Study Explores ‘World Class Patent’ Trends in East Asia, North America and Europe

“The study noted that the United States remains the world ‘patent superpower’, but East Asia has developed by ‘leaps and bounds’ in the last 10 years.”

world class patent trends On June 3, independent foundation Bertelsmann Stiftung published a study titled “World class patents in cutting-edge technologies – The innovation power of East Asia, North America and Europe,” which examined how individual countries have advanced in the development and filing of “world class patents” between 2000 and 2019. The study considered “world class patents” to be the most important 10% of patents filed in 58 cutting-edge technologies grouped into the following ten categories: environment, energy, nutrition, infrastructure, digitalization, security, materials, health, mobility, and industry. The study noted that the United States remains the world “patent superpower”, but East Asia has developed by “leaps and bounds” in the last 10 years. The study focused its analysis on East Asia (China, Japan, and south Korea), North America (United States and Canada), and Europe (the 27 European Union countries (EU-27)), noting that countries outside of these three world regions were not considered because they have seen very little growth in the last 20 years.

East Asia

While the study showed that North America and Europe have the highest patent efficiencies, it noted that East Asia has “exhibited an unparalleled inventive spirit” and has increased its innovation power in many cutting edge-technologies, such as energy, nutrition, infrastructure, industry and environment. However, while many patent applications are filed in East Asia, the share of “world class patents” filed in East Asia’s economies with the greatest patent power, i.e. China, Japan, and south Korea, was actually below 10% in most years between 2000 and 2019. The study noted that China has been striving to produce quality products and has launched the “Made in China 2025” innovation project, which seeks to raise China to the top of the rankings in key economic sectors, including aircraft construction, electric vehicles, and computer chip production. China holds a large number of top patents in 42 of the 58 examined technologies and has particularly excelled in patents in the area of environmental technologies. For example, China holds more than 25% of the world’s patents in recycling and about 36% of the patents in water treatment. China’s regional neighbor, South Korea, has also experienced great growth, especially in the areas of battery and digital infrastructure technologies. Further, although Japan has been experiencing slower growth, it remained the leader in world class patents in batterytech, with a share of over 30%. The study noted that Japan has also been making progress in the area of electric vehicles, and remains steady in the areas of smart factory, robotics and process automation.

North America

The United States is the world’s top innovation center “by far” and holds the largest number of world class patents, which cover 50 of the 58 technologies reviewed in the study. The study noted that United States particularly excels in the fields of health, i.e. biotechnology and pharmaceuticals, and security, i.e. “production of banknotes, passports, and drug packaging, secure access to and use of data on networks using firewalls, anti-virus software, encryption and other measures, and the authentication of persons and objects in the digital world.” The study explained that seven of ten companies that spend the most on research and development are located in the United States, including Amazon and Google. The study also noted that the United States also has the greatest lead in the area of digitalization, which includes artificial intelligence (AI), cloud computing, big data, quantum computing, blockchain and virtual/augmented reality. For example, the United States leads in AI with a world share of 45%. Although the study focused much of its North America analysis on the United States, it did note that Canada ranks high in the area of digitalization and has potential to gain strength in the infrastructure field. The study also noted that although North America leads in many areas, China’s growth has exceeded the United States in most areas.

Europe

The study noted concerns that Europe is falling behind because digitalization is progressing slowly in Europe “at a time when the fourth industrial revolution is about to fundamentally change the traditional forms of economic activity.” Noting that “Europe is threatening to develop an innovation gap”, the study explained that the application of new digital technologies to existing industries has been lacking. The fact that Europe has fallen behind is particularly apparent in areas such as digitization, batterytech, solar thermal energy, photovoltaics, and environmental technologies such as recycling. However, the study pointed out that Europe remains strong in the area of health, which includes pharmaceuticals and biotechnology. Further, the EU-27, i.e. the 27 European Union countries, holds the world’s top position in the fields of wind energy and functional food. The study also noted that Germany excels in additive manufacturing (3D printing), where it holds 15% of the world’s patents, and robotics.

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Join the Discussion

8 comments so far.

MaxDrei
June 11, 2020 03:22 pm
Interesting to consider the wheeled land vehicle industry. Here in Germany, there is Angst, that Mr Musk has got so far ahead with his patent portfolio covering electric-powered vehicles that the race is already lost. So now, the latest wheeze in Germany is to aim to become Top Dog in the field of fuel cell-powered vehicles, before the world-wide market for well-engineered internal combustion engine powered vehicles expires.

I wonder how that will work out.

