Thursday, May 17, 2007

Patents and innovation

One of the first rules of science is to know what your are measuring. Which is why I am surprised that The Economist has supposedly issued a report claiming that Japan is the most innovative country in the world (the U.S. is in third place after Japan and Switzerland). How did they arrive at this conclusion? By comparing the number of patents per-capita.

Which would seem to ignore that fact that different countries have different patent laws and different degrees of patent protection. Imagine for a second that U.S. patent law did not allow for making multiple claims in a single application, it is easy to see how the number of U.S. patents could easily be several times its current number.

Which, of course, still avoids the question of whether the number of patents is any indication of innovation. Apparently The Economist thinks so. On the surface it would appear that Microsoft would agree. But Microsoft's own Bill Gates has admitted that software companies must accumulate as many patents as possible to defend against and wage patent wars against other companies. That isn't any definition of innovation that I am aware of. In any event, if such patent warchest accumulation is inflating the U.S. numbers can we assume that 3rd place in world innovation might be too generous? Or might other countries be experiencing similar phenomena?

Of all the more tangible measures of innovation (venture capital funding, entrepreneurship, new product development, etc) I cannot help but find the selection of the abstract, easily gamed, number of patents issued to be an insincere -- if not outright misleading -- metric. Which begs the question: for what gain?

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