Maghribi Traders Essay Example
Maghribi Traders Essay Example

Maghribi Traders Essay Example

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  • Pages: 8 (2037 words)
  • Published: September 3, 2017
  • Type: Case Analysis
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Introduction

The longing for progress and the need for advancement has consistently motivated individuals to become innovative.

However, in times of need or emergency, creativity can also be ignited, resulting in the development of advanced products and processes that are now widely used in both business and everyday life. Currently, there is a significant rise in patent applications worldwide, including the United States, which can be attributed to the continuous expansion and diversification of technology over time. The number of patent applications today exceeds those from when the initial guidelines for patenting were established. The growth of innovation and patents is not solely driven by technological advancements but also influenced by market demand and expertise within various sectors of society.

Soulful and B. Czarina Khan examined the advancement of innovation during early industri

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alization in their study titled "The Demagnification of Invention during Early Industrialization: Evidence from the United States, 1790-1846" (published in 1990). Their research focuses on the characteristics of patentees and the frequency of patent applications during this period in the United States. One significant discovery highlighted in their paper is that the growth of markets and the increasing demand for innovation motivated individuals to create and seek patents.

The primary cause of the growth of patenting during this period is the increased number of patents contributed by ordinary citizens. The authors support this by showing that there is a rising share of patentees who only have one or a few patents, indicating low specialization. Additionally, they find that transitional counties have a disproportionately high number of patentees with low specialization. In this essay, I will summarize Soulful and Khan's scientific paper,

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provide confirmation and additional information from other researchers, and conclude with my own perspective and opinion.

Summary of the scientific paper

The authors analyzed data from a random sample of U.S records from 1790 - 1846, including additional information about relevant patentees. However, they highlight three deficiencies in patent counts. Firstly, the counts do not include many inventions.

Secondly, the quantity of patents is influenced by cultural and institutional factors. Moreover, patent numbers alone do not indicate the worth of the innovation. Soulful and Khan highlight that the notable aspect of the increase in patenting during that period was highly abnormal and unprecedented. They provide a brief examination of the patent filings from 1790 to 1846, emphasizing that the growth in patenting was cyclical and connected to macroeconomic events.

Specifically, there were two cycles. The first upswing started in the asses and ended in 1807. The second cycle began in the early asses and ended in 1836 with the implementation of more rigorous patent requirements. Following these changes, there was a sudden decrease in the number of patent awards. The authors attribute these upswings to business expansions and the Embargo of 1807. The paper highlights that supply conditions, technical knowledge, and growth in market demand were significant influences on the increase in patent registrations during these periods.

The authors of the paper bring attention to a significant discovery - the rise in the number of patentees with only one or two patents. They also observe that patentees who have limited long-term investment in inventive activity are greatly influenced by economic conditions and display cyclical patterns. On the other hand, patentees with substantial long-term investment in innovation remain unaffected by economic

conditions and do not exhibit cyclical behavior. In Figure 2, the authors present evidence indicating a shift in the occupation of patentees. This shift involves a decrease in the proportion of merchants and professionals and an increase in artisans and individuals with less sophisticated occupations. Additionally, the authors propose that prior to the Embargo, merchants held most patents not due to their expertise but for commercial purposes.

The authors demonstrate that the alteration in patent law in 1836 did not result in a decline in "low-commitment" patents, which are patents that do not provide substantial private and social benefits. Additionally, by comparing the specialization of patentees in the sample with that of the notable inventors, the authors establish that there is not a significant level of specialization. Even the renowned inventors were only slightly more specialized compared to the average patentee. Another significant discovery in the authors' text is that increased market growth and a competitive advantage in knowledge and technical skills stimulated greater investments in innovation.

In addition to that, according to the regression results presented by the authors, patentees from rural counties with difficult transportation (located on navigable waterways) exhibited less specialization. However, cities in these areas experienced growth along the water routes, which resulted in increased patent counts. The authors also highlight that this trend was later reversed with the occurrence of arbitration and further investment in innovation. Another significant discovery in Soulful and Khan's article is revealed through Table 5, which indicates a peak in patents per patentee between 1790 and 1804. Table 5 also presents other notable findings, such as the higher number of patents in urban, economically developed, and

metropolitan areas compared to rural areas.

The authors do not provide clear reasons for the higher number of patents in urban areas. They suggest that a variety of explanations could account for this trend, such as occupational composition, a greater supply of capital, and more access to information (Soulful and Khan, 1990). The authors argue that the distribution of patentees to transitional counties cannot be sustained due to a lack of urban centers.

Later, there was a shift in innovation activity towards patentees in more developed areas. Soulful and Khan suggest that skills and knowledge for patentable inventions were spread throughout the population, even among unskilled patentees who still managed to achieve innovations. The authors stress the importance of paying attention to the "low-commitment" group of patentees, which is heavily represented in transitional counties. This group is crucial as they are more sensitive to market expansion and driven by the urge for innovation. One criticism of Soulful and Khan's scientific paper is their finding that there has been a shift in distributions of patentees from merchants/professionals to artisans/tradesmen and from urban to rural residents (1990).

