OECD Digital Economy Report Measures Innovation With IPRs

An annual report on the digital economy from the economic organisation of the world’s richest countries measures innovation by how many patents, designs and trademarks were filed by businesses.

The Organisation for Economic Cooperation and Development (OECD) Digital Economy Outlook 2015 is available here.

The report looks, on page 93, at “Innovation in the ICT Sector.” It says, “In most OECD countries, the ICT sector accounts for the largest share of business expenditures on research and development (BERD),” amounting to a third of all such expenditures in most countries.

It looked at R&D as an innovation input, and noted that ICT R&D expenditures tend to be concentrated in the ICT manufacturing sector (as opposed to services), accounting for the majority in some countries.

For innovation output, the OECD boiled it down to intellectual property rights despite the knowledge that it is generally understood that IP rights are not the only measure of the innovativeness of a country.

“While R&D provides a measure of innovation input, patents, registered designs and trademarks capture innovation output,” it said, and proceeded to list numbers of applications filed under the Patent Cooperation Treaty. Patent applications in ICT technologies “accounted for almost 40% of total applications, representing a return to almost the 2000-2002 level,” the report states.

Meanwhile, it noted that innovation activities are increasingly undertaken through international networks, with cross-border co-inventors jointly filing patent applications, and co-authored scientific publications giving evidence of networks. It makes no mention of rise of open science networks that may or may not be measurable by IP rights.

It also declared that “registered designs can be used to proxy innovation in relation to the aesthetic feature of products.” For European Registered Community Designs, ICT and audiovisual devices rose one percent in 2010-2013, to 8.5 percent, compared with 2005-2008.

And OECD reported that “branding activities of ICT-related products, as measured by trademark registrations, are also strong and increasing.” In 2010-2013, they accounted for about one-third of trademark registrations in Europe and one-fifth in the United States.

It noted that national trademark shares do not align with R&D, patents or export shares.

It also found that in the last 5 years, a number of large trademark players, such as Japan and the United States, lost shares in EU branding to China, Korea, and smaller EU economies. Germany and Spain did not lose, however.