The Demographics of Innovation

Chapter 8The United States of America

The emergence of the United States as a superpower has truly changed world history during the last century. The country has been hugely successful in terms of innovation.

A History of Innovation in the United States

By the late 1800s, the United States had already exceeded France, Germany, and the United Kingdom in the number of patents awarded, as shown in Figure 8.1. The most important innovations—such as electric light, telegraph, telephone, and mass-produced automobiles—were invented or first became commercially successful in the United States. In 1870, the per capita GDP of the United States was 30% lower than that of the United Kingdom, but by 1929, the per capita GDP of the United States was 30% higher than that of the United Kingdom. This growth was driven mostly by innovation.

Figure 8.1 Patents statistics for France, the United Kingdom, the United States, and Germany, 1838–1945

Data Source: B. Khan, An Economic History of Patent Institutions. EH.net Encyclopedia (ed. R. Whaples), March 16, 2008.

This sudden rise in U.S. innovation was quite surprising, because in the 1860s, the United States had only just emerged from the Civil War. European countries, such as the United Kingdom, France, and especially Germany, seemed to have all the advantages required to succeed in innovation. They were much more industrialized, had the best ...