This is a very nice piece of work. Unfortunately, the major conclusion I draw from it is that there is much slippage between numbers of patents on the one hand and true economically relevant Innovation on the other. So I cannot see what conclusions to raw from what is a lot of hard and ingenious work: Bryan Kelly, Dimitris Papanikolaou, Amit Seru, and Matt Taddy: Measuring Technological Innovation over the Long Run: "We use textual analysis of high-dimensional data from patent documents to create new indicators of technological innovation. We identify significant patents based on textual similarity of a given patent to previous and subsequent work: these patents are distinct from previous work but are related to subsequent innovations...

...Our measure of patent significance is predictive of future citations and correlates strongly with measures of market value. We identify breakthrough innovations as the most significant patents – those in the right tail of our measure – to construct indices of technological change at the aggregate, sectoral, and firm level. Our technology indices span two centuries (1840-2010) and cover innovation by private and public firms, as well as non-profit organizations and the US government. These indices capture the evolution of technological waves over a long time span and are strong predictors of productivity at the aggregate, sectoral, and firm level...


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