Anthony Arundel

What percentage of innovations are patented? empirical estimates for European firms

Abstract A 1993 survey on the innovative activities of Europes largest industrial firms obtained useable results on patenting activities for 604 respondents. The data are used to calculate the sales-weighted propensity rates for 19 industries. The propensity rates equal the percentage of innovations for which a patent application is made. The propensity rates for product innovations average 35.9%, varying between 8.1% in textiles and 79.2% in pharmaceuticals. The average for process innovations is 24.8%, varying from 8.1% in textiles to 46.8% for precision instruments. Only four sectors have patent propensity rates, for both product and process innovations combined, that exceed 50%: pharmaceuticals, chemicals, machinery, and precision instruments. Regression results that control for the effect of industry sector show that patent propensity rates increase with firm size and are higher among firms that find patents to be an important method for preventing competitors from copying both product and process innovations. The effect of secrecy is not so straightforward. Firms that find secrecy to be an important protection method for product innovations are less likely to patent, as expected, but secrecy has little effect on the propensity to patent process innovations. The R&D intensity of the firm has no effect on patent propensity rates for both product and process innovations. The sector of activity has a strong influence on product patent propensities but very little effect on process patent propensities, after controlling for the effect of other factors.

The relative effectiveness of patents and secrecy for appropriation

Abstract Changes in patent law, global competition, and the rise of several new technologies suggest that patents could be of greater value than secrecy for many innovative firms, particularly small firms that are unable to use market power or other factors to appropriate their investments in innovation. Data from the 1993 European Community Innovation Survey (CIS) for up to 2849 R&D-performing firms is analysed to determine the relative importance of secrecy vs. patents. This particular combination of appropriation methods is interesting because secrecy can act as a mutually-exclusive alternative to patents. The results show that a higher percentage of firms in all size classes rate secrecy as more valuable than patents. However, ordered logit regressions show that the probability that a firm rates secrecy as more valuable than patents declines with an increase in firm size for product innovations, while there is no relationship for process innovations. The firms R&D intensity has no effect on the relative value of secrecy vs. patents. There is weak evidence to show that participation in cooperative R&D increases the value of patents over secrecy for product innovations. The results are relevant to ongoing debates over changes to the patent system and the need for policies to encourage small firms to patent more.

PROXIMITY AND THE USE OF PUBLIC SCIENCE BY INNOVATIVE EUROPEAN FIRMS

We use the results of the policies, appropriation and competitiveness in Europe (PACE) 1993 survey of Europes largest firms to explore the effect of proximity on knowledge flows from affiliated firms, suppliers, customers, joint ventures, competitors and public research organisations to innovative firms. The focus is on the last. First, we find that public science is among the most important sources of technical knowledge for the innovative activities of Europes largest industrial firms. Then, after comparing the PACE results with the Community Innovation Survey II (1997) and the Carnegie Mellon Survey (1994), we use the unique information from the PACE survey on the geographic location of knowledge sources and the methods used to access them to develop an econometric analysis of proximity and location. The importance of proximity for sourcing knowledge from public research increases with the quality and output of domestic public research organisations and the importance given to public science by the respondents. It declines with an increase in the firms R&D expenditure, activity in the North American market and the importance to the firm of codified basic research results. Surprisingly, firms that find informal contacts to be an important method for acquiring public research results are more likely to find proximity less important, even though proximity allows firms to access tacit knowledge. This effect is primarily limited to European countries, suggesting the development of a ‘European Research Area’.

The use of patent databases by European small and medium-sized enterprises

Patent databases contain a wealth of technical information, but only a fraction of innovative small and medium-sized enterprises (SAIEs) use them as an information source. The characteristics of SAIEs that use patent databases and the reasons why they do or do not use them are investigated in this study. Part of the analysis is based on the Community Innovation Survey results, which is the largest survey to date of innovative European firms. The results show that the probability of using patent databases increases with firm size and is higher among firms that perform research and development or which find patents of value as an appropriation method. Furthermore, the percentage of firms in each of 14 sectors that find patents to be an important information source is correlated with the patent propensity rale in each sector. The second part of the study is based on a combined survey and interview study of Dutch SAIEs in five high-technology sectors. The results show that SMEs mainly use patent databases to acquire information, often for legal purposes, that is not available from any other source. In contrast, these databases are seldom used to acquire technical data, largely because of the cost in terms of personnel time and expertise. This points to the need for simpler and more efficient methods of searching patent databases.

