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R&D Weathers the Crisis

GENEVA , Dec 21 2011 (IPS) - Research and development, unlike other branches of productive activity, is resisting the ravages of one of the worst financial and economic crises to affect the world in the last 80 years.

This is a conclusion from the World Intellectual Property Organisation (WIPO) Report for 2011, subtitled “The Changing Face of Innovation”, which provides figures for the rate of applications for registering patents, trade marks and industrial designs in 2010 and the first nine months of 2011.

The 2010 statistics from the U.N. agency indicate that China and the United States are the leaders in innovation, but patent application filings from middle income countries have also grown significantly.

WIPO Director General Francis Gurry told IPS that some middle income countries, which belong mainly to the developing world, have markedly improved their R&D performance.

Gurry mentioned Brazil, India, Turkey, Malaysia and, of course, China, currently the global number one for intellectual property applications filed by resident citizens or companies.

The progress of these countries is linked to policies implemented by WIPO since 2007, when it adopted its Development Agenda, fostering a culture of development in all its activities, Gurry said.

“But we are definitely seeing a big new improvement in the middle income countries’ participation in the innovation system,” he said.

Brazil, India and other countries of the global South supported the Development Agenda, aimed at flexibilising rigid intellectual property regulations and facilitating use of the system by developing countries.

China is leading the world in intellectual property activity by residents of the country, a measure of domestic innovation, in all three areas: patents, trade marks and designs. Behind it come the largest industrialised countries, with India taking 10th place.

Turkey heads the next group of 10 countries, followed by Spain and Brazil, with the rest being rich nations of the North. The third group of 10 includes Thailand, Mexico and Argentina, again interspersed with industrialised nations.

The WIPO report says that patent applications in low and middle income economies like Colombia, the Philippines, Ukraine and Vietnam rose by 10 percent or more in 2010, after having fallen in 2009 along with most global intellectual property activity.

There was a strong recovery in global intellectual property activity in 2010, with a growth rate for patents of 7.2 percent, 11.8 percent for trade marks and 13 percent for industrial designs, while the world economy grew by 5.1 percent over that time.

Gurry said that 80 percent of the recovery in patent applications was driven by the United States and, especially, China.

Patent applications in China grew by 24.3 percent in 2010. And for the decade from 2001 to 2010, the Asian giant averaged an annual growth rate of 22.6 percent in patent applications filed.

“So, in the year 2001 the number of patent applications filed in China was 63,000. In 2010 it was 390,000. That’s an extraordinary difference in the course of one decade,” Gurry said.

As for trade mark registrations, WIPO says they are a much more immediate reflection of economic conditions, with a shorter time lag than patents, making trade marks to some extent the leading indicators of what is happening in an economy. Trade mark registrations in developing countries have made relative advances in WIPO rankings compared with the industrialised countries.

Gurry said trade marks “really represent a new product or a new company. In either case, the number of trade mark applications has a direct correlation with the amount of new products being put on the market or the number of big companies being formed.

“Therefore, trade marks are a very dynamic indicator of how healthy the economy is,” he said. “So when we see trade marks growing by nearly 12 percent over 2010, you can see that the economy is rebounding very well, generally.”

Statistics for 2011 are not yet available from the national offices, but WIPO estimates that in the first nine months of this year there has been significant growth in intellectual property registrations.

International patent applications increased by about 10 percent in the first nine months of 2011, and international trade mark applications were up by around seven percent.

“What will happen with the turbulence caused by the sovereign debt crisis is another story,” said Gurry. “I think the essence of the situation is that it’s unpredictable. We are not sure what’s happening.

“In the advanced economies the rate of increase of investment in intangible assets is greater than the growth rate of investment in tangible goods. When you have more investment in intangibles, of course there is more interest in protection of the intangibles, namely intellectual property.”

The latest estimates for R&D – the sources of innovation and intellectual property – are positive for 2012, with global spending projected to grow by approximately five percent, he said.