Week 1b: Questions - Introduction to Innovation & Growth #2
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jamesallenevans
changed the title
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The Rise of American Ingenuity outlines a series of facts about inventors and their selectivity, geography, and relationship to the local economic growth. The paper specifically claims that inventors are highly likely to have migrated from their place of birth to another location with wealthier population and more pro-innovation policy, which in turn suggests that a city's income level and policy can attract or reduce its talent pool. Can we observe empirically what types of pro-innovation policies matter the most in attracting innovators? Were they tax-related (i.e. tax reduction), subsidies (i.e. one-time startup funding), gov-backed R&D spending, educational initiatives (i.e. university funding), or others? And do each of these sub-categories interact differently with the city's characteristics (wealth / literary level / existing base of innovators, etc)? This would help local policy-makers design a supportive environment for innovators while spending resources on the policies that yield the highest return. |
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“The Middle-Income Trap” highlights how middle-income countries tend to have higher carbon emissions relative to GDP, and asserts that significant contributors to this trend are legacy policies which result in inefficient production. But another possible factor could be the inability of middle-income countries to transition into the type of industries that efficiently produce GDP relative to carbon emissions due to capital or political constraints. A building full of IT workers that produces $10 million yearly in software products produces fewer carbon emissions than a factory that produces $10 million yearly of steel, but requires a workforce of highly-educated professionals, consistent power supply and Internet infrastructure, etc. And steel still has to be made somewhere - it’s just been offshored into countries that don’t have better options. To what extent does this redistributive offshoring affect carbon efficiency measurements? And to what extent can middle-income countries further offshore to low-income countries? |
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The paper highlights that inventors were more likely to migrate to areas that were conducive to innovation, such as regions with higher population density, better financial development, and more favorable social structures. This points to a historical concentration of innovative activity in specific regions. Today, we observe similar trends with the rise of global tech hubs like Silicon Valley, where access to capital, knowledge networks, and talent clusters are key to success. Given the paper's emphasis on the importance of migration and access to financial resources in fostering innovation, how can we reconcile the need for social and economic mobility with the increasing geographical and economic concentration of high-tech industries in a few global hubs, and what structural changes are necessary to ensure that the benefits of innovation are accessible to a broader, more diverse set of communities? |
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Brain drain from middle income countries to high income "frontier" countries causes a lot of the talent required to help transition a middle income country to a high income one exiting the country. The World Bank articles mentions abstractly that a middle income country should be aware of this and try and utilize the knowledge that the diaspora has, especially knowledge acquired from higher education in their new country. The article implies that rather than disincentivize this drain, we should encourage it and incentivize return migration to utilize the brainpower the immigrants gain. What policy would best accomplish this? |
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“The Rise of American Ingenuity: Innovation and Inventors of the Golden Age” mentions that the Census Bureau has a 72-year lag release rule, so the latest available Census is from 1940 (Page 7). If this study was repeated in the 2090s with data from the 2020s, would you expect any different findings about inventor demographics? Why or why not? For example, demographic characteristics of 1940 and prior decades reflect a dominance of white males, but there have been significant movements toward greater gender and racial equality since then. Additionally, what are other ways we can measure innovation aside from patents? Should we consider only end-products (i.e. patents) or also efforts toward innovation (i.e. research)? |
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The "The Rise of American Ingenuity" paper points out that inventors were more likely to migrate from their home states. The paper argues that inventors tended to migrate to both more urbanized areas and to regions where deposit ratios were higher due to access to finance. The paper finds that 69.1% of innovators moved to more urban states while 30.1% moved to less urban areas. When looking at Figure 10 Panel A; even though the leftmost end of the left tail of the distribution is significantly less dense than the rest of the distribution, it remains an interesting statistic that 30.1% of innovators migrated to less urbanized areas. What were the drivers for the decisions of innovators to move to less urbanized areas, and what were the differences in the innovative output between innovators who moved to less urbanized areas and those who moved to more urbanized areas? |
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Why do middle-income countries struggle to replicate the innovation-driven success of the United States during its "golden age of invention"? Building domestic capabilities to innovate and add value on the global stage is essential for achieving high-income status, yet systemic barriers—such as limited access to education, constrained social mobility, and entrenched incumbency—has hindered this progress. Given the insights from The Rise of American Ingenuity, which identifies a strong causal relationship between patented inventions and long-term economic growth, how can middle-income countries establish a strong foundation for innovation? Specifically, how can they go about fostering talent, enabling creative destruction, and promoting financial development to overcome these barriers and escape the middle-income trap? |
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In the "Rise of American Ingenuity," we see how factors like migration, education, and financial support shaped U.S. innovation during the late 19th and early 20th centuries. Meanwhile, the World Bank describes the middle-income trap as a point where countries struggle to transition from middle-income to high-income status due to weak innovation systems. What lessons from America’s historical innovation boom—such as the movement of inventors to opportunity-rich regions and the development of financial ecosystems—could help middle-income countries escape this trap? How should these strategies be adapted for today’s globalized and tech-driven economy? (Andrew Sun) |
