The Creativity Decline: Evidence from US Patents

Aakash Kalyani

No 2024-008, Working Papers from Federal Reserve Bank of St. Louis

Abstract: Economists have long struggled to understand why aggregate productivity growth has dropped in recent decades while the number of new patents filed has steadily increased. I offer an explanation for this puzzling divergence: the creativity embodied in US patents has dropped dramatically over time. To separate creative from derivative patents, I develop a novel, text-based measure of patent creativity: the share of technical terminology that did not appear in previous patents. I show that only creative and not derivative patents are associated with significant improvements in firm level productivity. Using the measure, I show that inventors on average file creative patents upon entry, and file derivative patents with more experience. I embed this life-cycle of creativity in a growth model with endogenous creation and imitation of technologies. In this model, falling population growth explains 27% of the observed decline in patent creativity, 30% of the slowdown in productivity growth, and 64% of the increase in patenting.

Keywords: creativity; innovation; productivity; patents; text-as-data; demographics (search for similar items in EconPapers)
Pages: 61 pages
Date: 2024-04-02
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.20955/wp.2024.008 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:103939

Ordering information: This working paper can be ordered from

DOI: 10.20955/wp.2024.008

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of St. Louis Contact information at EDIRC.
Bibliographic data for series maintained by Scott St. Louis ().