Inventing or spying? Implications for growth

An engineer graduates if she derives the obvious implications of her instru ctor's hints. But the patent system rewards only the first to present nonob vious advancements-ideas similarly skilled engineers are not expected to in vent. If a fraction of the newly invented hints spill over before the techn ological advances riley entail are completed and granted legal protection, the R&D workers will find it convenient to spend some time searching for ea ch other's hints instead of creating their own. A simple modification of th e basic Schumpeterian model shows that the larger the skilled population, t he larger the relative incentive to spy.