10 December 2020
A study published today by the European Patent Office (EPO) shows that innovation in fourth industrial revolution (4IR) technologies has accelerated significantly worldwide. Between 2010 and 2018, global patent filings for these technologies, which concern smart connected objects and span the Internet of Things, big data, 5G, and artificial intelligence (AI), grew at an average annual rate of almost 20% - nearly five times faster than the average of all technology fields.
The study, entitled Patents and the Fourth Industrial Revolution - the global technology trends enabling the data-driven economy, looks at all international patent families (IPFs) related to 4IR worldwide between 2000 and 2018. Each of these represents a high-value invention for which patent applications have been filed at two or more patent offices globally. The study finds that nearly 40 000 new IPFs were filed for these technologies in 2018 alone. This means they accounted for more than 10% of all patenting activity worldwide that year.
"Constellations of smart connected devices, faster wireless internet, big data and AI are transforming the global economy and having a profound impact across many sectors, from manufacturing to healthcare to transport," said EPO President António Campinos. "What we are seeing is not just an acceleration of the development of information and communications technology - it is a major shift towards a fully data-driven economy. While Europe is not growing as fast as other regions, our strength lies in the diversity of our innovation ecosystem, the strong performance of some of our smaller countries with their high levels of specialisation, and some innovative regional clusters."
In terms of technology fields, the study finds that innovation has risen most sharply in the areas of connectivity and data management. With nearly 14 000 IPFs in 2018 and annual growth of 26.7% since 2010, connectivity, which covers protocols, short and long range communication, is the largest of all the 4IR technology fields analysed. This impressive rise has been largely driven by the development of 5G, which will support the massive deployment of 4IR technologies. Data management, which encompasses all technologies aiming at exploiting data, from their creation, processing and analysis to feedback execution, has posted average annual growth of 22.5% since 2010, and in 2018 accounted for more than 11 000 IPFs.
A large variety of application domains have likewise been impacted by 4IR innovation over the same period, ranging from consumer goods to services, vehicles, healthcare and industry. The largest application domain, smart consumer goods (e.g. wearables, entertainment, toys, textiles), generated more than 10 000 IPFs in 2018 alone (see Figure: Global growth of IPFs in application domains, 2000-2018).
Looking at the geographical origin of 4IR innovation, the study confirms that the US remains the world leader, accounting for around a third of all inventions between 2000 and 2018, compared with Europe and Japan with about one fifth each. The US has even reinforced its lead in patents filed globally since 2010, growing annually on average by 18.5%, which is faster than both Europe and Japan (average annual growth rates of 15.5% and 15.8% over the same period). Starting from very low levels in the late 2000s, the innovative activity of China and South Korea has increased at a very high rate (posting annual average growth of 39.3% and 25.2% respectively from 2010 until 2018).
Both the rapid emergence of China and South Korea and the steep development of patent applications from other regions has caused Europe to lose ground to other global 4IR innovation centres.
Looking inside Europe, Germany alone produced 29% of all 4IR patents generated by European companies and inventors between 2000 and 2018 - more than twice the contribution of the United Kingdom (14.3%) and France (12.5%). However, the average growth of 4IR innovation in these three countries between 2010 and 2018 has been well below the world average (of 19.7%). By contrast, the fastest growing European countries were Sweden (+22.6%) and Switzerland (+19.6%), which posted increases in IPFs from 2010 to 2018 that equalled or even exceeded the global average. Several smaller countries, notably Sweden (10.1% of all European IPFs since 2000), the Netherlands (7.7%), Finland (6.9%) and Switzerland (3.5%) are significant contributors to 4IR innovation in Europe. Furthermore, Finland and Sweden are European champions with respect to IPFs per million inhabitants (651 and 524 respectively over the period 2000-2018), which is comparable to that of South Korea (525).
The top 10 applicants in the period 2010-2018 accounted for nearly a quarter of all IPFs for 4IR technologies. The list is headed by South Korean companies Samsung and LG, and also includes four US companies, two European companies and one from each of Japan and China. A comparison with the ranking for the period 2000 to 2009 shows that the top European and Japanese applicants have lost ground to their US, South Korean and Chinese counterparts since 2010.
The patent data in the study also shows that innovation is concentrated in certain regional clusters of innovation around the world, typically in large urban agglomerations with an ecosystem of high-performing R&D institutions around leading companies. The top 20 4IR clusters constitute the main sources of 4IR innovation in their countries and are jointly responsible for well over half (56.3%) of all IPFs in the period 2010-2018. The regional ranking is topped by 13 Asian and US clusters, followed by seven clusters located in Europe and the Middle East, all with different leading companies and 4IR specialisation profiles (see Figure: Top global 4IR clusters in Europe and the Middle East).
The two main 4IR clusters (Seoul and Tokyo) each account for nearly 10% of IPFs worldwide, and the third one, San José (Silicon Valley), for another 6.8%. All US, South Korean and Chinese clusters in the top 10 grew strongly between 2010 and 2018, with the region of Beijing achieving the highest increase (at 30% per year). By contrast, top clusters in Europe and Japan have experienced lower average annual growth. In comparison with the very large global clusters observed elsewhere, innovation activities in Europe also appear to be distributed between smaller regional clusters.