Is the UK losing its innovative edge?
Joe Wright, 18 February 2015
Innovation is at the heart of a healthy economy. The determination to create new technologies, to find an easier and more exciting way of living, led to the creation of the modern economy as we know it. Innovation solves problems. It serves new purposes, frees up time for other enterprises, and creates new businesses and jobs in the process. Established companies live and die by their ability to adapt and capitalise on new inventions; the same could be said for nations.
Innovation is also an attribute notoriously difficult to measure. One way is to look at the success of elements which contribute to it, like good education, particularly in STEM subjects (science, technology, engineering and maths), or the supply of patient finance, which is needed to support new ideas through their infancy. But innovation also needs entrepreneurial spirit to puts these elements to good use, to take a risk.
One way of judging innovation is to look at how many patents are filed in a country. Patents signal clear intent to take an original idea and put it to use, especially considering the fees, time and energy required to apply for one. The more a population files, the higher its entrepreneurial spirit.
The total number of filings worldwide grew by 9 per cent in 2013, according to the World Intellectual Property Organisation. China, the US, Japan, and South Korea have consistently produce the highest number of applications over the last decade. The 9 per cent increase is largely due to a surge in applications filled in China, which increased by a quarter. The US, saw a more consistent 5 per cent growth. In relation to population (applications per million people), Japan came top in 2012.
As for the UK, we have a mixed set of results. The bad news is that applications fell by a substantial 17 per cent during 2013, according to the Intellectual Property Office. This is less dramatic when considering the changes in ‘successful’ applications, which fell by three per cent, but still marks a more than routine fluctuation in numbers.
The particularly steep fall is part of a recent European trend – the European Patent Office also registered 0.4 per cent drop in applications over the same period. Longer term, however, the UK is producing worrying signs. In 2004, when Japan was once again top of the list for applications per million, the UK came tenth – behind South Korea, the USA, Germany, Australia, New Zealand. Today it does not feature on the list at all.
It is difficult to know how to foster innovation. Big inventions, such as those which led to the industrial revolution, could rely more on luck and the talents of a few than anything else. It is also obvious that economic growth is comprised of far more important than good ideas – the UK managed the highest GDP growth among the developed economies last year, while Japan continued to struggle. But in the longer term, while the global economy continually changes, innovation allows a country to reinvent itself.