Fact of the Week: After Japan Opened a High-Speed Railway Line Between Tokyo and Nagano, Patenting by Businesses Along the Line Increased 5 Percent

Ever-expanding and more efficient transportation systems have long supported economic growth across the globe, and in recent years economists have begun to quantify the impact of these systems on innovation. A recent working paper by Japanese economists finds that after Japan opened a high-speed railway line between Tokyo and Nagano in 1997, thereby dramatically reducing the commuting time between the two cities 140 miles apart, patenting by businesses along the route increased by 5 percent.

The economists explain that more efficient transportation systems allow knowledge typically concentrated in large metropolitan areas such as Tokyo to more easily spread among businesses along these networks. For example, the reduced travel time may incentivize scientists and engineers in Tokyo to accept a collaboration project with a business located far away, because it is easily accessible by rail.