In 2019, the World Intellectual Property Organization (WIPO) reported that China alone accounted for almost half of all the world’s patent filings, with India also registering impressive increases in global patent production. “Asia has become a global hub for innovation”, declared WIPO Director General Francis Gurry. Just a few decades ago, these emerging markets constituted a negligible share of global patent production. The driver behind this is that during the past decades multinational enterprises (MNEs) started to conduct innovation more globally. By 2018, according to the U.S. Bureau of Economic Analysis (BEA), the 20-year growth rate of R&D activities of US MNEs in foreign countries –estimated to be 6 percent– exceeded the growth rate of R&D within the U.S., estimated at 4 percent. All this leads to the question of what mechanisms contribute to MNEs increasing their innovation output globally as well as shifting innovative activities between countries. This paper focuses on this question by studying the role human mobility has played in this process.
In this paper, Dany Bahar and co-authors investigate how reforms that ease or restrict human mobility affect global innovation. The results show that reforms favoring inventor mobility increase the patenting, including global collaborations, of MNEs within a country, while the opposite is true for reforms discouraging inventor mobility. Results also show that positive migration reforms partly explain the increasing share of global knowledge production by countries with low initial patenting observed over the past decades. This suggests that policies affecting human mobility contributed to the global shift in the geography of innovation towards emerging markets.