Research teamwork in the technology race: A natural experiment in the US patent law

Scientific discovery was once considered as a realm of individual masterminds such as Einstein. Science has since become so immense and scientists are so specialized that significant scientific advancement is now achieved by large, well-funded collaborative teams. Rising team size in R&D is well documented in patent and publication data around the world.

Why are teams getting bigger in innovation? A conventional explanation to this question is the “burden of knowledge” hypothesis (Jones, 2009) which argues that scientists are more specialized as scientific knowledge becomes immense and more inventors with narrower expertise are thus assembled for an R&D team to cover a necessary range of skills.

Using a panel dataset of Korean patent inventors that includes unique ID’s for inventors, and their birth year and gender, we check the validity of this hypothesis. We derive three implications from the hypothesis and test them against our data. Those implications are:

(1) Young inventors are more specialized with narrower expertise as knowledge become so immense.

(2) Young cohorts of inventors are more likely to appear in patents by teams than in single-inventor patents, and in patents by bigger teams than by smaller teams.

(3) Young inventors are more likely to team up with other young inventors.

With weak support from our data for all three implications, we offer a simple, alternative explanation that fits the data better, the “race against time” hypothesis. With innovation races ever more competitive (due to first-mover advantage, increasing international pressure, and stronger IP protection), R&D firms have to finish a research project as soon as possible. Individual researchers having a limited time, firms need to put together a team with more R&D personnel (even duplicates with same set of skills) to speed up the process.

We test this hypothesis using the US patent data. The test is based on a natural experiment that took place in 1995 when the US patent term was changed due to the GATT agreement. Those who filed patents before June 8, 1995 had two options to choose from: 17 years after issuance (old law) or 20 years after application (new law). This opportunity for firms to choose a more beneficial term between the two provided incentives to hasten their R&D for those firms with longer patent lives. We check if patent applications submitted before June 8, 1995 have bigger team sizes.