World class patents in cutting-edge technologies

As innovation goes, so goes the economy

Innovation is crucial for economic success. And patents, in turn, form the fundamental foundation of innovation. As a result, numerous studies have relied on patents as an indicator of a nation’s future competitiveness. So, nothing new to see here? No, far from it! Our latest study breaks with the usual approach in three ways: First, it takes into account the huge differences in the quality of patents and standards of patent definitions by focusing only on the ten percent most important patents — what we call “world-class patents.

Quantity vs. quality

The most important advantage of our approach is that it brings the patents into focus which really matter. Wind energy technology is a good example when explaining the discrepancy between the great mass of patents and the elite world class patents: All in all, 2019 saw 40,011 wind energy patents worldwide until September 9th. 16,740 of these were from China. Out of these, however, only 300 are world class patents based on their market coverage and their citation by official examiners in patent offices.

Patent hyperpower United States

The results show that the unipolar moment of the United States is not over yet — at least when it comes to world class patents. In 2000, the United States held the most-world class patents in 55 of the 58 technologies examined. In 2019, this number was only down slightly. It still leads in a staggering 50 technologies, taking second place in each of the other eight ones. It is particularly far ahead in the fields of health and security.

China is catching up fast

While the U.S. lead is impressive, China’s dynamic is even more so. In 2000, China was not a serious challenger in intellectual property: In not a single of the 58 technologies, did it hold a position among the five nations with the most world class patents.

Watch out for South Korea

So far, so foreseeable. Given its size and research potential, it is no wonder that China has indeed been able to not only produce many patents but also many world-class patents. However, East Asia’s rise is not limited to its foremost powerhouse only. While Japan remains a very formidable player (holding most world class patents in three technologies), South Korea’s growth dynamic has secured it a spot in the top echelon, too.

Europe needs to step up its game

So far, the rise of East Asia mostly goes at Europe’s expense. This is particularly true for France. In 2000, it held the top 5 spots in 41 of the 58 technologies examined. In 2010, the number had already dropped to 19. In 2019, it stood at 12th. Both the United Kingdom and Germany have also witnessed sharp declines in the past decade. The UK dropped from 40 in 2010 to 21 top 5 positions in 2019. Germany, Europe’s strongest patent power, still earned an impressive 47 top 3 positions in 2010 but merely 22 in 2019.

World-Class Patent Oligopoly

The strong concentration of world class patents in a few major countries is striking — and a cause for concern about a growing divide between them and the rest of the world. Besides the seven nations mentioned so far, only Canada ranks rather high across most of the spectrum of cutting-edge technologies, making the top 5 in nine of them.

More to come

In this post, we have given an overview of the central findings of the study. Over the next few weeks, we will take a more detailed look into the strengths and weaknesses of individual countries and regions. Stay tuned, or — if you cannot wait any longer — check out the full study.

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Global & European Dynamics

Our mission on this blog is to shed light on Europe’s role in the world economy. https://globaleurope.eu/