Evolution of the Geography of Innovation: Evidence from Patent Data

This paper examines the evolution of patent activities across U.S. states from 1963 to 1997. Several patterns are uncovered. First, there is invention catch‐up by some lagging states. Second, the evidence is consistent with knowledge diffusion. Third, leading states unable to reinvent themselves lose their leads. Fourth, catch‐up can be across a diverse field of activities or focused on select activities. State patent growth is positively correlated to industry R&D and a variable capturing labor skill and infrastructure quality. These provide rationale for state policy makers to increase support to programs that enhance labor skill (e.g., education) and infrastructure quality.