By Tom Still
The first thing to know about patents is they are not the only indicator of market innovation.
Some entrepreneurs, especially those developing mobile applications, don’t bother to file for patents because the expected life spans of their intellectual property are so short.
For the most part, however, patents are a harbinger of U.S. innovation and economic growth.
A recent report from the Brookings Institution mapped patent activity from 1790 to 2011, with rises and falls that mirrored events such as the Industrial Revolution of the late 19th and early 20th centuries, the Great Depression, World War II and the postindustrial era of invention that began in the mid-1980s.
The Brookings report, which dwelt on patenting and innovation in metro America since 1980, should be instructive for Wisconsin as its policy-makers ponder what it takes to create companies, jobs and wealth.
Read the commentary in the Milwaukee Journal Sentinel here.
The report, Patenting Prosperity: Invention and Economic Performance in the United States and its Metropolitan Areas, ranked the nation’s 358 metro areas on patenting levels and growth. It also noted the firms and organizations responsible for those patents.
The report analyzed how patenting has affected productivity levels in each region, comparing patents – which embody novel inventions – to other sources of economic dynamism, such as educational attainment.
Among its conclusions is that high rates of invention, especially those protected by high-quality patents, help drive regional economic performance. Research universities, a scientifically educated workforce and collaboration are vital related factors, the report noted.
Tale of two cities
Wisconsin was among a relative handful of states with a dozen or more metro areas that showed up on Brookings’ metro patent chart, with Madison and Milwaukee leading the way for the five years beginning in 2007.
It was truly a tale of two cities.
The Milwaukee region showed an average of 776 patents per year, good for 28th among the 358 metro areas, with major corporations such as GE Healthcare, Rockwell Automation, S.C. Johnson, Cooper Technologies, Master Lock and Milwaukee Electric Tool ranking among the top patent producers in 2011.
In short, companies in the region are producing far more patents than the area’s major academic research institutions.
The opposite is true in the Madison region, which averaged 475 patents per year in the same time span, ranking it 47th among the 358 metro areas studied. The Wisconsin Alumni Research Foundation, the independent patent and license arm of the University of Wisconsin-Madison, produces about one-third of the region’s patents.
Companies such as Monsanto, Cummins Filtration, Promega, Fiskars and GE Healthcare produce plenty of patents as well, but there are far fewer such companies in Madison than the Milwaukee region.
In Milwaukee, the patent-producing mix may change because of stepped up activity by the region’s academic R&D institutions.
UW-Milwaukee, the Medical College of Wisconsin and other centers are investing more in research that can lead to inventions – and often doing so in concert with private companies. That trend will be explored at the Feb. 14 Wisconsin Innovation Network meeting in Wauwatosa.
Dependent on UW
The challenge in the Madison area is not to become more dependent on the UW’s patent factory, but to grow or attract innovative private companies.
Similar “college towns” and regions are far less dependent on their major universities for innovation, the Brookings report and other data show.
While 33% of the patents in the Madison region are traced to UW, the percentages are less than half that rate in cities such as Ann Arbor, Mich. (University of Michigan), Salt Lake City (University of Utah), Austin, Texas (University of Texas) and Palo Alto, Calif. (Stanford University).
Why is that so? The private sectors in those regions appear to be more innovative.
Other indicators in the Brookings study show Madison performing well in the percentage of its workforce in technology jobs (6.3%, or 32nd nationally), in the number of workers with a science, technology, engineering or math degree (17%, 21st) and in winning federal small business innovation research grants (49 awards, 25th).
Milwaukee trailed Madison in those categories, but still ranked in the top third in each.
A hidden advantage for Wisconsin is the number of cities with some level of patent activity.
Racine was ranked 84th, followed by Oshkosh (102nd), Sheboygan (107th), Appleton (110th), Green Bay (174th), Eau Claire (181st), Janesville (202nd), La Crosse (206th), Fond du Lac (215th) and Wausau (224th).
Why are patents important? As Thomas Edison famously remarked, “the value of an idea lies in the using of it.”
Innovation is central to economic growth. It must be supported, however, by the right investment capital, human capital and a 21st century infrastructure.
Wisconsin is a state that outperforms much of the nation when it comes to producing patents. That advantage should be leveraged by policies that convert intellectual capital into companies, jobs and wealth.