What is this metric and why is it important?
Patents are the primary mechanism firms use to protect intellectual property that they deem valuable. A patent is a useful measure of innovation insofar as “an idea that is patented must be valuable or time and money would not have been expended in patenting it.” Here we measure patents as the number filed per million people in the country.
How is Canada doing?
- Canada’s performance in patent creation is quite poor; if using the applicant's country of origin, Canada only filed 62.3 patents per million people compared to an OECD average of 132.6 in 2017.
- If using the inventor's country of origin, we do a little better, filing 78.1 compared to an average of 112.5—implying that Canadians often make inventions for foreign firms.
- There has been no growth in patents filed by Canadians over the last decade, and there even has been a slight decrease of 9.0 applications per million people.
A patent is a government-granted right to have exclusive power to sell, reproduce, or use a particular invention. In other words, a patent grants protections on an inventor's investment by granting temporary monopoly rights. Patent counts are gathered by the OECD from the European Patent Office's Worldwide Patent Statistical database (PATSTAT). Here, we use patents filed under the Patent Cooperation Treaty (PCT). This has two main advantages: One is that local offices can inflate the number of patents, and the second is that using one international source avoids double counting.
A primary limitation of patent count as an indication of innovation is that not all patents are equally viable; many will not become products, and many valuable ideas are not patented, as firms often use other methods to protect intellectual property.
For the purposes of comparing provinces, the OECD used to report patent count by region, but stopped reporting that data in 2013.