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The Decline of the Independent Inventor: A Schumpterian Story?

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  • Naomi R. Lamoreaux
  • Kenneth L. Sokoloff

Abstract

Joseph Schumpeter argued in Capitalism, Socialism and Democracy that the rise of large firms%u2019 investments in in-house R&D spelled the doom of the entrepreneurial innovator. We explore this idea by analyzing the career patterns of successive cohorts of highly productive inventors from the late nineteenth and early twentieth centuries. We find that over time highly productive inventors were increasingly likely to form long-term attachments with firms. In the Northeast, these attachments seem to have taken the form of employment positions within large firms, but in the Midwest inventors were more likely to become principals in firms bearing their names. Entrepreneurship, therefore, was by no means dead, but the increasing capital requirements%u2014both financial and human%u2014for effective invention and the need for inventors to establish a reputation before they could attract support made it more difficult for creative people to pursue careers as inventors. The relative numbers of highly productive inventors in the population correspondingly decreased, as did rates of patenting per capita.

Suggested Citation

  • Naomi R. Lamoreaux & Kenneth L. Sokoloff, 2005. "The Decline of the Independent Inventor: A Schumpterian Story?," NBER Working Papers 11654, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:11654
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    Cited by:

    1. Toivanen, Otto & Väänänen, Lotta, 2010. "Returns to Inventors," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 309, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    2. repec:wsi:ijimxx:v:14:y:2010:i:02:n:s1363919610002635 is not listed on IDEAS
    3. Nagaoka, Sadao & Motohashi, Kazuyuki & Goto, Akira, 2010. "Patent Statistics as an Innovation Indicator," Handbook of the Economics of Innovation, Elsevier.

    More about this item

    JEL classification:

    • N - Economic History
    • O - Economic Development, Innovation, Technological Change, and Growth

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