All of ganeumann's Comments + Replies
Why is there no equivalent of the VC industry, but for patentable inventions instead of startups?
It's called getting a job.
The returns to patents follows a power law distribution (PLD), just as VC-backed companies do, but it is even more extreme. The exponent for VC-backed startups is close to but just under 2*, it seems, while Nordhaus writes that the exponent for the return to patents is between 1.3 and 1.7**.
I don't have an answer to your question! But it has always struck me that venture capital returns should cluster just below the PLD alpha of 2. This value is important because when you calculate the mean of the PLD, it goes to infinity as alpha... (read more)
Interesting to think what changed in that time period. Ideas prior to 1900 or so would have been primarily mechanical, and the patent system was designed for this. Even though all patents represent ideas, ideas prior to the electrical age were about mechanical objects that could, perhaps, be instantiated in one best way. Ideas in the electrical age could probably be instantiated in many ways, making patents harder to enforce. And now, in the information age, the idea itself can be articulated in many ways, making patents somewhat useless for information-based products except as post-hoc bludgeons.