What are the defining characteristics of a successful, national research and development (R&D) policy? That was arguably the biggest question raised by the announcement in Spring that 2011 was a record year for patent filings made via the World Intellectual Property Organisation (WIPO).
As WIPO revealed, filings through its Patent Cooperation Treaty (PCT) system climbed last year to a best-ever total of 181,900. But by itself, that milestone does not convey the more intricate details to be found in figures from individual countries. In Europe, for example, PCT filings from Germany rose by 5.7%, France by 5.8% and Switzerland by 7.3%. Meanwhile, filings from the UK dropped by 1%, Spain and Finland by 2.7% each and the Netherlands by a significant 14%.
For WIPO director Dr Francis Gurry, Europe’s mixed results demonstrate the benefits that countries can yield from having in place finely tuned national programmes for developing intellectual property (IP). In a press conference, he suggested that the figures ‘are related to different strategies adopted during the economic crisis, towards innovation and R&D – but also, more importantly, different capacities to be able to address R&D during the economic crisis’. In other words: preparation through national policy has paid dividends for France, Switzerland and Germany.
Gurry’s view was supported by WIPO chief economist Carsten Fink, who added: ‘In any given country, patent filing trends are influenced by a number of factors. The business cycle does play an important role, and certainly, if the economy is on a downward trend, that does affect patent-filing behaviour. The industrial structure of countries’ R&D activities matters in that regard.’
So, what kind of policies have France, Switzerland and Germany adopted that have helped their filing figures to weather economic uncertainty?
Taking the ‘low road’
In a February paper for the Austrian Institute of Economic Research, Professor Karl Aiginger wrote that – until recently – French innovation was driven by so-called ‘Grand Projects’, in which the State worked alongside corporations to launch large-scale, industrial ventures. Aiginger credited with success two of those schemes: Airbus, in which the French government and its partners helped to launch a leading aerospace manufacturer; and Ariane – the rocket series that gave Europe its best-known space programme.
Aiginger contrasted those projects with Minitel: a prototype internet launched in 1982. In some ways groundbreaking, Minitel enabled some of the very earliest e-commerce activity, making it possible for French citizens to pay for goods or tickets with the use of a national computer network. However, Minitel had its limitations: its user base failed to grow beyond its initial, middle-class adopters; it ran on special terminals that could not run anything else, so there was no interoperability; and, as a consequence, it failed to trigger a hoped-for resurgence of IT research – indeed, it may even have stunted the adoption of the internet in France.
Grand Projects, wrote Aiginger, were examples of ‘high road’ national innovation policy: conversations played out between State and industry bodies that could – if not carefully managed – lapse into elitism (a la Minitel). Recently, though, French emphasis shifted to a ‘low road’ model, in which governments work to stimulate R&D activity at a grassroots level. That model has been fulfilled via a series of policies such as:
i) refocusing from a top-down system of project management to a bottom-up framework;
ii) creating the tax-relief scheme Crédit Impôt Recherche, which gives companies a 50% tax break on R&D spending in the first year, 40% in the second and 30% in each subsequent year, up to a value of €100m. In 2008, this scheme drew more than 2,000 foreign companies to invest in R&D in France;
iii) taking a broader approach to innovation in which small and medium-sized enterprises (SMEs) have a more prominent role; and
iv) encouraging universities to form trilateral relationships with companies and lab outfits.
Switzerland’s performance, meanwhile, has won plaudits from the Inventory of Research and Innovation Policy Measures – an ongoing scheme by the European Commission to monitor R&D strategies in European countries, whether they are part of the EU or not.
The Commission notes that, in 2007, Switzerland announced its Message for the Promotion of Education, Research and Innovation – a four-year plan for the years 2008 to 2011, in which every part of the Swiss government agreed to implement a series of steps such as supporting knowledge transfer from universities to businesses; funding research to develop Switzerland as a centre of creative thought; and investing in the promotion of young scientists. This policy block – which has effectively covered Swiss R&D for the duration of the economic crisis – is set to grow: following an interim extension of its measures for 2012, an expanded phase is planned for 2013 to 2016.
With the message agreed in the year before the financial crisis struck, Switzerland launched further measures in the aftermath. As the Commission notes, the country unlocked a €470m spending package in 2009 to protect its economy. Some 7% of that package – around €32m – was channelled into research and innovation, boosting the country’s basic R&D budget by €18m. That covered increases of €7m for the Swiss National Science Foundation, and €9m for federal universities and research institutions. Plus, the Swiss Commission for Technology and Innovation (CTI) created the Innovation Voucher Instrument – a tool that enabled companies to tap into the resources provided by universities.
Like Switzerland, Germany locked in key innovation policies prior to the financial crisis. One of the most significant was the 2007 Higher Education Pact, which set the stage for massive funding increases across the country’s universities and research centres. In the pact’s first phase from 2007 to 2010, €565m of extra funds were released with the aim of creating larger numbers of highly qualified employees who could help to improve the nation’s R&D quality. Now, the policy is into its second phase, scheduled to go on until 2020, with a further €1.7bn planned to roll out up to 2015.
In tandem, Germany is also running its ambitious High Tech Strategy – an initiative embracing every area of industry and every government department, with an aim to increase cooperation between grassroots R&D workers in scientific institutes and corporate leaders who can monetise the resulting IP. According to the Federal Ministry of Education and Research, the strategy’s overall mission statement is ‘to create lead markets [and] further improve the framework conditions for innovation’, with an emphasis on ‘the benefit of new technologies for humankind’. In particular, the strategy is seeking to develop innovations in the fields of environment and energy; health and nutrition; mobility; safety and communications. Adopted in 2006, the scheme will also run until 2020.
CPA Global’s Vice President IP Outsourcing, Haydn Evans added: ‘With policies adopted well in advance of the financial crisis, and strong government commitments to see them through, it is clear that France, Switzerland and Germany have benefitted from their preparations. Other European countries should be learning from these countries on how they can improve their innovation both domestically and abroad. However, countries in Europe and the region as a whole need to continuously strengthen their competitive advantage through better innovation – in order to compete more effectively on the global stage.’
TOP 10 EUROPEAN FILERS FOR PCT PATENTS IN 2011
1. Robert Bosch Corporation, Germany (1,518 – up 217 on 2010)
2. Koninklijke Philips Electronics NV, Netherlands (1,148 – down 285 on 2010)
3. Telefonaktiebolaget LM Ericsson, Sweden (1,116 – down 31 on 2010)
4. Siemens Aktiengesellschaft, Germany (1,039 – up 209 on 2010)
5. BASF SE, Germany (773 – down 44 on 2010)
6. Nokia Corporation, Finland (698 – up 66 on 2010)
7. Schaeffler Technologies GMBH & Co KG, Germany (422 – up 255 on 2010)
8. Bosch-Siemens Hausgerate GMBH, Germany (421 – up 50 on 2010)
9. Commissariat a L'Energie Atomique et aux Energies Alternatives, France (371 – up 63 on 2010)
10. Nokia Siemens Networks OY (332 – down 13 on 2010)
For WIPO’s full list of 2011 PCT applications by country, click here