Innovation in the United States is not lacking. It’s just that patents are being registered in less-likely locales, according to researchers from Temple University’s Fox School of Business.
The findings are part of an ongoing research initiative spearheaded by Dr. Ram Mudambi, the Frank M. Speakman Professor of Strategic Management.
The umbrella project is dubbed iBEGIN, or International Business, Economic Geography and Innovation. A segment of the project explores innovation hubs in the United States, undertaking detailed analyses of more than 900 metropolitan areas in the U.S. In one of the first published outcomes of this research effort, Mudambi and his team examined the evolution of Detroit, a mainstay of the global automotive industry for over a century. While Detroit, a downtrodden city, continues to experience manufacturing decline, it is doing well as an innovation center, he said.
“The beauty of innovation is that it never stops,” Mudambi said. “In 1960, the U.S. was the richest country in the world, and Detroit was its richest city. And while the city has been in a continuous state of decline, we found that Detroit’s innovation numbers are very healthy.”
iBEGIN researchers define innovation through patent output, and they say Detroit’s patent output since 1975 has grown at a rate of almost twice the U.S. average. Detroit’s innovative resilience, Mudambi said, is due to its continuing centrality in global innovation networks in the automotive industry. It has maintained this centrality through connectedness to other worldwide centers of excellence in this industry, such as Germany and Japan. Its innovative links to Germany have been rising steadily over the last three decades, while its association with Japan began more recently, but also shows a steep upward trajectory.
Their research also unearthed a clearer picture of the shifting lines of American innovation. Today, Mudambi said, the Sun Belt features the country’s leading innovation hubs like San Francisco; Seattle; Portland, Ore.; Raleigh, N.C.; and Austin, Texas. Though the more traditional centers of innovation excellence in the Rust Belt cities have generally maintained healthy rates of innovation output, they have seen their shares of national innovative output decline. These include cities like New York, Philadelphia, Baltimore, and Chicago.
“In the 19th century and for most of the 20th century, the innovation hotspots were co-located with centers of manufacturing mass production,” Mudambi said. “These were concentrated in the Northeast, the Mid-Atlantic and the Midwest. That’s not the case anymore. We’re seeing the lion’s share of patents being registered in regions dominated by high-knowledge industries. These industries create mainly white-collar positions for people with a bachelor’s degree, at minimum.
“However, what Detroit’s innovative success says about economies everywhere is that the roots of innovation are very deep. Policymakers spend a lot of time worrying about manufacturing. But manufacturing can be very ephemeral and firms often relocate manufacturing plants with very little notice. Innovation is more deeply rooted and, once an innovation center roots itself in an area, it’s much more likely to stick.”
Mudambi said the ongoing iBEGIN research initiative is a collaborative effort, with professionals in centers around the world, including: Denmark’s Copenhagen Business School, Italy’s Politecnico di Milano and University of Venice Ca Foscari, the Indian School of Business, and many others.
In addition to studying innovation in American cities, iBEGIN has ongoing research exploring other contexts. These include country contexts like China, India, Brazil, Portugal, Greece and Korea as well as specialized industry contexts like automobiles, renewable energy and pharmaceuticals.
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