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  • July 25, 2018
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West spends billions on research, but Asian innovators beat them to market

The US, UK and others are struggling to grant patents

The US and other Western governments are sinking more money into research but are producing less than half as many patents as South Korea for the same investment, according to a report.

This is due to the US, UK and EU countries’ inability to take new ideas to market, said the 2018 Innovation Arms Race report. As a result, China, South Korea and Singapore will take their place as global innovation leaders by 2029, the research found.

“There’s no money set aside for commercialising inventions, which need investment,” said Rosemarie Truman, CEO of the Centre for Advancing Innovation (CAI), a public-private partnership that focuses on connecting research with entrepreneurs. CAI co-published the report with PatSnap, an R&D analysis firm.

The report says that the US, UK and EU countries are failing to convert patent applications into grants, which give the owner of a product, process or solution exclusive rights over their work.

“We’re not maximising the impact of investments we’ve already made,” said Truman. “[The US] puts money into R&D and it goes nowhere. There’s no governance around what happens after you spend money on inventions.”

Both the US and the UK produce about 600 patents per $1billion in research spending. Meanwhile, South Korea produces 1,562 patents for the same amount spent, and the country’s efficiency at turning patents into grants has growth by 18% over 1995 to 2015. India, Israel and Singapore are expected to see the highest growth in patents granted through 2035.

“Many of the inventions we have sitting on the shelf are things that work — but they go nowhere”

The report collated data from WIPO, the United States Patent and Trademark Office, the World Bank and the UNESCO Institute for Statistics.

Over the past 30 years, GDP returns on R&D spending — which is about $2.19 trillion globally per year — decreased by 65% worldwide. This is in part due to the fact that in the US, UK and EU, patent growth rates have flattened.

“Many of the inventions we have sitting on the shelf are things that work,” said Truman, citing innovations commissioned and left unused by the US’s National Security Agency and NASA. “They’ve been stress-tested and deployed, and we’ve spent millions and millions of dollars on them. But they go nowhere.”

There are several reasons for this. Firstly, in the US, EU and UK, scientists are incentivised to publish their work — but not to bring it to market.

“It’s what inventors’ reputation is based on at universities, federal labs and hospitals — their pay is based on what they publish,” said Truman. “In China and South Korea, meanwhile, they’re driven to commercialise.”

Secondly, in Western scientific communities, unsuccessful research is typically not published. This wastes money and resources, as failed experiments are repeated — a problem that is all too familiar to policymakers.

Having done the same report six years ago, Truman said the biggest surprise was South Korea: “It’s gained a lot of momentum since then because it’s investing in itself. Government is very efficient with the dollars it spends and produces high quality patents.”

To catch up, Truman said Western countries’ best recourse is to establish an intermediary whose job it is to systematically commercialise the innovations scientists are producing. It would sit between universities, hospitals, federal labs and commercial entities. Its job would be to evaluate inventions, conduct due diligence and help get them on the market.

“There’s a lack of realisation currently that [innovation] is not going to grow by itself,” Truman said. — Jennifer Guay

(Picture Credit: Unsplash/Alex Knight)


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