Thursday, 14 July 2016

Innovating in the Digital Economy: when patents don't tell the whole story

The Global Information Technology Report 2016: Innovating in the Digital Economy has recently been published; you can access it online here. A comprehensive survey of the subject, it weighs in at 306 pages. Its pedigree is impressive too: the editorial team consists of Silja Baller (an economist who specialises in international trade as well as regulation and competition issues with the World Economic Forum), Soumitra Dutta (dean and professor of management and organizations in the Samuel Curtis Johnson Graduate School of Management, Cornell University) and Bruno Lanvin (an Executive Director of INSEAD's European Competitiveness Initiative Global Indices projects, as well as a Board Member of ICANN).

This Report is the fruit of a special project within the framework of the World Economic Forum’s Global Competitiveness and Risks Team and the Industry Partnership Programme for Information and Communication Technologies. Unlike so much expert literature, this Report does not shy away from talking about patents: the p-word is used nearly 350 times, and gets a plug in Key Finding 1. There the Report states:
"The digital revolution changes the nature of innovation. One of the key characteristics of the digital revolution is that it is nurtured by a different type of innovation, increasingly based on digital technologies and on the new business models it allows. In addition to making traditional research tools more powerful, it allows for new and near-costless types of innovation that require little or no R&D effort. Examples include the digitization of existing products and processes, distributed manufacturing, blockchains, and advertising-based “free services” as well as the prospect of more “uberized” activities in multiple sectors, including transport, banking, entertainment, and education. 
The NRI [= Networked Readiness Index] data show that the minds of business executives around the world are increasingly focused on innovation, as reflected by the steady upward trend in firms’ perceived capacity to innovate. Traditional measures for innovation, such as the number of patents registered, are picking up only part of the story. Instead, new types of innovation, such as business-model innovation, look set to become an important part of the innovation story: executives in almost 100 countries report increases in the perceived impact of ICTs [= information and communication technologies] on business-model innovation compared with last year".
Seven European countries make the Top Ten
Previous Aistemos blogposts on trade secrecy have commented on the problems faced in analysing developments in a sector in which innovatory trends and activity are not easily susceptible of tracking because they are not visible through rights registration systems. This is why businesses built on trade secrets and many designs and copyrights, can slip beneath the analysts' radar. 

The absence of perfect information about intellectual property right holdings is both a challenge to the analytics industry and a reminder that, where perfect data is not available, it is imperative to make the best use of such information as is available. This includes data concerning IP litigation and licensing deals as well as corporate transactions and the regulatory activities of competition authorities. 

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