by Georgios Tsiachtsiras (University of Bath)
This blog is based on a paper presented at the 2022 Economic History Society Annual Conference in the New Researcher Session: NRIIC (Innovation).
‘There is no country in the world where so small a proportion of the capital invested within
the last forty years in canals and railroads has been wasted, or where traveling is safer,
or in which travel and trade are accommodated at more reasonable rates than in France’.
Moncure Robinson, American Philosophical Society (1880)
Over the second half of the nineteenth century, railroad construction transformed the French economy. Railways generated economic relations and cultural environments, stimulated commerce, and created new economic opportunities. The creation of the rail network changed the perception of time. A striking example of this transformation is the travel time between Paris and Marseille. In 1814, the duration of this trip was four to five days, while, by 1857, this trip took about 13 hours. This was due to the large-scale construction of French railroads. But how did this enormous expansion of railroads affect innovation performance?
Figure 1. Nineteenth-century steam locomotive
Connecting places via transportation networks is essential in order to promote knowledge diffusion across space and, hence, long-term economic growth. Transport infrastructure investments across cities may provide a broader reach to otherwise localized knowledge spillovers by lowering the cost of exchanging ideas among places and people.
Remarkably, the roll-out of the network coincided with a rise of innovation activity. For my analysis, I use the historical patent database of the French National Institute of Industrial Property. Before 1850, the number of patent applications owned by inventors, as reported in the historical French patent database, was 22,978. From 1850 to 1902, this figure increases to 285,597. Some of the greatest inventions in history took place in France during the second half of the nineteenth century, such as Louis Pasteur’s inventions for wine and beer pasteurization in 1865 and 1871, respectively. Another example is the invention of the French chemist, Charles Frederic Gerhardt, who, in 1853, was the first person to prepare acetylsalicylic acid (aspirin). As well, the very first patented film camera was invented by Louis Le Prince in 1888.
Figure 2. Louis Pasteur in his office
In my research, I document that access to a rail station increases a canton’s innovation activity. This finding remains significant after many robustness tests. However, the most interesting question concerns the mechanism behind the main results; how did a higher connectivity to a rail station increase the innovation performance of a given canton?
I attempt to shed light on the underlying mechanism behind my main results. I argue that rail stations serve as gates that allow a less costly reach to the centres of knowledge. I define the cantons that are inhabited by inventors as centres of knowledge. The rail network changed the perception of time and created more opportunities for the citizens of France to travel and to become exposed to new ideas. The intuition behind this mechanism is based on the theory that there are specific interactions which are central to individual productivity. Inventors built their knowledge and improved their skills by interacting with others and learning from them. Since knowledge cannot be kept secret, a new technology by an inventor has a positive external effect on the production possibilities of other individuals. I find that the innovation performance of a canton depends crucially on how well connected it is to other cantons inhabited by inventors or, equally, to the centres of knowledge.
Finally, in the last part of my research, I explore the role of Paris on the diffusion of new technologies. Paris can work as a gatekeeper of knowledge that connects the national innovation system to global innovation networks. This effect was stronger in the nineteenth century, a period of Parisian preeminence. The most illustrative example of the importance of Paris as a global node is the fact that there were five World Fairs that took place in the capital during the second half of the nineteenth century. The purpose of these events was to bring culture, history, and new technologies together in one event, for people of many backgrounds. Examples of the inventions that were displayed during the five World Fairs in Paris are the Grande Roue de Paris ferris wheel, the Rue de l’Avenir moving sidewalk, the first ever regular passenger trolleybus line, escalators, diesel engines, electric cars, dry cell batteries, electric fire engines, talking films, and the telegraphone. There are numerous references to the fact that passengers from all places in France were coming to Paris to participate in the exhibitions via boats or via the new railway line. I find that, for a given canton, a less costly connection to the global city of Paris (as opposed to the general access to the centres of knowledge) has a stronger positive impact on the probability to innovate in a new technological sector.
In terms of policy, the findings of this paper suggest that transportation networks promote innovation performance by facilitating the diffusion of knowledge. In addition, targeted investments to infrastructure projects can facilitate access to big cities and to increase the probability of smaller cities to innovate in new technologies.
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