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The part about patent quality over an inventor's life cycle was interesting and I found the results to be somewhat surprising. On one hand, while it makes sense that new inventors would have fresher and more unique ideas, I also would expect older inventors to have a lot more experience and wisdom, therefore able to produce better inventions. Nowadays, I wonder if there exists a trade off between obtaining higher education (like a PhD) and patent quality? Specifically, do highly-educated inventors experience delayed but more impactful innovation peaks compared to those who enter the field earlier (e.g. after their bachelors degree)? Also, is the higher patent quality of new inventors driven primarily by age (falling within the 36–55 peak productivity range) or by the circumstances surrounding their first patents (greater motivation or risk-taking early in their careers)? I think these would be interesting questions to think about, especially in today’s context, to gain a deeper understanding of how to effectively nurture ingenuity. These ideas also relate to the reading on middle-income countries, as both explore the role of innovation and balance between education, timing, and growth. |
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I'm curious about the intention of The Rise of Ingenuity as it relates to modern innovation, which the paper seems to believe is relevant "Establishing the background of the most effective inventors can therefore inform well-targeted innovation policies." (p. 38) In other words (and certainly not to be disrespectful), it seems like fact 1 through 7 are currently widely held perspectives that one can largely acquire from economic intuition and informal observation. I think fact 8 and 9 perhaps require the formal data analysis done in the paper, but, in my view, face limitations in regards to time -- we're twenty years into a new century. I'm in no ways against analyzing the demographics of innovators -- it seems to be increasingly popular in spaces like venture capital. However, due to the period of historical data this paper looked at, it seems hard to apply these specific conclusions to life right now. In many ways, we seems to have corrected the biases the paper points out like family income affecting education before 2024, and therefore, new variables have emerged. What are we to do with the old ones? I'm perhaps answering my own question here -- I'm interested in the idea presented that as inventors become older, their productivity drops off. It seems like designing against this can provide some boosted productivity (maybe?). The paper explains this with a presumption about new inventors, but that feels unsatisfactory. But maybe the intention of the paper is to new facts that are unexplained, but leave room for growth in academia. But again, I wonder about the time this data is from, and its relevance to today. Perhaps I'm taking for granted the formal data analysis necessary that has granted me the ease of discussing fact 1 through 7 without needing to cite a paper every time I bring it up (but again, I don't feel that 2024 was the first time empirical data solidified these facts). And perhaps I should rather just appreciate this piece of historical documentation as a piece of historical documentation. I should say that I am not a history major, so I'm still learning this appreciation. Anyways, I look forward to my eyes being open and seeing a new application (hopefully modernly relevant, but I'll appreciate historical too) for this paper. |
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The "Rise of American Ingenuity" discusses how inventive states have grown faster and have higher social mobility levels. This makes me wonder about the significance of corporations and enterprises. The text mentions that more innovation and patents are developed within corporations and research institutions -- contributing to higher inventive and innovation rates in certain states than others in the past 120 years. These ideas support the 2024 World Development Report's findings. Innovation must supplement investments for a lower income country to develop -- done through attracting corporations and enterprises to encourage innovative energy. My question is how can governments in developing countries create environments that attract corporations and research institutions while ensuring that the benefits of innovation and growth do not lie in the hands of a few -- ensuring that marginalized communities are not exploited? What reforms ensure that increased innovation, technological developments, and job creations are distributed equitably, encouraging inclusive growth? |
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"The Rise of American Ingenuity" highlights how innovation during America’s Golden Age was fueled by educated inventors, supportive migration patterns, and creative destruction, which were strongly linked to economic growth and social mobility. It also examines the interplay between inequality and innovation, revealing a U-shaped relationship where innovation thrived in socially mobile regions with moderate inequality. Meanwhile, the "World Development Report 2024" explores the challenges faced by middle-income countries stuck in the middle-income trap, emphasizing the need for structural transitions from investment to infusion and finally innovation. The report underscores the role of creative destruction and reducing inequality to foster economic growth and innovation. Question: Given the critical role of innovation and social mobility in driving economic growth during America’s Golden Age, as well as the importance of transitioning from infusion to innovation highlighted in the "World Development Report 2024," how can middle-income countries balance creative destruction with policies aimed at reducing inequality to escape the middle-income trap? |
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How can policies around innovation ensure diversity? “The Rise of American Ingenuity” provides a comprehensive examination of the climate of invention between 1880 and 1940. Microscopically, it delves into the background and living conditions of the inventors; macroscopically, it analyzes the relationship between inventiveness and economic growth, income inequality, and social mobility. The Macroscopic analyses tend to affirm the readers that innovation is desirable in society, and the microscopic analyses incentivize readers to think about ways we could foster more innovation in society. However, what is the cost of innovation? We already know that innovation increases income inequality in some situations. How might innovation impact other forms of inequality?
