patent Failurepresents a wide range of empirical evidence from history, law, and economics. The book's findings are stark and conclusive. While patents do provide incentives to invest in research, development, and commercialization, for most businesses today, patents fail to provide predictable property rights. Instead, they produce costly disputes and excessive litigation that outweigh positive incentives. Only in some sectors, such as the pharmaceutical industry, do patents act as advertised, with their benefits outweighing the related costs.
By showing how the patent system has fallen short in providing predictable legal boundaries,Patent Failureserves as a call for change in institutions and laws. There are no simple solutions, but Bessen and Meurer's reform proposals need to be heard. The health and competitiveness of the nation's economy depend on it.
We argue that when innovation is "sequential" (so that each successive invention builds in an essential way on its predecessors) and "complementary" (so that each potential innovator takes a ...different research line), patent protection is not as useful for encouraging innovation as in a static setting. Indeed, society and even inventors themselves may be better off without such protection. Furthermore, an inventor's prospective profit may actually be enhanced by competition and imitation. Our sequential model of innovation appears to explain evidence from a natural experiment in the software industry.
SUMMARY
Will new technologies cause industries to shed jobs, requiring novel policies to address mass unemployment? Sometimes productivity-enhancing technology increases industry employment instead. ...In manufacturing, jobs grew along with productivity for a century or more; only later did productivity gains bring declining employment. What changed? The elasticity of demand. Using data over two centuries for US textile, steel and auto industries, this paper shows that automation initially spurred job growth because demand was highly elastic. But demand later became satiated, leading to job losses. A simple model explains why this pattern might be common, suggesting that today’s technologies may cause some industries to decline and others to grow. Automation might not cause mass unemployment, but it may well require workers to make disruptive transitions to new industries, requiring new skills and occupations.
How much of the rapid growth in output per man-hour in nineteenth-century cotton weaving arose from technical change and how much arose from price-driven substitution of capital for labor? Using an ...engineering production function, I find that factor price changes account for little of the growth in output per man-hour. However, much of the growth and most of the apparent labor-saving bias arose not from inventions, but from improved labor quality—better workers spent less time monitoring the looms. Labor quality played a critical role in the persistent association between economic growth and capital deepening in this important sector.
Industry concentration has been rising in the United States since 1980. Does this signal declining competition and the need for a new antitrust policy? Or are other factors causing concentration to ...increase? This paper explores the role of proprietary information technology (IT), which could increase the productivity of top firms relative to others and raise their market share. Instrumental variable estimates find a strong link between proprietary IT and rising industry concentration, accounting for most of its growth. Moreover, the top four firms in each industry benefit disproportionately. Large investments in proprietary software—$250 billion per year—appear to significantly impact industry structure.
The direct costs from NPE disputes Bessen, James; Meurer, Michael J
Cornell law review,
01/2014, Letnik:
99, Številka:
2
Journal Article
Recenzirano
In the past, "non-practicing entities" (NPEs), popularly known as "patent trolls", have helped small inventors profit from their inventions. Is this true today or, given the unprecedented levels of ...NPE litigation, do NPEs reduce innovation incentives? Using a survey of defendants and a database of litigation, this paper estimates the direct costs to defendants arising from NPE patent assertions. We estimate that firms accrued $29 billion of direct costs in 2011. Although large firms accrued over half of the direct costs, most of the defendants were small or medium-sized firms. Moreover, an examination of publicly listed NPEs indicates that little of the direct costs represents a transfer to small inventors.
An Empirical Look at Software Patents Bessen, James; Hunt, Robert M.
Journal of Economics & Management Strategy,
03/2007, Letnik:
16, Številka:
1
Journal Article
Recenzirano
Odprti dostop
Software patents have grown rapidly in number and now comprise 15% of all patents. They are acquired primarily by large manufacturing firms in industries known for strategic patenting; only 5% belong ...to software publishers. The very large increase in software patent propensity over time is not adequately explained by changes in R&D investments, employment of computer programmers, or productivity growth. The residual increase in software patent propensity is consistent with a sizeable increase in the cost effectiveness of software patents during the 1990s, perhaps arising from changes in the application of patent law to computer software.
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