Long-term change in the organization of inventive activity

Relying on a quantitative analysis of the patenting and assignment behavior of inventors, we highlight the evolution of institutions that encouraged trade in technology and a growing division of labor between those who invented new technologies and those who exploited them commercially over the nineteenth and early-twentieth centuries. At the heart of this change in the organization of inventive activity was a set of familiar developments which had significant consequences for the supply and demand of inventions. On the supply side, the growing complexity and capital intensity of technology raised the amount of human and physical capital required for effective invention, making it increasingly desirable for individuals involved in this activity to specialize. On the demand side, the growing competitiveness of product markets induced firms to purchase or otherwise obtain the rights to technologies developed by others. These increasing incentives to differentiate the task of invention from that of commercializing new technologies depended for their realization upon the development of markets and other types of organizational supports for trade in technology. The evidence suggests that the necessary institutions evolved first in those regions of the country where early patenting activity had already been concentrated. A self-reinforcing process whereby high rates of inventive activity encouraged the evolution of a market for technology, which in turn encouraged greater specialization and productivity at invention as individuals found it increasingly feasible to sell and license their discoveries, appears to have been operating. This market trade in technological information was an important contributor to the achievement of a high level of specialization at invention well before the rise of large-scale research laboratories in the twentieth century.

National policies for technical change: Where are the increasing returns to economic research?

Improvements over the past 30 years in statistical data, analysis, and related theory have strengthened the basis for science and technology policy by confirming the importance of technical change in national economic performance. But two important features of scientific and technological activities in the Organization for Economic Cooperation and Development countries are still not addressed adequately in mainstream economics: (i) the justification of public funding for basic research and (ii) persistent international differences in investment in research and development and related activities. In addition, one major gap is now emerging in our systems of empirical measurement—the development of software technology, especially in the service sector. There are therefore dangers of diminishing returns to the usefulness of economic research, which continues to rely completely on established theory and established statistical sources. Alternative propositions that deserve serious consideration are: (i) the economic usefulness of basic research is in the provision of (mainly tacit) skills rather than codified and applicable information; (ii) in developing and exploiting technological opportunities, institutional competencies are just as important as the incentive structures that they face; and (iii) software technology developed in traditional service sectors may now be a more important locus of technical change than software technology developed in “high-tech” manufacturing.

Global and local implications of biotechnology and climate change for future food supplies

The development of improved technology for agricultural production and its diffusion to farmers is a process requiring investment and time. A large number of studies of this process have been undertaken. The findings of these studies have been incorporated into a quantitative policy model projecting supplies of commodities (in terms of area and crop yields), equilibrium prices, and international trade volumes to the year 2020. These projections show that a “global food crisis,” as would be manifested in high commodity prices, is unlikely to occur. The same projections show, however, that in many countries, “local food crisis,” as manifested in low agricultural incomes and associated low food consumption in the presence of low food prices, will occur. Simulations show that delays in the diffusion of modern biotechnology research capabilities to developing countries will exacerbate local food crises. Similarly, global climate change will also exacerbate these crises, accentuating the importance of bringing strengthened research capabilities to developing countries.