OECD, Patent Statistics and Innovation Mapping

Perhaps still tethered to the banks of the Tigris-Euphrates rivers? Instead, more than three thousand years of innovation and the commerce it has enabled have dispersed mankind across the globe. 

Where would we be without patent mapping? 

With globalization and economic interconnectedness defining characteristics of the 21st century, the Organisation for Economic Co-operation and Development (OECD) publishes reams of statistics on the role invention plays in this modern world by tracking world patenting trends. One of the more interesting and accessible data sources is the Innovation Mapping website.

According to the OECD’s overview on the site, “monitoring and analyzing patenting activities is one of the most common ways to trace innovation.” At the same time, it freely acknowledges the shortcomings of relying on patent date to assess and evaluate innovation levels and activity. 

“Patents are not a perfect indicator of capturing innovation potential. A patent is not a guarantee for a successful product innovation. In fact, very often inventions turn out to have no or very limited market value. Patenting also has a bias to certain industries. For example, patents are widely used in the pharmaceutical industry, whereas in other sectors, such as IT, innovation progresses too fast to make legal protection through patents effective. In other industries, companies might prefer to keep their invention secret instead of seeking legal protection through patents.”

A High-Level View of Innovation

Notwithstanding the OECD’s acknowledgement of the shortcomings of using patent data to measure innovation, the purpose of the site is to illustrate in broad strokes innovation around the globe. 

You get limited granularity here; instead of detailed information on patenting activities by company, you can only access proverbial “high level” views by geographic regions. You can only chop (rather than finely slice) large chunks of macro data (patent filings from 2000-2009) into somewhat smaller chunks. You can see trends and developments (at least across metropolitan regions and larger) but they’re still effectively chunks. 

Here are a few of the more interesting patterns: 
1. International Patenting Continues to Rise: While patent applications have risen across the globe, Asia stands out. Applications in the U.S. as a percentage of global applications have approximately dropped from 40% (2000) to 28% (2009). During the same period, Japan and China rose six percent, respectively. 

2. What France and Italy Should Learn from California: OK, some European economies are shaky (French) to very shaky (Italian), but is there a reason why California (population: 37 million) accounts for more international patent applications than France (population: 65 million) and Italy (population: 60 million) combined? A culture of inventiveness and innovation, certainly. California's portion in global patenting share, though, is dropping as other countries and companies invest more in R&D. More patents now come out of the Southern-Kanto region in Japan, home to Tokyo and Yokohama, than from California.

3. Regions Throughout the U.S. Filing to Keep Up with World: According to the OECD data, patent filings in only two out of 179 economic regions in the U.S. (San Diego and Houston) grew faster than the global rate. The other 177 regions lagged behind. 

4. Patent Filing Clusters Evident in Both Europe and Asia: Patent filing is much more concentrated in both Europe and Asia than in the U.S. Patent intensity is high in Southern Germany, Switzerland, the Netherlands, Southern Sweden, Finland, Paris and in the Rhone-Alpes region. In Asia, the clustering is in Korea (Central Region), Japan (Southern-Kanto Tokai and Hokuriku),  China (Guangdong), and in India (Maharashtra and Karnataka). In contrast, patent filing in the U.S. is much more distributed from coast to coast. 

Is Patent Intensity Really Useful? 

One of the key metrics shown on the site is a statistic called Patent Intensity. It is simply the number of patents per million inhabitants. Within the U.S., Massachusetts has the highest patent intensity, followed by Delaware, Minnesota and California. Alaska, Mississippi, Arkansas and West Virginia are at the other end with the lowest intensities. 

Is the metric meaningful or just made-up? Let’s compare the data for California and Massachusetts. 

According to the REGPAT Database (Jan. 2010) and OECD Regional Database (July 2009), California contributed more than 22% of patents originating in the United States. Yet, Massachusetts has a higher patent intensity. The California GDP is far higher than Massachusetts so it invests tens of millions more in R&D than Massachusetts. There are far more companies with active IP programs in California than in Massachusetts. The patent intensity metric seems somewhat of a red herring, doesn’t it? 

Innovation Mapper or Patent Mapper?

While the OECD went to the trouble to invent the Patent Intensity metric and create the website, it acknowledges on the site the challenge of aligning patents with innovation. The answer seems to be staring us in the face. Instead of calling the site Innovation Mapper, why not just call it what it really is-a Patent Mapper.