TECHNOLOGICAL INVENTION 

 AND INNOVATION 



This section presents indicators of inter- 

 national trends in technological invention and 

 innovation, as well as transactions in technology 

 involving the United States. Indicators of 

 inventions are based upon patent awards in the 

 United States and abroad, and include the 

 identification of areas of technology in which 

 recent patenting activity by foreign countries in 

 the United States was especially high. Innova- 

 tion indicators are based on major new products 

 of a technological nature, and include trends in 

 the proportion of such innovations produced by 

 each major nation, the time between invention 

 and market introduction, and the "radicalness" 

 of the innovations. Transactions in technology, 

 measured in terms of international sales of 

 technical "know-how", are used as an ap- 

 proximate indicator of the relative state of U.S. 

 technology. 



The "patent balance" 



Inventions of new and improved products and 

 processes may represent actual or potential 

 advances in technology. Those inventions which 

 are of sufficient originality to be patented 

 provide a basis for indicators of the inventive 

 output of countries. The use of patent statistics 

 for this purpose, however, has several 

 limitations. Some inventions — even major 

 ones — are not patented. And those which are 

 patented vary greatly in their technical and 

 economic significance, with only a small propor- 

 tion of the total number of inventions ultimately 

 reaching the market. In addition, the criteria for 

 awarding patents differ from country to coun- 

 try; not only does the rigor of tests for originality 

 vary, but so does the extent of protection 

 afforded by patents. The latter factors deter- 

 mine the relative ease and value of obtaining 

 patents in different countries. 



The number of patents granted in individual 

 countries is not an adequate measure of inven- 

 tiveness for purposes of international com- 

 parisons. A more meaningful measure relates 

 the number of patents granted to nationals with 

 those granted to foreigners in each country. 

 Such an index-" reflects the relative success of 



-" When applied to the United States, the index is the 

 number of patents granted to U.S. nationals by foreign 

 countries minus the number of patents granted to foreign 

 nationals by the United States. 



countries producing inventions of sufficient 

 potential significance to warrant international 

 patent protection. Since it is generally more 

 costly to obtain such protection, the index tends 

 to focus on those inventions which are thought 

 to be most important. 



Figure 1-10 presents the total number of 

 patents granted to U.S. nationals by ten coun- 

 tries (Canada, West Germany, Japan, U.S.S.R., 

 United Kingdom, and five other European 

 Economic Community countries, including 

 Belgium, Denmark, Ireland, Luxembourg, and 

 the Netherlands); the number granted to 

 nationals of these countries by the United 



Figure 1-10 



Patents Granted to U.S. Nationals by 

 Foreign Countries and to Foreign Nationals 

 by the United States, 1966-73 



(Thousands) 

 50 



U.S. balance 



30 — 



10 — _ 



US, patents to 

 foreign nationals' 



1966 



•67 



■69 



I 



70 



I 

 72 



73 



' including Canada, West Geimany, Japan, Uniled Kingdom USSR 

 Denmark, Ireland Luxembourg, and the Nettierlands 

 SOURCE World Intplleclual Property Organization 



16 



