Innovation and Trade

Found this interesting piece on graphics in the Atlantic Cities on innovations and their geographical spread/concentration.It analyses the OECD data on patented innovations.

The findings are a telling summation of the skewed nature of patents/innovation concentration across the globe. Does this have a co-relation to international trade or the fact that all the major trading powers have been at the forefront of innovation and patenting?

The map above shows that E.U. has the largest share with roughly 30 percent of global patents, followed closely by the United States, and then Japan and China.

The second map shows the number of global patents for states, provinces, and countries. Note the substantial bubbles around California and the East Coast in the U.S., especially Massachusetts; Northern Europe and Scandinavia; and Japan, South Korea and China in Asia. The concentration in India seems to be the southern regions - especially Mumbai, Hyderabad and Bangalore.

This map charts patents for the world’s major city-regions. Again the pattern of concentration, or spikiness, is striking. The United States has major concentrations on the East and West coasts and the Midwest. Patenting is even more concentrated in Europe and Asia. In Europe there are major clusters in Southern Germany, Switzerland, Southern Sweden, Finland, the greater Paris region, and Rhone-Alpes. Patenting in Asia is clustered in and around Tokyo and Osaka, Japan; Seoul, Korea; Shanghai and Beijing in China, and Australia’s East and West coasts. And again, huge swaths of the world are completely blank.

With such concentration of innovations even within countries, Jonathan Rothwell argues  in The New Republic against the trend of "national" innovation policies. Innovations and patents are closely connected to industrialisation and economic growth. Another paper titled "The Effect of Technological Innovation on International Trade: A Nonlinear Approach" studying the impact of technological innovations on exports establishes the co-relation between innovation and increased exports.  The countries dominating the world of patents, unsurprisingly dominate world trade too. It is not surprising to see only China and Japan dominate in patents in the Asian region.