Title: Using patent data to measure innovation performance

Authors: Riitta Katila

Addresses: Helsinki University of Technology and The University of Texas at Austin, Department of Management, CBA 4.202, The University of Texas at Austin, Austin, Texas 78712, USA

Abstract: Technologically radical innovations are a key success factor in many high technology industries. This study examines how firms can measure performance on this key dimension. I ask two questions; 1, how can patent data be used to measure innovation and its radicalism, and 2, what are some of the empirical shortcomings with the current methods using patent data? These research questions are examined through a longitudinal data of 100 biopharmaceutical companies. Two main conclusions are drawn. First, patents and the subsequent patents that cite them provide a useful way to measure innovation performance. Patent data can be used to monitor activities of competitors, form a performance evaluation system in R&D organisations, and identify a specific technological trend. Second, in prior research, patent citation lags used to distinguish between innovations of different quality have been too short to distinguish between incremental and radical innovations. Lags of ten years and longer are recommended. Short lags may obscure patent-based comparisons of firm innovativeness.

Keywords: innovation performance; patents; biotechnology industry.

DOI: 10.1504/IJBPM.2000.000072

International Journal of Business Performance Management, 2000 Vol.2 No.1/2/3, pp.180-193

Published online: 13 Jul 2003 *

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