Studies

by Mike Masnick




New Study Shows Patents And Innovation Are Not Related

from the no-clear-connection dept

There's an annoying trend among many to assume that patents are a proxy for innovation. In fact, this leads to the false assertion that more patents or more patent applications somehow means more innovation. However, as we've obviously seen, the reverse can often be true. We've shown plenty of examples where patents have been used to hold back innovation rather than encourage it. It's nice to see that there's some more data supporting this as well. John Bennett at Against Monopoly points us to a new paper from Booz Allen Hamilton, looking at 1000 companies that do serious research and development, where they found no link between patents and innovation. Patents, they note, show no statistical relationship to profits. They point out that few patents actually have any real impact on innovation, and often the most innovative things have no patents at all. Another interesting finding in the study is that big companies aren't very good at leveraging their scale to innovate. This is an issue that comes up often when we discuss patents. People make the claim that small companies can't out-innovate large companies because those large companies have all the money. However, the study suggests that's not true at all. Larger companies can be woefully bureaucratic, slow, inefficient and risk averse. That leaves plenty of opportunity for smaller companies to out innovate the larger ones despite the appearance of a disadvantage in money and scale.

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  1. identicon
    Anonymous Coward, 9 Jan 2007 @ 9:56am

    Re: Re:

    I should add that the only real lesson you should learn from econ 101 you missed: that there is always another layer of costs and benefits to untangle.

    Do not confuse the first layer of analysis with the only layer. It is only the coarsest of factors. Investigate chaos theory and discover how even the finest factors can work just as well to jar things in entirely different directions.

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