Density and transportation have spurred new ideas since before the industrial revolution.

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Cities, with their dense mixtures of people and economic activity, have long been fonts of innovation. To start, density spurs innovation by pushing people and ideas together, enabling them to combine and recombine in new ways. And advances in transportation—from railroads and subways to automobiles, planes, and high-speed rail—increase the circulation not only of goods and people, but of ideas as well.

Most of the evidence connecting urbanization and innovation focuses on recent times. Now a study by Elisabeth Ruth Perlman,1 a Boston University economist and doctoral candidate, documents the ways that urbanization and transportation spurred American innovation in the late 18th and 19th centuries.

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Perlman than examines the connection between new transportation and the flow of information. To get at this, she tracks the spread of key words and phrases in more than 700,000 patents to determine how quickly a new idea or technology spread into an area, and to what degree new forms of transportation contributed to this expansion. Surprisingly, she finds that transportation doesn’t seem to be encouraging more references to new technologies. If anything, areas that are newly connected to transportation incorporate technology at a slower rate than they did before.

  • 1. Abstract: This paper examines the geographic distribution of patenting in the nineteenth century United States as it evolves in response to transportation improvements. I find a robust, statistically significant, and positive effect of increases in local transportation access on patenting. Over the twenty years following the arrival of the railroad in a county, the number of patents per capita doubles. I explore two possible mechanisms behind this increase: a) inventors responded to larger markets afforded by transportation improvements; or b) transportation improved information flows making investors more productive. I find little evidence that patenting responded positively to increased market access per se, but that local access still matters. Using digitized texts of patents, I measure whether any given patent mentions a previous, novel technology within a particular time frame. I find little evidence that the speed of arrival of these new ideas is related to transportation improvements. These results suggest that access to local transportation lowers the effective cost of patenting by forming a nexus around which local agglomerations occur.