Monday, August 23, 2010
The above chart shows the number of utility patents applied for and granted from 1900-2009. (Utility patents are the regular kind used for new inventions).
I highlight three regions of significant economic distress. The first is the great depression, in which patents dropped considerably. The second is the 1970s oil shock era, in which patent application growth stopped - applications didn't drop, but patents granted did. The third region is the great recession of recent years, in which patent growth also stopped, but, at least as of 2009, the number of applications has not dropped significantly.
Note that there is significant lag between the two curves since it generally takes the patent office a few years to rule on a particular patent.
I imagine the big growth of patents since the early 1980s has to do with the rise of the venture capital system, giving more incentive to create patents (since VCs typically require them of the start-ups they fund). The patent office has been getting more strict about how many of this enlarged number of patents it grants in recent years, meaning that the red line levelled off in the aughties.