How Good Are Patents as Innovation Indicators? Evidence from German CIS Data

Alfred Kleinknecht and Henk Jan Reinders

in Innovation and Growth

Published in print September 2012 | ISBN: 9780199646685
Published online January 2013 | e-ISBN: 9780191748998 | DOI:
How Good Are Patents as Innovation Indicators? Evidence from German CIS Data

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Confronting patent applications to a ‘true’ measure of innovative output in the German CIS, the chapter concludes that patent applications are mainly done by innovators that develop new (physical) goods. Compared to goods innovators, service and process innovators show quite poor patenting rates. Collaboration with universities increases the propensity to patent, while collaboration with other partners does not. An innovator’s orientation to local and national markets reduces, while international market orientation increases the probability of applying for patents. The estimates suggest dividing industries into two classes: high versus low patent propensity industries. Low patent propensity industries include all services industries as well as most traditional manufacturing industries. The probabilities estimated might give a clue to users of patent databases about the extent of their measurement bias when using patents as an innovation indicator. Especially service oriented innovations may not be equally captured by patent data.

Keywords: propensity to patent; innovation indicators; R&D; product innovation

Chapter.  4763 words.  Illustrated.

Subjects: Financial Markets

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