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The article "Rise of American Ingenuity" highlights a strong positive relationship between inventor productivity and wages, with older inventors’ wages being weighted more by both their past successes and future potentials whereas wages of younger inventors are evaluated mainly based on expectation of their productivity in the future. A question that I wonder is: |
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The Rise of American Ingenuity presents a nuanced empirical finding: regions with higher levels of innovation exhibit a U-shaped relationship between top income inequality and innovation activity (page 3). While some inequality may incentivize innovation by rewarding success, excessive inequality could hinder long-term economic growth and social mobility. Furthermore, the paper emphasizes that innovative regions tend to have higher social mobility, suggesting that access to opportunity plays a critical role in fostering innovation. Can we empirically identify specific average thresholds where income inequality transitions from fostering innovation to stifling it? Furthermore, what interventions (e.g., tax policies, subsidies, education funding) have been most successful in mitigating excessive inequality while preserving the positive incentives for innovation? How do these interventions interact with a region’s baseline social mobility or economic structure? This analysis could guide policymakers in balancing inequality and innovation to create a supportive environment for sustained economic growth. |
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The Rise of American Ingenuity discusses a set of empirical facts obtained from the analysis regarding innovation’s relation to economic growth. Particularly, Fact 5 states that “the patents of new inventors received more citations on average…” In an attempt to further dive into this realization, I want to pose the possibility that one might think there shouldn’t be much of a difference in patent citations between new inventors and older inventors with longer records of patenting. If anything, wouldn’t inventors that have been in the game longer perhaps have more industry experience and be better equipped to continue developing further innovations in their area of expertise? What specific factors lead to new inventors having higher citations? Could it be that newer inventors have received a more refreshed or up-to-date educational experience? If not this, then to what do we owe this difference in citation levels between new and experienced inventors? |
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My question is how middle-income countries ought to direct their economies towards innovation when there is strong evidence that human capital accumulation is key to invention (see Akcigit et 2017, Table 3). Developing new technologies requires a sufficient amount of knowledge to create inventions, hence why self-education leads to more patent counts, or why demand for skills rise with income. However, middle-income countries may face stagnating growth precisely because education takes a long time—Akcigit et al cite Jones (2010), who identifies a growth-delaying effect. Add to this the stylized fact that inventors move to places conducive to invention, and this produces the conditions for further "brain drain" or outmigration. Thus, middle-income countries need to attract people with skills or high levels of accumulated human capital to help spark growth faster and stem the loss of human capital by migration. How do they get smarter people to come and stay? |
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The rise of American Ingenuity paper uses trends in patent grants to suggest a correlation between patents and productivity, naturally implying that more patent applications and ultimately grants will create innovations that aggregately increase worker productivity shown through demonstrated increases in GDP. The paper also explores the role of immigration with a short anecdote about Nikola Tesla. After reviewing some of the more recent patent data, particularly pertaining to patents filed by foreign residents, I found that an increasing proportion of patent grants are awarded to foreign residents. What strategies beyond basic capital accumulation and access in the US have contributed to a consolidation of innovators in the US and other similarly developed nations? Are there potential downsides like capital outflows through remittances that we should consider, or does consolidation of innovation in the US compensate for these risks? |
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The Rise of American Ingenuity Highlights innovation spurring and growing alongside/based off further innovation, economic growth/disparity, and social-hubs: using "state-level patents as a proxy measure of innovation. However, I feel that the concept may be a little too generalized. Mass progression in history tended to be accompanied with foundational shifts(Darwin's Natural Selection, Accepting microorganisms as the cause for disease, etc). Rather than associating concepts like the number of patents to innovative, economic, and social levels, I want to see if there are any differentiating innovations that truly changed the way innovators operated entirely(lightbulbs for more working time in a day, telegraph for long distance communication). |
