Innovation is widely viewed as the engine of economic growth. As a result, many policies have been proposed to spur innovation, ranging from tax cuts to investments in STEM (science, technology, engineering, and math) education. Unfortunately, the effectiveness of such policies is unclear because we know relatively little about the factors that induce people to become inventors. Who are America’s most successful inventors and what can we learn from their experiences in designing policies to stimulate innovation?
We study the lives of more than one million inventors in the United States using a new de-identified database linking patent records to tax and school district records. Tracking these individuals from birth onward, we identify the key factors that determine who becomes an inventor, as measured by filing a patent.1 Our results shed light on what policies can be most effective in increasing innovation, showing in particular that increasing exposure to innovation among women, minorities, and children from low-income families may have greater potential to spark innovation and growth than traditional approaches such as reducing tax rates.
The opinions expressed in this paper are those of the authors alone and do not necessarily reflect the views of the Internal Revenue Service, U.S. Department of the Treasury, or the National Institutes of Health.