Complexity of Innovation in the public sector: A workgroup-level analysis of related factors and outcomes

Abstract Complex innovation incorporates more than one innovation type. Using the number of dimensions of the ‘most significant innovation’ implemented by each public employee’s workgroup as a proxy for innovation complexity, this study explores factors that are associated with complexity and examines how complexity affects innovation outcomes. Employing a sample of 4,369 Australian Government employees, we find that the more complex the innovation, the greater the number of barriers a workgroup has to face in its implementation. A broader (but selective) range of idea sources and a more decentralized workplace where both individual and team creativity is encouraged increase the likelihood of implementing complex innovations. Innovation complexity is positively correlated with the variety of beneficial outcomes, suggesting both policy and management interest in supporting complex innovation in the public sector.

Biotechnology indicators and public policy

This working paper provides input and a framework for a broader discussion of the identification of user needs that should inform the development of biotechnology statistics and indicators. This document identifies and evaluates the main types of indicators that may be required to inform policy actions. Given the embryonic state of biotechnology, the main focus for policy is on S&T policies where four main types of S&T policies – supporting biotechnology research, diffusing biotechnology knowledge and expertise, commercialising biotechnology research and encouraging the adoption (application and use) of biotechnology – are used as a framework for developing relevant statistics. In addition to more generic S&T polices, the paper explores the development of indicators by major application area – agriculture, health, industrial processing and environmental applications. The paper includes both an evaluation of how existing indicators can be used, and the types of new indicators that ...

The nature and incidence of workgroup innovation in the Australian public sector: Evidence from the Australian 2011 State of the Service survey

Using data from a nationally representative survey of all Australian Government employees, we explore the nature of innovation implemented at the workgroup level and assess the multidimensionality of the workgroup’s ‘most significant innovation’ (MSI). Of the 10222 survey respondents, 48% reported at least one innovation implemented by their workgroup, with an innovation more commonly reported with an increase in the respondent’s age, seniority, and service experience; among men and university graduates. The results reveal that 54% of the reported MSIs incorporate between two and five dimensions of innovation types (policy, service, service delivery, administrative/organizational, and conceptual), and most of these dimensions reinforce each other. Different dimensions of the MSI draw on different sources of ideas (with senior leaders having the broadest impact), face different ‘revealed’ barriers, require different levels of workplace creativity, and produce different beneficial effects. Our findings help strengthen an understanding of the influencing factors and the effects of multidimensional public sector innovations

Agricultural Biotechnology in the European Union: Alternative Technologies and Economic Outcomes

All seed firms in six EU countries were surveyed in May 1999 to determine how seed development budgets were distributed across three crop development technologies and the effects of the type of technology in use on employment, sales and exports. The results indicate that an evaluation of the economic consequences of an emergent technology such as genetic engineering should both consider the effect of competitive alternative technologies and survey all firms within the sector, rather than focusing on a subset of high technology firms. Only about 10% of the combined 1999 research budget of European seed firms was spent on genetic engineering, although this should increase to about 15% by 2002. Alternative technologies to develop new plant varieties, such as conventional plant breeding and conventional breeding combined with techniques that were developed for genetic engineering, are considerably more important economically. In fact, there is no difference in expected employment and sales per development employee by the type of technology in use, while export rates are highest among firms that combine conventional plant breeding with advanced techniques.

Rethinking Science and Technology Indicators for Innovation Policy in the Twenty-First Century

This book takes stock of what is known about the process of innovation and its effects, and the policy interventions that influence both. It provides insights into future research required to support evidence-based policy-making and makes clear the need to take a systems approach to the analysis of innovation, its outcomes and its impacts.

PRIVATE–PUBLIC COLLABORATION AND INNOVATION PERFORMANCE: DOES TRAINING MATTER?

This study examines, through the theoretical lens of absorptive capacity, how the interaction between investments in R&D and training moderates the influence of collaboration with public research organisations (PROs) on firm innovation performance. Using data for 1,086 innovating firms across all industry sectors in the Australian state of Tasmania in 2010, we find that there is no direct association between collaboration with PROs and firm innovation performance, and the R&D-training interaction plays a significant role in positively moderating such an association. This study contributes to the innovation management literature by demonstrating the importance of the combination of R&D and training in creating absorptive capacity. More importantly, the combination of R&D and training positively influences the successful exploitation of private–public collaboration and promotes innovation performance.