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Rethinking Innovation Models for Generational Synergy Given that younger inventors tend to produce higher quality patents and experience "creative destruction", how can educational systems and corporate R&D structures be redesigned to capitalize on youthful creativity without neglecting the value of experienced innovators? The paper’s findings on the life cycle of inventors reveal that younger innovators are more likely to produce high-impact patents, while older inventors face declining productivity. However, experienced innovators bring accumulated knowledge and mentoring capacity. This suggests a need for dual innovation models education systems emphasizing creativity and experimentation for younger cohorts and corporate R&D policies that integrate mentorship programs to harness the wisdom of senior inventors. In developing countries, however, these dynamics may differ. Entrenched incumbency and industrial hierarchies often block younger talent from emerging, stifling creative destruction. How can such economies dismantle these barriers and create inclusive environments where innovation thrives across generations is also a concern. |
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In the first overview section of the World Development Report 2024: Middle Income Trap, the World Bank describes the various roles incumbents can play in creative destruction, and more broadly, economic progress. Incumbents include well-known firms, established energy sources, technologically forward nations, or elites in society. Various frameworks about incumbents and the value that they add (or detract) inform how middle-income countries should balance the forces of creation, destruction, and preservation. The report notes that prioritizing creation is difficult for middle-income countries because resources tend not to be allocated effectively. At the same time, creation is a key factor to create a thriving and growing higher income economy. In light of this, what are some advantages and disadvantages for the other two forces in this triangle: destruction and preservation? More specifically, for middle-income countries, what should we keep in mind when weakening preservation forces and destroying outdated policies? |
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Knowledge spillovers and value capture in an interconnected, digital world Fact 7 in “The Rise of American Ingenuity” posits that more inventive states and sectors grew faster on average. This fact is supported by the assertion that “although the technology embodied in an individual patent might diffuse with some time lag, the spillovers created during its production should be highly localized” (p. 29). While this reasoning is intuitive for inventions in more fragmented societies, does today’s interconnected, digitized world require new models for knowledge spillovers and value capture from innovation? For example, how might we consider AI innovations in San Francisco spawning datacenter buildouts in Virginia? Or new patents for semiconductor process technology in Taiwan spurring new chip designs in the U.S.? Knowledge is transmitted in days instead of years across regions, and value chains are much more integrated. Does value still accrue predominantly within the locality? |
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In The Rise of American Ingenuity: |
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In Chapter 6 of the World Bank Group World Development Report 2024, it is noted that "many G20 economies are introducing incentives for producing and deploying low-carbon technologies. Some measures may unintentionally preserve enterprises in advanced economies while undermining those in middle-income countries." Given the diverse characteristics of countries—ranging from natural resource endowments and economic status to political regimes—within international organizations, uniform policy incentives can have varied and sometimes unintended effects across nations. How can international organizations like the G20 collaborate to address these unintended consequences while pursuing the shared goal of fostering global innovation and growth? |
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Regarding The Rise of American Ingenuity:
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In The Rise of Academic Ingenuity, the authors use citations per paper to measure quality. Is this conclusion premature? It relies on the assumption that a patent will receive a constant share of its citations τ years after it is granted, regardless of the grant year. Today, papers can be accessed and cited far more easily and quickly compared to previous decades; working papers can often be cited even before official publication. Modern papers can accrue citations while they are still highly relevant to ongoing research. In contrast, papers published decades ago had to wait longer to be accessed and cited, potentially after their relevance peaked. Keeping constant the quality of paper, and taking into account the increase in citations, modern papers still are advantaged by being so easily circulated and cited during their most relevant point. This might influence the "quality" measure the authors use. |
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Based on The Rise of American Ingenuity: Innovation and Inventors of the Golden Age, in what ways did the socio-economic and technological conditions of post-Civil War America catalyze the wave of innovation during the 'Golden Age' of American ingenuity? How did the inventions of this era not only transform industrial practices but also reshape the national identity and global perception of the United States? Additionally, how did the interplay between government policies, industrial capital, and individual entrepreneurship influence the pace and direction of technological advancements, and to what extent did these innovations contribute to the rise of American exceptionalism in the late 19th and early 20th centuries? |