I don’t see Elon Musk as an “individual inventor” though. Do you?
Ternary
June 11, 2020 01:21 pm
MaxDrei, so many write-ups exist about China. No need to regurgitate them here. What strikes me about the entrepreneurial spirit of China is that the entrepreneurs have not absorbed the 40 years or so of indoctrination b.s. about socializing capital and production means. Good luck to the Chinese government to try to put that genie back into the bottle. Like the US they will slaughter the goose that lays the golden eggs if they try.

You probably should be more concerned about the conclusions of the report than about what I say about China. I maintain that there is a causal connection with promoting individual inventors (by making getting a patent easier) and innovation. A first step is to recognize that connection and address it. However, institutionalized policies are often unable to recognize this and are unable to address it.

Germany in particular has been in this situation before in the 19th century. A German delegation visiting the Philadelphia Century World Fair in 1876 came back with the news that German exhibited machines and products were of abysmally poor quality and with little to no innovation compared to what was produced in the USA, which applied new technology. This ultimately led to an overhaul of the German education system and introduced (with great difficulty) the system of Technische Hochschulen.

We in the USA have been in this situation before also. As we are now. We just never learn it seems, as we turn to protect the establishment. Hammer, in his Reengineering the Corporation, called it paving the cow paths. That is, what occurred by way of habit is being set in concrete (or asphalt). The establishment doesn’t want to be re-engineered. We see it on a daily basis.
MaxDrei
June 11, 2020 05:34 am
That may indeed be so, anon. I don’t doubt you. It was ever thus, in Asia. I’m just trying to find out what Ternary means with his “China understood…” sentence.

Is he perhaps referring to the individuals you met when he writes “China understood” ? It seems unlikely to me but perhaps not to you.

Or does he mean the government, the ruling Party, the establishment? But then, if it’s a society that favours, encourages entrepreneurs, where better to look than Russia, amongst the owners of the world’s largest yachts.

I suspect what Ternary has in mind is that China has set up, relatively recently, a fully-functioning patent system as part of its national plan for the future of the Middle Kingdom. Like the rest of East Asia in previous decades, the patent system is there for defensive purposes, to keep the way clear for marketing products made by China. I’m more than a little sceptical whether the Party in China has any thoughts about “unleashing” anything, even entrepreneurship. I think the Party’s instincts and actions are entirely in the opposite direction, keeping an ever tighter leash on everything that moves.
Anon
June 10, 2020 06:17 pm
MaxDrei – while purely anecdotal, I would confirm Ternary’s views. I studied abroad in China (for my MBA). The people I interacted with — outside of the ruling party and government control itself — were some of the most capitalistic minded people that I have ever met.
MaxDrei
June 10, 2020 02:31 pm
Ternary, I read your thoughts with interest. Just one thing though, that I stumbled over. You wrote: “China understood better that it has to unleash individual entrepreneurship and invoke an affordable patent system to protect its technology base.” What is the foundation of that assertion? I’m curious.
Anon
June 10, 2020 09:00 am
Sadly Ternary, I concur with your views.
Pro Say
June 9, 2020 08:21 pm
“The United States is the world’s top innovation center ‘by far’ and holds the largest number of world class patents, which cover 50 of the 58 technologies reviewed in the study.”

Unless Congress, SCOTUS, or the Federal Circuit return patent protection to all areas of innovation by killing (or, in the Federal Circuit’s case by applying them as SCOTUS intended) the unconstitutional Alice / Mayo, things are going to look a whole lot different come 2030.
Ternary
June 9, 2020 06:28 pm
Another European Study that looks at innovation from an institutional point of view. It confirms, of course, what we already suspected: America is still a leader, but being challenged by Asia (in particular China) with Europe falling behind.

The study is based on counting patents. If patents are so important, perhaps Europe should do something about the cost of obtaining a patent. The report observes: “Moreover, Germany brings about barely any disruptive innovations, which are those that fundamentally change the market rules or consumer usage behavior” which probably applies to the whole of Europe.

A patent is not a sign of commercial strength per se. How a patent is leveraged into commercialization is what counts. That is where the strength of the US is or rather was. A patent supposedly in America helped a start-up company to gain ground, not hamper it and drain it of funds and advantage. No more here.

China understood better that it has to unleash individual entrepreneurship and invoke an affordable patent system to protect its technology base.

Europe never understood or cared about the role of the individual as an engine for innovation and economic growth. We start to ignore it and China promotes it. Thus we are barely keeping up, China is gaining ground and Europe is falling back. What else is new?

This is not to diminish the study which is fun to read, if you are into these things like I am. However, it is disappointing from the perspective that it never touches on the real issue: how do you get inventors to invent and start a company? That companies get patents is not news. That they are unable to leverage all these costly patents into meaningful commercial innovation even less so.

What would be news: Europe needs more independent inventors and will restructure its patent system to promote start-up efforts in technology. (You may replace Europe with USA, to create equally exciting news).