Technology, Jobs, and Skills
Software and Software Patents
Performance of Patents and Property Systems
Economic Theory of Innovation
by James Bessen
Abstract: This paper investigates basic relationships between technology and occupations. Building a general occupational model, I look at detailed occupations since 1980 to explore whether computers are related to job losses or other sources of wage inequality. Occupations that use computers grow faster, not slower. This is true even for highly routine and mid-wage occupations. Estimates reject computers as a source of significant net technological unemployment or job polarization. But computerized occupations substitute for other occupations, shifting employment and requiring new skills. Because new skills are costly to learn, computer use is associated with substantially greater within-occupation wage inequality.
Which Patent Systems are Better for Inventors?
by James Bessen and Grid Thoma
Abstract: International comparisons of patent systems are essential to harmonization treaties and to analyze economic growth. Yet these comparisons often rely on little but conventional wisdom. This paper develops an empirical method to compare the economic strength and quality of patent systems by using renewal analysis of matched patents in different countries (same patent family). Comparing patents on the same inventions filed at the EPO for Germany and in the US, we find that the German patents generate substantially greater market power than their US equivalents, especially for small inventors. Also, the average US patent has relatively lower economic value (“quality”).
Diffusing New Technology Without Dissipating Rents: Some Historical Case Studies of Knowledge Sharing
by James Bessen and Alessandro Nuvolari
Abstract: The diffusion of innovations is supposed to dissipate inventors’ rents. Yet in many documented cases, inventors freely shared knowledge with rivals, including in steam engines, iron and steel production and textile machinery. Using a model and case studies, this paper explores why sharing did not eliminate inventors’ incentives. Each new technology coexisted with an alternative for one or more decades. This allowed inventors to earn high rents while sharing knowledge, making major productivity gains. In contrast, patents generated little value. The technology diffusion literature suggests that such circumstances are common during the early stages of a technology. This has important implications for innovation policy.