Economist Daniel Wilson of the Federal Reserve Bank in San Francisco takes a look at the relatively slow growth in patents issued in the US as compared to the growth in spending on research and development.
Simple patent counts miss some dimensions of technological change. And it appears that these other dimensions actually have increased in recent decades.
First, there is tentative evidence that firms are increasingly moving away from patents as a means of appropriating returns from their R&D investments and toward other means, such as secrecy.
Second, the number of citations received by the average patent has increased over the last couple of decades, suggesting that the social value of the average patent has increased.
The possibility that more and more technological change is not being patented and that the “size” of the technological change codified in the average patent is increasing leaves open the possibility that the relationship between research input and true technology output has not changed over time.