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China as a power of innovation?

WIPO Chief Economist presents the latest trends

The number of patent applications is constantly increasing and investments in high-tech companies from abroad are increasing: With its active innovation strategy, China is making the world sit up and take notice. The country also ranks high at the World Intellectual Property Organization's (WIPO) Global Innovation Index. With 22nd place, China for the first time made it into the top 30 of 127 economies.

“China is the only emerging market country that has managed to build up an innovation economy," WIPO chief economist Dr. Carsten Fink said at a speech at the German Patent and Trademark Office (DPMA). "In economic history, there hasn't been anything like this before - at least not in that size and speed." On Thursday, 8 March 2018, Dr. Fink presented the latest innovation trends at the DPMAnutzerforum, which is organized by the DPMA once a year for its customers

Picture of Dr. Carsten Fink giving his presentation at the  DPMAnutzerforum

Dr. Carsten Fink giving his presentation at the DPMAnutzerforum

But do western companies really have to fear Chinese competition? It is currently difficult to assess the actual quality of Chinese patents, said Dr. Fink: "There's no study that can make a definitive judgment." In any case, the Chinese government is endeavouring to further develop the system of intellectual property rights. In some technologies, such as solar energy, the country has already managed to "be successful worldwide". The fact that Chinese companies are becoming increasingly competitive is already accelerating structural change in the West.

Overall, however, the WIPO ranking is still dominated by Europe, America, South Korea and Japan. According to WIPO, Switzerland has been the global innovation leader for years. The country occupies leading positions in all categories, said Dr. Fink. Switzerland is also a very rich country. "The richer a country is, the more resources there are to invest in innovation."

And what about innovation in Germany? In the WIPO ranking, Germany ranks 9th - one place ahead of the previous year. Above all, this is a result of the efficiency of the German innovation system, says Dr. Fink. In the output ranking, which mainly measures result-oriented factors such as the number of internationally filed patent applications, the country even ranks 7th, whereas in the input list, which primarily evaluates investments in the innovation system, it ranks 17th.

Germany has weaknesses in business start-ups. The density of new companies is higher in other industrialised countries - partly because it is easier to set up companies there. The number of highly qualified women in employment is also rather low by international standards. He was also surprised that relatively little foreign investment is being made in Germany in relation to the size of the economy, Dr. Fink said. Germany has its strengths in logistics. In addition, German companies' investments in research and development are high, as is the number of patent applications.

The WIPO chief economist sees China's success as a great opportunity for the German economy. Growth there is good because it is one of the most important export markets for German companies. As an economist, he sees innovation as a public good anyway: "If a solution to a technical problem is found in China, this solution can be applied all over the world".

Dr. Fink's presentation on global and German innovation trends can be found here. (in German only)

Picture: DPMA

Last updated: 22/10/18 

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