TIIP Newsletter

How important has the patent system been for technical progress? Some economic historians, such as Douglass North, argue that the patent system was a critical prerequisite for the British Industrial Revolution. This view is supported by the “heroic inventors” version of history, which holds that Great Inventors, like James Watt, needed and deserved to be granted special rights. Others historians, such as Joel Mokyr and David Landes, are more skeptical. They note that many important inventions in this period were not patented—that innovation was largely anonymous, incremental, and widely shared, without the restrictions imposed by patents.

Alessandro Nuvolari’s study of steam engine technology in Cornwall—the very technology of Watt’s inventions—provides an important example of the role that such “collective invention” played during the Industrial Revolution. The term “collective invention” was coined by Allen (1983), but it is similar to “user innovation” (von Hippel), and the idea will undoubtedly be familiar to Free/Open Source software developers.

The modern steam engine was first developed by Newcomen during the early 1700s to help pump water out of mines. In 1765, Watt invented an improvement that substantially increased the fuel efficiency of these engines. Watt patented this and subsequent improvements, and he became one of the most prominent advocates of the patent system. (Later, he successfully lobbied Parliament to extend the term of his patents).

But the significance of Watt’s inventions and the benefits of patents have been the subject of a certain amount of mythmaking (see Macleod, 1998). In fact, Watt used his patents to block other inventors from making improvements that in the long run proved far more significant than Watt’s own invention, the most significant being the high-pressure steam engine. Not surprisingly, Nuvolari finds that engine productivity growth stagnated while Watt’s patents remained in force. The figure below, taken from Nuvolari’s paper, shows the average and best-practice “duty,” or power efficiency, of Cornish steam engines. The greatest increases in efficiency occurred after 1800, when Watt’s patent expired. These improvements took place over a period when engineers rarely patented their inventions and shared their knowledge widely and freely with others. This openness clearly accelerated the rate of improvement.


		Collective Invention during the British Industrial Revolution: The Case of the Cornish Pumping Engine by Alessandro Nuvolari (Eindhoven Centre for Innovation Studies) Working Paper 01.04, Faculty of Technology Management, Technische Universiteit Eindhoven (Forthcoming in Cambridge Journal of Economics) FULL TEXT
		--Summary by James Bessen Research on Innovation
		How important has the patent system been for technical progress? Some economic historians, such as Douglass North, argue that the patent system was a critical prerequisite for the British Industrial Revolution. This view is supported by the “heroic inventors” version of history, which holds that Great Inventors, like James Watt, needed and deserved to be granted special rights. Others historians, such as Joel Mokyr and David Landes, are more skeptical. They note that many important inventions in this period were not patented—that innovation was largely anonymous, incremental, and widely shared, without the restrictions imposed by patents. Alessandro Nuvolari’s study of steam engine technology in Cornwall—the very technology of Watt’s inventions—provides an important example of the role that such “collective invention” played during the Industrial Revolution. The term “collective invention” was coined by Allen (1983), but it is similar to “user innovation” (von Hippel), and the idea will undoubtedly be familiar to Free/Open Source software developers. The modern steam engine was first developed by Newcomen during the early 1700s to help pump water out of mines. In 1765, Watt invented an improvement that substantially increased the fuel efficiency of these engines. Watt patented this and subsequent improvements, and he became one of the most prominent advocates of the patent system. (Later, he successfully lobbied Parliament to extend the term of his patents). But the significance of Watt’s inventions and the benefits of patents have been the subject of a certain amount of mythmaking (see Macleod, 1998). In fact, Watt used his patents to block other inventors from making improvements that in the long run proved far more significant than Watt’s own invention, the most significant being the high-pressure steam engine. Not surprisingly, Nuvolari finds that engine productivity growth stagnated while Watt’s patents remained in force. The figure below, taken from Nuvolari’s paper, shows the average and best-practice “duty,” or power efficiency, of Cornish steam engines. The greatest increases in efficiency occurred after 1800, when Watt’s patent expired. These improvements took place over a period when engineers rarely patented their inventions and shared their knowledge widely and freely with others. This openness clearly accelerated the rate of improvement.

		Nuvolari attributes this pattern of collective invention to three characteristics of the industry and technology: 1.) gradual development through trial-and-error, 2.) mine operators who had overlapping ownership interests, and, 3.) engineers who built career reputations by contributing important improvements. These factors helped to create an institutional environment that promoted sharing information over trade secrecy or patent protection. Nuvolari concludes, “All in all, it seems quite clear that Watt’s patent had a highly detrimental impact on the rate of innovation in steam technology.” He argues that historians need to be careful not to neglect the work of unheralded inventors and innovators; their contributions may be far more important than those of the much more visible Great Inventors, even if they hold no patents and, perhaps, because they hold no patents. References Macleod, Christine. “James Watt, heroic invention, and the idea of the industrial revolution”, in M. Berg and K. Bruland (eds.), Technological Revolutions in Europe: Historical Perspectives (Edward Elgar, 1998), 96-115. © 2003. Verbatim copying and distribution of this entire article for noncommerical use are permitted provided this notice is preserved.