In 2009, the poor economy took its toll on inventive activity. The World Intellectual Property Organization (WIPO) reported a 4.5 percent decline in patent filings.
But this decline was not even across all countries. The major industrialized nations of the West tended to see reduced patent filings. The WIPO reported that filings declined 11.4 percent in the U.S., 11.2 percent in Germany, 3.5 percent in the United Kingdom, 1.6 percent in Switzerland, 11.3 percent in Sweden, 5.8 percent in Italy, 2.2 percent in Finland, 7.5 percent in Australia, and 17.2 percent in Israel.
However, not all nations saw their patent filings decline. In particular, filings rose in three Asian nations. In Korea, patent filings increased 2.1 percent. In Japan, they increased 3.6 percent; and in China, they rose a whopping 29.7 percent.
The changes in 2009 mirrored patterns in 2008, where declines were seen in many Western nations, but increases were observed in Asia. In 2008, in the U.S., patent filings declined 1.0 percent, in Australia they went down 1.2 percent, in the United Kingdom they declined 0.4 percent, in Italy they decreased 0.2 percent and in the Netherlands they fell 0.1 percent. But in China, applications went up 11.9 percent, while in Korea they increased 12 percent and in Japan they grew 3.6 percent.
In the foreword to World Intellectual Property Indicators 2009, WIPO Director General Dr. Francis Gurry wrote, “History has shown … that companies and countries which continue to invest in new products and innovation during times of economic recession will be those that will be best positioned to take advantage of the recovery, when it arrives.”
If Dr. Gurry is right, then the Great Recession has done harm to American competitiveness in high technology. Although the U.S. is the leading nation in the invention of new technology, it cut back on that activity during the recession. Several Asian nations, most notably China, did not.
The slowdown in the U.S., coupled with acceleration in China, allowed China to catch up with the U.S. in inventiveness. To paraphrase Dr. Gurry, this means that China is situated better to take advantage of the budding economic recovery than the U.S.
* * * * *Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool’s Gold: The Truth Behind Angel Investing in America; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By.