Foreword

Abstract

This special issue of the Journal of Industrial Economics (JIE) on ‘Patents, Entrepreneurship and Innovation' began as the brainchild of Professor Mark Schankerman (London School of Economics) in 2010. Mark has been advocate, manager, and intellectual workhorse on this project since its inception. The completed volume of topical and noteworthy pieces included in these pages would not have been possible without his substantial efforts. Few subjects today deserve robust economic analysis more keenly than innovation and entrepreneurship, and few issues spark more vigorous debate than the role that intellectual property rights play in increasing, or impairing, economic performance and social welfare. Innovation and the deployment of new technology drive economic growth, and recent scholarship demonstrates that intangible assets now account for more than half the business outputs in several of the largest industrialized economies. Moreover, economic research shows that young startup companies contribute a large share of employment growth, and are themselves an important determinant of dynamism in capitalist economies. It is no surprise, then, that one of the institutions used by governments to encourage innovation—patents—should receive increased scrutiny in the scholarly community. Is the patent system working to encourage growth, or does it operate to impede it? Are there elements of design, especially in patent offices and enforcing courts, which can be improved to fit better with the technological and social realities of the 21st Century? And how should we understand entry by and competition among modern firms, especially at the technology and product-market level, within our system of patent prosecution and litigation? Are reforms desirable, or even possible? These are the larger set of questions with which this special issue deals. It was a desire to shed more light on these important questions that led the U.S. Patent and Trademark Office (USPTO), a bureau in the Department of Commerce, to become involved in this project, and to support the JIE and Professor Schankerman in pursuing this volume. The process that led to the articles included here began with a widely-distributed call for papers, and a special two-day workshop held in May, 2012, at the Global Intellectual Property Academy at the USPTO headquarters in Alexandria, Virginia. The Honorable David Kappos, Director of the USPTO, made formal comments opening the workshop, after which authors, academic discussants, and government officials took an active part in discussions aimed at contributing to the development of the papers. After revisions, authors were invited to submit to the JIE and undergo the normal vigorous peer review process and editorial assessments. In my (former) role as chief economist at the USPTO, I saw this project as the type of activity that the USPTO ought to support. In this era of declining budgets, and increasing institutional constraints on public entities everywhere, governments cannot lose sight of the need to invest in research, and in developing better theory and evidence on how the institutions meant to support the innovation system and entrepreneurship environment are operating. This is particularly fitting for patent offices, which have in the past too infrequently paid sufficient attention to information and ideas on system design originating from outside their walls. It is for these reasons that efforts like this special issue are necessary to contribute understanding on critical matters of the day—to the scholarly community, the public and policy makers alike. It is with great appreciation of the authors' efforts that I commend this volume to you, and thank both Professor Schankerman and former JIE managing editor, Dr. Pierre Régibeau, as well as the Ewing Marion Kauffman Foundation for their co-sponsorship of the Alexandria workshop.