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Technological innovation in the BRIC economies: a comparative study based on patent citation data demonstrates the premium these countries place on innovation.

Article Excerpt
In a knowledge-based economy, innovation is far more important than land, physical capital, or labor as the primary factor affecting a nation's economic growth and development. Technological innovation can circumvent entry barriers and help a country maintain technological competitiveness. Similarly, a country failing to innovate may be outpaced economically as competitors devise more advanced and more marketable products. Effective innovation management is thus a key to corporate success, technological prowess and national economic development (1). This research examines technological innovation in different countries.

Several indicators of technological innovation have been proposed and used. The most common measures can be categorized as measures of R&D, patents and new products. The present study analyzes patents as a major measure to elucidate technological innovation in accordance with previous studies by Ernst (2) and Tseng and Wu (3) for the following reasons:

First, patent data are accurately recorded, readily accessible, quantifiable, and easily manipulated for more detailed analysis by technological field, product or patent holder. Second, analysis of patent grants within a single country provides an objective and consistent measure of technological innovation, because patents are examined and eventually granted by a single national patent office. Finally, in comparison with other sources, patents are often the only timely measure of rapid technological change, particularly in the context of global competition.

Over the next 50 years, the BRIC economies (Brazil, Russia, India, and China) are expected to become a much larger force in the world economy. Goldman Sachs projected that, in less than 40 years, the combined GDP of the BRIC economies may collectively exceed that of the G6 in U.S. dollar terms (4). The combined GDP of the four BRIC countries in 2007 was an estimated US$6.8 trillion, approximately 13 percent of world GDP, up from 8.5 percent in 2002. Despite the expected impact of the BRICs on the world economy in the coming decades, studies of technological innovation in the BRIC countries are rare. Restated, this study investigates three main issues related to BRIC technological innovation 1) different indicators of technological innovation are examined to compare technological innovation capability in the four countries; 2) innovation configurations in the BRIC are compared; 3) absolute and relative innovation strengths of BRIC in 31 technological fields are compared.

Comparing Technological Innovation Capability

Early studies typically examined patent count as a measure of innovation capability; however, more sophisticated analyses have been made by examining patent citation statistics (5, 6). Because patents may vary considerably in their ultimate economic impact, it is necessary to select these indicators correctly (7). The quantity of patents issued to a company in a given year is far less significant than patent quality. Numerous validation studies have demonstrated a significant positive relationship between patent citations and the eventual technological impact of a patent (6,8,9). The patent and citation data set used in this study consists of all patents granted by the U.S. Patent and Trademark Office (USPTO) to BRIC inventors from 1976 to 2006. This study investigated only utility patents, and not design or plant patents....

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