A common way to consider technological innovation and growth comes from patents. Today's post uses an unobserved components analysis to examine the level, trend, and cycle of US utility patents since the early 1800's. Early patent growth seems quite normal growing slowly with a few eras of slightly more inventions (WWII for example):
However, the pattern appears remarkable different from the 1990's on. The exponential growth can be traced to the beginnings of the computer age and in fact the decline in the early 2000's was a direct response to the "dot com" bubble. In addition the volatility of both the trend and the cycle appears increase over the past 2 decades.
Are we really adding that much technology to our lives? Economists typically think of technology and innovations as driving increases in standards of living. If so we should expect sharp increases in standards of living in the coming years. However, many patents created today cover mundane and/or incremental improvement to an existing technology or tool. For example, consider the light bulb, refrigeration and internal combustion engines. All had huge implications for the way we lived our lives and created dramatic improvements. Does a patent on how an app icon bounces or the precise way a phone's edge is beveled come anywhere close to that standard?
That's not to say that with the dramatic increase in patents we are not going to discover some grand invention that changes the world as we know it (can I get a Star Trek transporter please?). However, it does seem that patents are losing their usefulness as a measure of technological progress. In the mean time we can keep hoping. Energize!