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2007-01-21 Innovation Metric

Patents used as an innovation metric ? where is the alternative ?

The patents are often used as defensive tool against other aggressive patenters. Red Hat is registering patents in order to keep a portfolio against other companies playing unfair (if you can really play fair in the patent system but it's another discussion) in the software business. They keep the promise that they won't enforce their patents against software licensed under a free software license. The term "protection" is often used in the patent system but it's not often for protecting your invention but mainly to protect you against the potential racketeer.

Beside the "racketeer" protection, there is a very common use of patent : the innovation metric. A classical argument in favor of patent is to have such system to evaluate the innovation level of a company, a country or a region. The number of patent application is used to build dozen list of most innovative countries or the most favorable area in the world where investor should put money… Of course, we all know that only relying on the patent applications to build a kind of innovation index is a very truncated view where and when innovation pops up. Investors often relies on the capacity of a start-up to fill patents before doing large investment. Start-ups may have done a lot of research in development in a product or a service without having the ability to fill application. But you have other ways to evaluate the innovation level of start-ups like the number and the respective quality of scientific publications/papers, the various legal depots of copyrighted works, …

Evaluating innovation in a company based on a single factor like the patent system is dangerous for everyone including the investor. At a time where the society ask for more accountability inside the companies, we really need a better system to evaluate innovation. Of course, there is no miracle. There is no such thing like the perfect innovation index. But at least, we should start to think of a better solution. My first thought was that we don't need such metric as they are all broken. That's true but it looks like that the economical sector loves to use broken metric. If there is no alternative in the "innovation metrics", the economical sector will pick the only one available and it's clearly the broken one . It's maybe time to propose something else ?

Some random ideas to build such index :

Some potential factors (of course, they are all broken but not in the same area) :

Maybe there are already some other indexes… I just think that the idea well worth investigating, at least to avoid the current single factor used : the patents.