Engineers, Innovative Capacity and Development in the Americas

This paper offers the first evidence on the prevalence of a central actor in modern growth theory—the engineer. Using newly collected sub-national, and international data as well as historical case studies, it then argues that differences in innovative capacity, captured by the density of engineers and patents at the dawn of the Second Industrial Revolution, in fact, are important to explaining present income differences across US counties, states within countries, and between the US and Latin America. This remains the case after controlling for literacy, other higher order human capital, and demand side elements that might be confounded with engineering or patenting. Instrumenting engineering using the Land Grant Colleges program further limits remaining endogeneity. A 1 SD increase in engineers at the turn of the 20th century accounts for a 16 percent increase in US county income today, and patenting capacity contributes another 10 percent. This can partly explain why countries with similar levels of income in 1900, but ten fold differences in engineering density diverged in their growth trajectories over the next century.