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The Rise of American Ingenuity: Innovation and Inventors, and The World Development Report 2024 both introduce an intriguing topic: Creative Destruction. The Rise of American Ingenuity uses data to identify theories of creative destruction where new ideas outpace incumbents, as young inventors followed the trend of producing higher-quality patents, which were often cited more frequently than those of incumbent and late-career innovators. The paper identifies this cycle as a "type of churning activity [that] can play an important role in the growth development process", a sentiment that is echoed by The World Development Report from 2024, which states that “The destruction of outdated arrangements—enterprises, jobs, technologies, private contracts, policies, and public institutions—is essential to create value through investment and reallocation”. The World Development Report also provides the example of the high-carbon industry, where incumbents put up barriers to the entry of low-carbon technologies because they have strong incentives to maintain the status quo and limit competition. This raises a thoughtful question for me: in this era of increasing technological competition and the centralized nature of advancements like AI, is there a risk of a declining trend in creative destruction as incumbent firms, like those in the carbon industry, actively work to disrupt the natural and necessary process of innovation? How can societies foster the creative destruction needed to drive growth and innovation while mitigating the resistance of entrenched incumbents, especially in industries where a status quo is deeply engrained and the stakes of technological transitions, like AI, are very high? |
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Given the three productive steps of investment, infusion, and innovation outlined in the World Bank essay, and the assertion that innovation is positively correlated with economic progress from Akcigit, Grigsby, and Nicholas, how should middle-income countries prioritize future investment and development for sustainable growth? Should middle-income countries prioritize the infusion of existing innovations in higher-income countries to build up current infrastructure, providing the foundations for future inter-country innovation, or should inter-country innovation be pursued as a foundation for developing productive infrastructure? |
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I think weak governance is a major roadblock for middle-income countries trying to transition to innovation-driven growth. Corruption and inefficiency make it hard to invest in long-term improvements like education or infrastructure. I feel institutional reforms should come first, even before pushing for technological advancements, because without a solid foundation, innovations might only benefit a small portion of society. That said, reforms are tough—they need political commitment and public trust, which aren’t always easy to achieve. Still, they’re essential for real progress. So, my questions are: How do weak governance structures in middle-income countries exacerbate the challenges of transitioning from resource-driven to innovation-led economies? Could prioritizing institutional reforms over technological advancements create more sustainable growth pathways? |
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Brain drain from middle income countries to high income "frontier" countries causes a lot of the talent required to help transition a middle income country to a high income one exiting the country. The World Bank articles mentions abstractly that a middle income country should be aware of this and try to utilize the knowledge that the diaspora has, especially knowledge acquired from higher education in their new country. The article implies that rather than disincentivize this drain, we should encourage it and incentivize return migration to utilize the brainpower the immigrants gain. What policy would best accomplish this? Would it be offering high paying or prestigious jobs to educated return migrants? Or some other incentive that offers generous opportunities in housing, education, and/or entrepreneurial efforts for return migrants? |
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How did the factors driving increased patenting activity during the golden age of U.S. innovation (1880–1940)—such as education, migration, and financial development—not only contribute to economic growth but also influence patterns of social mobility? I’m particularly interested in understanding how these elements created opportunities for individuals to move up the socioeconomic ladder in innovative regions. |
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How does the relationship between inventor background (like education level, parental income, etc) and their productivity level reflect systemic barriers vs. individual capabilities and how could regional specific innovation environments exacerbate or reduce these effects in the long run? |
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Based on the findings discussed in Section 4, particularly the graphs in Figures 6 and 7, which indicate that inventors during the golden age of innovation were most productive between the ages of 36 and 55, how might contemporary academic and societal pressures that accelerate early career preparation (e.g., competitive education systems and early exposure to technology) alter the age range of peak productivity for entrepreneurs when using data from more recent years? Do you think this shift could lead to higher rates of innovation among younger age groups and overall economic success, or could it lead to different trade-offs, such as burnout or lead to limited creative freedom? |
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