Is innovation (increasingly) concentrated in large cities? An international comparison

There is a widely held belief that agglomeration economies encourage significantly more successful and productive innovation activities. Based on this belief some scholars even suggest that policies designed to stimulate innovation in non-urban areas are ineffective and a waste of resources. Investigating the geographic concentration of patented inventions in 14 developed countries, we find that in most countries patenting is geographically dispersed with considerable shares of patented inventions in areas other than large cities. South Korea and the US are two extreme outliers where patenting is highly concentrated in some large cities. Also, there is no general tendency that inventors in large cities are more productive, in terms of filing patents, when compared to inventors in rural areas. We conclude that while the agglomeration economies found in large cities may offer advantages for innovation activities, the extent of these advantages is not significant, and popular theories overemphasize the importance of large cities for innovation activities.