Who Receives The Economic Benefit Of Patentable Ideas?

In this paper we merge individual income data, firm-level data, patenting data, and IQ data in Finland over the period 1988–2012 to analyze the returns to invention for inventors and their coworkers or stakeholders within the same firm. We find that: (i) inventors collect only 8 percent of the total private return from invention; (ii) entrepreneurs get over 44 percent of the total gains; (iii) blue collar workers get about 26 percent of the gains and the rest goes to white-collar workers. Moreover, entrepreneurs start with significant negative returns prior to the patent application, but their returns subsequently become highly positive.

- Philippe Aghion, Ufuk Akcigit, Ari Hyytinen, andd Otto Toivanen in the new AER. Via Marginal Revolution.

Query how different the situation would be in the U.S. v. Finland, as Finland has a much more egalitarian economic system and corporate culture.