The shift observed in patentable innovations suggests that they can be based on practical skills and common knowledge instead of advanced technological expertise or high-level skills. This idea is supported by Soulful and Khan's paper. However, it should be noted that their findings are derived solely from data in the United States, making it difficult to universally apply this conclusion. Therefore, it is reassuring to discover that other studies conducted in various locations corroborate this assertion. In her research on patenting in 19th century Victoria, Australia, Gary B. Mage confirms that innovation primarily

depended on common sense and acquiring practical skills.

Using raw patent data of Victoria, Australia, alongside the findings of Soulful and Khan regarding the distribution of patients in various areas and occupations, M. Kelly concludes that the supply of patentable ideas in 19th century Australia was likely flexible. The question then becomes how individuals without extensive technological skills could obtain patents of higher technical complexity, a query to which Soulful and Khan have no response. However, Kelly provides a plausible explanation, attributing the development of innovation to social relations and networking.

According to Kelly, high skills and advanced knowledge of technology are not necessarily required for invention, which aligns with the views of Soulful, Khan, and Mage. She suggests that if a low-skilled innovator lacks knowledge in technology and profession, this gap can be filled by receiving assistance from other professionals in their social network. Kelly's research on the Invention of Inventions highlights the importance of an individual's social network in determining their effectiveness as an innovator. This supports the findings of Soulful and Khan, who argue that improved transportation and mobility in peripheral regions or transitional counties of the United States facilitate more innovation. The increased mobility allows inventors to form stronger social links with technologically skilled individuals.

In her paper, Kelly argues that innovation is a social process, which sets her apart from Soulful and Khan who did not focus on the social and networking aspect. Kelly explores four advantages of intellectual networking in her paper - complementary knowledge, idea exchange, division of labor, and overcoming cognitive obstacles. She illustrates this with the example of the mechanization of the cotton industry, where a combination of textile

production and mechanical engineering expertise was necessary.

In this case, individuals familiar with textile production collaborated with clockmakers to bring their invention to life. Kelly even suggests that the formation of linkages and social networking played a crucial role in boosting the effectiveness of innovation, resulting in an industrial revolution. Roomer's scientific paper "Endogenous Technological Change" further supports the idea that connecting different places and facilitating social networking among creative individuals has a synergistic effect. Roomer builds on Soulful & Khan's findings, which indicate that counties with navigable waterways had higher patenting rates compared to those without. Additionally, Roomer cites evidence that the introduction of water transportation leads to a significant increase in the rate of patenting.

Additionally, he agrees with Kelly that by linking different areas together, a synergy is created. When both areas are integrated, the total human capital of both areas combined is higher. Conversely, when they are isolated from each other, the total human capital of both areas is lower. In other words, integration leads to a higher total human capital. To support this idea, he incorporates Soulful; Khan's insight and refers to Figure 1 (Roomer, 1989). This model has significant implications for growth, trade, and research. By comparing the balanced growth equilibrium of two identical closed economies operating in isolation to the balanced growth equilibrium of fully integrated economies, we can better understand these implications.

In isolation, the common growth rate is determined by g from equation (16), with H being equal to the amount of human capital in each country. In the second scenario, the growth rate is obtained by substituting H with total worldwide human capital, OH. The

growth rate increases, along with the fraction H2O/H of total worldwide human capital allocated for research. "(Roomer, 1989) It becomes evident that Roomer and Kelly's significant discoveries would contribute to the completion of Soulful and Khan's paper, which completely disregards the aspect of social impact and connection. However, all of Soulful and Khan's scientific findings lose their stability when considering the key insight from Peter Mosher's article Innovations Without Patents - Evidence from World Fairs (2011)."

The paper reveals a concerning discovery that 89% of the innovations in the given sample were not patented. The sample includes over 8,000 British and American inventions dating from 1851 to 1915. Although these data belong to a different era, the motivations and circumstances surrounding patenting were not significantly different from 1790 to 1846. Hence, it can be inferred that a similar high percentage of inventions without patents could have existed during the early industrialization period in the United States. This casts doubts on the representativeness and reliability of the data utilized by Soulful and Khan. Consequently, their insights are being called into question.

Overall, the conclusion drawn from Soulful and Khan's paper suggests that the data they used provides a comprehensive understanding of patent development during early industrialization. The study's careful compilation of data based on reversions and regions proves helpful in clarifying and analyzing patenting distribution. The introduction and summary of the paper highlight four key insights that aid in understanding patent distribution. However, there are still unanswered questions that Mage, Kelly, and Roomer address to some extent. - Gary B.

Mage's paper supports the insights of Soulful and Khan, as it demonstrates similar findings on patent distribution development

in Victoria, Australia. Kelly and Roomer's research complements Soulful and Khan's paper by explaining how low-skilled inventors implemented their ideas without extensive technological knowledge. They also discuss the positive influence of social networking on innovation. In my view, Peter Mosher's claim that most inventions are not patented does not undermine the reliability of the paper. This is because the conclusions drawn from the patent data can be extrapolated to estimate the number of unpatented inventions.

The insights and proportions found in the data sample of patents can be applied to estimate the number of unpatented inventions.

Bibliography

  1. Kelly, M. (2005), The Invention Of Invention.
  2. Research Repository CUD.
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