Fact of the Week: The San Jose, California Metro area Raised its Patent-to-Population Ratio by 131 Percent in the 1990s

Silicon Valley has been a massive contributor to U.S. innovation at least as far back as the 1980s, according to a recent economic study. The study compared innovation patterns across 279 U.S. cities in the 1980s and 1990s—and the San Jose regions stood far apart from the rest. It increased its patent-to-population ratio by 84 percent from 1980 to 1990, more than twice the innovation growth rate of the second-place metro regions. From 1990 to 2000, the regions’s patent-to-population ratio increased by another 131 percent, 40 percentage points faster growth than anywhere else.

In addition to highlighting Silicon Valley’s tremendous innovation impact, the study also demonstrates that patenting activities from 1990 to 2000 became increasingly concentrated among a number of U.S. metropolitan regionss as compared to 1980 to 1990. The study’s authors suggest that decreasing communication costs arising from the IT revolution allowed innovators to more easily transfer knowledge in regionss already home to significant innovation activities, creating a snowball effect.