The Big Bang Theory of Economic Development
Move over Keynesian and classic supply-side theories of economics. Here comes revenge of the nerds and the geek squad. A recent Brookings Institution Report finds that patents are very relevant to an area's economic health and growth. Patents, the product of scientists and engineers (sometimes affectionately referred to as geeks), protect inventions. However, patents, alone, do not provide a guarantee that patents generated in a specific area will actually lead to wealth in that area. What is needed is an environment or ecosystem which includes patents as part of a system for economic growth.
Yet there is no guarantee that patents generated in a specific location will generate wealth in that same location—a set of conditions (the presence of a skilled and diverse labor force, an “ecosystem” of businesses providing complementary goods and services, financing and marketing capabilities among them) have to be met for invention to be commercialized. Research has established that patents are correlated with economic growth across and within the same country over time. Brookings Institution Report
The Report confirms what many commentators have opined as well as the thesis of one of my prior articles, "Biotechnology fuels drive for economic development," Medical News, May 2011 pages 12-13. Several factors are necessary for realizing economic development including strong educational institutions, government investment (local, state and national); and trained professional such as intellectual property attorneys, marketer and venture capitalists. Patent attorneys, scientists and enginers, who are also lawyers, are an invaluable resource that work with inventors (researchers, scientists, engineers), companies and investors. These attorneys take inventors' work from the lab to the Patent Office.
In conclusion, a healthy growing economy relies on scientists and engineers supported by strong universities and government invectives and corporate investment to create an entrepreneurial ecosystem that functions as an engine of economic growth.Th
© Stephen J. Weyer, Stites & Harbison, PLLC, 2013
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