Patent measures are not the same as innovation measures

Over at the blog IP Finance, Neil Wilkof has a great posting on a recent Economist story on innovation aka patents -- Patent Data and Innovation: Once Again, So Much and Yet So Little. I won't repeat his entire analysis -- you can read it for yourself. However I will stress one point he makes:

First, the article does not really address the connection between patents and innovation. Is it really the case that increased patent filings in China and by Chinese points to increased innovation? Maybe yes, maybe no--the article does not really explain.

My guess is that the article didn't explain because there is little too explain. Yes, patent data is interesting. But it doesn't begin to tell the innovation stroy. For example, patent data doesn't even begin to look at what is being called "hidden innovation." (For more on hidden innovations, see the UK's NESTA report on innovation in industries where levels of traditional R&D investment are low. These include: architectural services: accounting; business and management consultants; legal services; software and IT services; automotive industry; construction; energy; and design services.)

Patent data suffers from the "drunk-under-the-lamppost" problem -- [Late at night a drunk is searching for his lost car keys under a lamppost. Cops comes up and asks him what he is doing? Drunk answers, "looking for my car keys." Cop asks where he last saw his keys (of course the cop has no intention of letting him into the car). Drunk points over to his car. Cop asks, "so why are you looking over here?" Drunk answers, "because this is where the light is."]

Bottom line: patent data tells you a lot about patents. It doesn't necessarily tell you about innovation.