We are delighted to invite you to our forthcoming event in the Bocconi Assembly for Innovation and Cooperation (BAIC) Webinar Series on Tuesday 9 June at 18:00 (CEST)/9:00 (PDT).
Professor Enrico Moretti will be presenting his research, "The Effect of High-Tech Clusters on the Productivity of Top Inventors." Enrico's bio and webinar abstract are detailed below.
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Enrico Moretti is the Michael Peevey and Donald Vial Professor of Economics at the University of California, Berkeley. He serves as the Editor in Chief of the Journal of Economic Perspectives and is a Visiting Scholar at the Federal Reserve Bank of San Francisco. He is also Research Associate at the National Bureau of Economic Research (Cambridge), Research Fellow at the Centre for Economic Policy Research (London) and the Institute for the Study of Labor (Bonn).
Professor Moretti's research covers the fields of labor economics and urban economics. He has received several awards and honors, including the Society of Labor Economists' Rosen Prize for outstanding contributions to labor economics, the Carlo Alberto Medal, the IZA Young Labor Economist Award and a Fulbright Fellowship. His book, "The New Geography of Jobs", has been translated in eight languages and was awarded the William Bowen Prize.
The high-tech sector is increasingly concentrated in a small number of expensive cities, with the top ten cities in "Computer Science", "Semiconductors" and "Biology and Chemistry", accounting for 70%, 79% and 59% of inventors, respectively. Why do inventors tend to locate near other inventors in the same field, despite the higher costs? I use longitudinal data on top inventors based on the universe of US patents 1971 - 2007 to quantify the productivity advantages of Silicon-Valley style clusters and their implications for the overall production of patents in the US. I relate the number of patents produced by an inventor in a year to the size of the local cluster, defined as a city × research field × year. I first study the experience of Rochester NY, whose high-tech cluster declined due to the demise of its main employer, Kodak. Due to the growth of digital photography, Kodak employment collapsed after 1996, resulting in a 49.2% decline in the size of the Rochester high-tech cluster. I test whether the change in cluster size affected the productivity of inventors outside Kodak and the photography sector. I find that between 1996 and 2007 the productivity of non-Kodak inventors in Rochester declined by 20.6% relative to inventors in other cities, conditional on inventor fixed effects. In the second part of the paper, I turn to estimates based on all the data in the sample. I find that when an inventor moves to a larger cluster she experiences significant increases in the number of patents produced and the number of citations received. Conditional on inventor, firm, and city × year effects, the elasticity of number of patents produced with respect to cluster size is 0.0662 (0.0138). The productivity increase follows the move and there is no evidence of an effect in the years leading up to the move. IV estimates based on the geographical structure of firms with laboratories in multiple cities are statistically similar to OLS estimates. In the final part of the paper, I use the estimated elasticity of productivity with respect to cluster size to quantify the aggregate effects of geographical agglomeration on the overall production of patents in the US. I find macroeconomic benefits of clustering for the US as a whole. In a counterfactual scenario where the quality of U.S. inventors is held constant but their geographical location is changed so that all cities have the same number of inventors in each field, inventor productivity would increase in small clusters and decline in large clusters. On net, the overall number of patents produced in the US in a year would be 11.07% smaller.
We hope you can join us for this and other seminars in this series. Other confirmed speakers include: Peter Cappelli, Russ Coff, Ranjay Gulati, and Rebecca Henderson. Further details are available on the website.
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