The Inventive, the Educated, and the Creative: How Do They Affect Metropolitan Productivity?
AbstractA longstanding research tradition assumes that endogenous technological development increases regional productivity. It has been assumed that measures of regional patenting activity or human capital are an adequate way to capture the endogenous creation of new ideas that result in productivity improvements. This process has been conceived as occurring in two stages. First, an invention or innovation is generated, and then it is developed and commercialized to create benefits for the individual or firm owning the idea. Typically these steps are combined into a single model of the “invention in/productivity out” variety. Using data on Gross Metropolitan Product per worker and on inventors, educational attainment, and creative workers (together with other important socio-economic controls), we unpack the model back to the two-step process and use a SEM modeling framework to investigate the relationships among inventive activity and potential inventors, regional technology levels, and regional productivity outcomes. Our results show almost no significant direct relationship between invention and productivity, except through technology. Clearly, the simplification of the “invention in/productivity out” model does not hold, which supports other work that questions the use of patents and patenting related measures as meaningful innovation inputs to processes that generate regional productivity and productivity gains. We also find that the most effective measure of regional inventive capacity, in terms of its effect on technology, productivity, and productivity growth is the share of the workforce engaged in creative activities.
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Bibliographic InfoPaper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 263.
Length: 40 pages
Date of creation: 20 Jan 2012
Date of revision:
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Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
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More information through EDIRC
Innovation; Productivity; Regional Technology; Patents; Human Capital; Creative Class;
Find related papers by JEL classification:
- C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- Z10 - Other Special Topics - - Cultural Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-02-01 (All new papers)
- NEP-EFF-2012-02-01 (Efficiency & Productivity)
- NEP-GEO-2012-02-01 (Economic Geography)
- NEP-HRM-2012-02-01 (Human Capital & Human Resource Management)
- NEP-INO-2012-02-01 (Innovation)
- NEP-IPR-2012-02-01 (Intellectual Property Rights)
- NEP-SBM-2012-02-01 (Small Business Management)
- NEP-URE-2012-02-01 (Urban & Real Estate Economics)
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