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Mark E. Schweitzer |

Senior Vice President and Director of Research

Mark E. Schweitzer

Mark Schweitzer leads the Bank's Research Department, setting the direction for economic research, selecting and developing staff, and briefing the Bank president prior to meetings of the Federal Open Market Committee of the Federal Reserve System. Dr. Schweitzer’s own research has focused on the macroeconomic impact of labor market developments and the identification of factors contributing to regional economic growth.

 

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03.08.07

Economic Trends

Regional Patenting Activity

Brian Rudick and Mark Schweitzer

In our Annual Report of last year, we reported evidence that innovation is extremely important for state economic development and that patenting activity can help explain differences in state per capita incomes. Undoubtedly, patenting activity is important for the economic development of smaller areas as well. Here we examine patenting activity in the Fourth District and its metropolitan areas. (Note that a patent’s origin is based on the inventor’s residence, not the company’s location.)

Patenting in the Fourth District

Over the past 30 years, patenting activity in the Fourth District has remained fairly steady; only 9 percent more patents were issued in 2003 than in 1975. By contrast, in the United States as a whole, 90 percent more utility patents were issued in 2003 than in 1975.

The greater growth in U.S. patenting activity is partly explained, however, by higher population growth. If we look at the number of patents issued on a per capita basis, we see that the District no longer maintains the edge in per capita patent production that it had in 1975, but that the region still produces about as many patents per million people as the United States as a whole. From 1975 to 2003, per capita patents in the region grew 5 percent, to 286 patents per million people, compared to 299 patents per million people for the nation.

Top Patenting Industries, 1999-2003

Description Total district patents
Professional and scientific instruments (38, except 3825)
3,813
Rubber and miscellaneous plastics products (30)
3,104
Fabricated metal products (34, except 3461, 3463, and 348)
3,041
General industrial machinery and equipment (356)
2,337
Electronic components and accessories and communications equipment (366, 367)
2,016

Note: Numbers in parentheses are SIC codes for the industry.
Sources: U.S. Department of Commerce, U. S. Patent and Trademark Office;
Cleveland State University, Center for Economic Development; and authors’
calculations.

In the past five years, the District has produced over 3,000 patents, which can be used in three industries: professional and scientific instruments, rubber and miscellaneous plastics products, and fabricated metal products. The District also produces a large number of patents that have applications in industrial machinery and electronic components.

District Industry’s Share of Patents, 1999-2003

Description Percent of U.S. patents
Railroad equipment (374)
21.1
Soaps, detergents, cleaners, perfumes, cosmetics, and toiletries (284)
19.2
Primary ferrous products (331, 332, 3399, 3462)
18.4
Paints, varnishes, lacquers, enamels, and allied products (285)
18.4
Primary and secondary nonferrous metals (333-336, 3463, 339, except 3399)
17.2

Note: Numbers in parentheses are SIC codes for the industry.
Sources: U.S. Department of Commerce, U. S. Patent and Trademark Office;
Cleveland State University, Center for Economic Development; and authors’
calculations.

The industries for which the District produces the most patents are not necessarily those in which the District specializes. Over the past five years, the District has produced over one-fifth of all U.S. patents relating to railroad equipment, with Delphi, Westinghouse Air Brake, and General Electric leading the charge. The District also produces a high concentration of patents that can be used for household products (Proctor and Gamble, Steris), paints and allied products (Goodyear, Bridgestone) and metals (GE, Alcoa).

Patenting in District MSAs

Patenting activity at the metropolitan level varied considerably. Columbus produces fewer patents per million people than does the United States as a whole. However, Cincinnati produces almost twice as many patents per million people than the United States. In general, per capita patenting activity has been trending upward in the four District MSAs since the early 1980s.

Top Patenting Organizations by MSA, 1999-2003

MSA rank Cleveland Cincinnati Columbus Pittsburgh
1 General Electric (172) Proctor and Gamble (1,640) Owens-Corning Fiberglass (186) PPG Industries Ohio (338)
2 Lubrizol (149) General Electric (879) Abbott Laboratories (109) Eaton (234)
3 Goodyear (100) Ethicon Endo-Surgery (170) Arthrocare (69) Alcoa (160)

Note: Number in parentheses is total utility patents for time period.
Sources: U.S. Department of Commerce, U. S. Patent and Trademark Office; and authors’ calculations.

A look at the top patenting organizations in the District’s four largest MSAs produces some very well-known names. General Electric was among top producers in two of these MSAs (Cleveland and Cincinnati) over the last five years. Proctor and Gamble (Cincinnati), Owens-Corning Fiberglass (Columbus), and PPG Industries Ohio (Pittsburgh) led their metro areas in patent production over the time period.

Top Patenting Industries by MSA, 1999-2003

MSA rank Cleveland Cincinnati Columbus Pittsburgh
1 Professional and scientific instruments (11.1) Professional and scientific instruments (12.2) Professional and scientific instruments (11.7) Professional and scientific instruments (11.3)
2 Fabricated metal products (8.6) Fabricated metal products (7.6) Rubber and miscellaneous plastics products (8.7) Electronic components and accessories and communications equipment (7.8)
3 Rubber and miscellaneous plastics products (8.6) General industrial machinery and equipment (6.9) Fabricated metal products (7.7) Rubber and miscellaneous plastics products (7.7)

Note: Number in parentheses is percent of total MSA patents during the time period.
Sources: U.S. Department of Commerce, U. S. Patent and Trademark Office; Cleveland State University, Center for Economic Development; and authors’ calculations.

Similar to the District, the four largest MSAs all have a large share of patents that can be used in the professional and scientific instruments industry. Many patents are also produced for use in the fabricated metals and rubber products industries. Pittsburgh produces a considerable share (7.8 percent) of its patents for use in the electronics and communications equipment industry.