A big reason that people say intrest rate hikes or cost cutting is good because it makes people "work smarter with less" or some other BS or have the economy focus on what matters

Bordain first book have a great argument on bust driving culinary Innovation.

It seems obvious to me, too, when considered in terms of available capital providing means for experimenting with unproven ideas.

But I think the opposite may legitimately be the intuition for people of generations before ZIRP and the notion of inventiveness when resources are scarce or you're simply out of work. You can see it in the themes of many movies and other media in the 80s and early 90s, too, the hero arc of the inventor down on their luck. I think the idea carried forward for people in their formative years then.

The narrative I've heard is that it's all about the people. During booms, the smart people are employed and treated well, so stay stuck in the corporate grind. Then their employer goes bankrupt and start their own company.

Sure. War and hardship drives innovation.

If you read beyond the headline, the article explicitly addresses this.

The hypothesis was that firms invest in innovation in busts, when the opportunity cost is lower.

The study finds that it’s nuanced and it depends on the industry. Too close to a boom, like an oil firm, and you face high opportunity costs, and innovate less during the boom. There is a sweet spot where you are near enough to benefit from higher capital but not too close to be crippled by opportunity costs

People in big cities have already figured out that patents are a time suck.

I'd also be curious, why the cutoff at 2012. Do the results change if they go to 2020? 2024? Whenever I see a cutoff like that it makes me suspicious that that date was chosen because another date would not product the results they wanted.

It uses Oil & Gas shocks, rather than a sectoral analysis among o&g. I think it is because big firms are in big cities, who seem to be able to handle shocks better than other companies in other cities

Hear, hear! Especially in software, patents are an indication of stagnation, resistance to innovation, and rent-seeking, monopolistic behavior. Using their number as a proxy for innovation is backwards.

Patents are both overprotective and underprotective. Out of a desire to screen out patent litigation that lacks merit, we have made the system unbelievably expensive for all but the most well funded litigants. That, in turn, has helped the biggest companies. Their freedom to infringe with impunity becomes part of the moat that helps preserve their market position.

I feel like patents are well beyond their utility.

They are really only useful today to protect companies during their enshittification phase. Is enshittification useful to society? Maybe.

Probably tech patents should have been reformed when IBM went around trying to protect its BIOS. Or when Microsoft started pushing its weight around with FAT.

A large company protecting itself against competition is almost definitionally anti productivity.

Some kind of category protection might be useful. Protect only the latest (or maybe latest x) genuinely novel innovation in a category while open sourcing everything prior. Keeps the incentive to innovate, removes patent trolling and reduces enshittification. Will need a strong hand to ensure that people dont just try and create a bunch of new categories.

The US practice of patents helps incentivize inventors to study and innovate so that they see an ROI when they sell to a large company able to handle exploiting a defending a patent. If you wanna try to make a company on your own around your patent, you’re free to try but we don’t build the system around moonshot strategies that are likely to fail (i.e. making the company around your patent).

I’m not defending the system, I’m simply explaining. Likewise, forever copyrights exist to increase the value of artistry so that artists get something back when they sell them. Again, not defending.

Iverson "open sourced" APL because a professor in ~1950 told him about Edwin Howard Armstrong, the inventor of the FM radio, who lost the 2nd half of his life to litigation, eventually leading to his divorce and possible suicide. His professor told him not to patent things, because enforcement would cost the rest of your life.

There are solid economic arguments that they were never the right model, even "back in The Day": http://www.dklevine.com/general/intellectual/againstfinal.ht...

Patents are government granted monopolies on ideas. The case for them is that you need the carrot of a monopoly to incentivize innovators (empirically untrue). The case against them is that government mandated monopolies immediately dampen all subsequent innovation until expiry (empirically true across industries throughout history).

No they are not. I've asked that question to quite a few well-published economists studying innovation and the off-the-record answer is always:

> Patents are an extremely noisy and biased measure of innovation; conflate innovation with a million other variables, etc. but we have all of the patents and patent applications available for free since the beginning of the time, so that's what we'll use. If you find another good measure as comprehensive let us know and we'll use that instead; meanwhile <shrug emoji>

Some fields have moved away from patents and almost purely to trade secrets. There are so many practical issues with patents now that in many cases they have negative value.

The downside of this is that companies who are using trade secrets instead of patents are no longer publishing either. Many areas of R&D that are primarily done outside of academia are becoming increasingly opaque because there is no up-to-date literature around the state-of-the-art.

Ironically, the situation that patents were meant to prevent is becoming common again now that patents are often effectively useless.

> Are patents (and trade secrets) the right model for protection?

This probably deserves a more expansive discussion in its own right. I think what has become clear is that the tools we have (patents, trade secrets, copyright) are extraordinarily crude. Nonetheless, they worked pretty well in a time when intrinsic friction and overhead in markets was high.

Now that we’ve eliminated almost all friction in markets, everything has become extremely sensitive to the intrinsic cost and supply chain structure of the IP being protected and the speed at which those supply chains can adapt to competitive opportunities. To make matters worse, these intrinsic cost and supply chain structures tend to vary considerably depending on the particulars of the domain. Consequently, the IP protection tool in any particular case is the one that in practice has highest cost burden (both money and speed) on anyone trying to circumvent it with the lowest cost to both implement and defend. Patents rarely win that argument anymore for many things.

The most robust protection these days is information asymmetry, and trade secrets are good at maximizing that. Unlike patents, it is also extremely cheap to implement, so it is economically favorable. Defending that information asymmetry has become more difficult in some ways (more sophisticated reverse engineering) but easier in others (hello cloud). Unfortunately, we lived in an age of trade secrets in past centuries and it had many downsides; patents were essentially invented to mitigate those downsides.

The entire dynamic has many downsides but trade secrets are essentially winning out. Information asymmetry still has a lot of market power if you are good at exploiting it, much of the benefit isn’t even the secrecy per se in many cases.

I wouldn't expect to see too many garage startups in places where almost nobody has a garage.

I've noticed this too, I think its becoming more apparent in recent times as the allure SV and other large cities once had begin to fade, with hackers and innovators moving elsewhere (or simply not actively experiencing the same level of brain-drain)

Related post I came across recently that highlights some of the effect quite well:

https://goetzman.com/2025/01/07/small-town-hacker-culture/

There are so many was to accidentally create a mislabeled population density map.

I don't know about patent lawyers, but a surprising amount of law work can get done remotely. If you want a good patent lawyer do you hire in your city? I wouldn't, its a federal law, and highly specialized. I would hire whoever is best regardless of location

I would imagine that some of the best patent lawyers in the whole country are actually in little nothing towns in East Texas since that district is where much of the patent suits for the nation get filed. For a variety of reasons, most patent law is litigated in Texas. Texas handles more federal patent suits than any other state by a margin of ~2x.