THE ROLE OF INNOVATION

by Dr Farag Moussa ©
President of the International Federation of Inventors' Assocations (IFIA)
(e-mail: invention-ifia@bluewin.ch)

The whole history of Humanity shows that if we put aside military occupation of foreign territories and/or exploitation of foreign economies, the wealth of a country depends on its natural resources (i.e. Kuwait and oil), on its labor force, and its capital. Additionaly, extra wealth may be created by local inventive and innovative efforts . Switzerland has no natural resources, and a population of less than 7 million, and yet Switzerland is one of the leading industrialized countries in the world. Why? Because of its grey matter. Because its inventors are prolific.

"Invention and innovation are the lifeblood of new economic activity" : I fully share this idea expressed in the introduction to this panel. That is why it is essential to promote local invention and innovation. I have said and written again and again that invention knows no frontiers . Even though it might appear to some that the gift of inventing is the sole privilege of some rich countries, it is not !

This being said, I have chosen to tackle here three aspects concerning the role of innovation trapped in a transitional period where the traditional economy has to coexist, sometimes with difficulty, with the so-called "connected" economy of today.

I.  Big industry and independent inventors in the innovation process

A question was put forward in the introductory remarks to this panel: do large and/or global organizations have advantages in the capacity to innovate? They certainly do ! This can be observed when looking at the number of inventions multinationals and large industries patent worldwide. Statistics published by the World Intellectual Property Organization (WIPO) concerning inventions filed through its PCT system show that in the year 2000, 155 multinationals and large industries accounted for 28.7% (22,931) of the 79,947 international applications published, each of the 155 enterprises with 50 or more applications published.

Of these 155 companies, 43.9% were from the United States of America, 17.4% from Japan, and 12.9% from Germany. As was the case the year before, we find on top of the list:
Siemens (Germany) with 1,259 inventions filled in the year 2000, followed by:
Philips (Netherlands) with 1,009 inventions,
Ericsson (Sweden) with 883 inventions,
Procter & Gamble (USA) with 822 inventions,
Bosch (Germany) with 678 inventions,
Matsushita (Japan) with 550 inventions
BASF (Germany) with 464 inventions, and
Nokia (Finland) with 411 inventions.

However, this impressive picture based on patent statistics, needs to be corrected. It is well known that multinationals and big industry often use the international patent system simply to "block" the innovations developed by their competitors, keeping their own patented inventions in their drawers. These are not produced. No additional wealth is brought to humanity.

Further don't forget that independent inventors constitute a very large sector of local inventive activity in any country. This appears clearly when looking at national patent statistics. In many developing countrie local industry might be relatively important, and yet it has no inventive activity at all, producing again and again the same products or processes. This system does not add any new wealth to the economy of the country. In fact the only creators of invention and innovation in these developing countries are independent inventors.

Even in one of the most advanced developing countries like Brazil, a recent official enquiry shows that 66% of the applications for inventions and industrial designs by residents in Brazil are the work of independent inventors. (Enquiry conducted by the national Patent Office (INPI) on the basis of statistics of the past 10 years.)

A similar situation is found in the industrialised countries after all. Take for example the questionnaire I sent to several European Patent Offices in 1998. The answers revealed that the percentage of patent applications filed by local independent inventors were quite important:
52% in Norway
43% in Ireland
42% in Belgium
41% in Austria
35% in Finland
34% in Sweden
30% in France
26% in the United Kingdom
24% in Italy

As to the USA, the official statistics of its Patent Office concerning US residents shows that the percentage of patent applications filed by independent inventors is also high. It varies from 36.4 % in 1987 to 26.8% in 1999.

All these figures confirm what I always keep saying, that is that independent inventors constitute a large sector of the inventors community in most countries. Also we must not forget how many discoveries and important inventions are the brainchildren of independent inventors. We must not forget that a great number of today's big industrial enterprises, and the thousands and thousands of jobs involved, originate from independent inventors, who, more often than not, gave their names to those enterprises.

Normally independent inventors should therefore represent a vital element in the creation of wealth. Unfortunatly this is not the case. The sad reality is that very few inventions of independent inventors eventually reach the market (1 to 5 in a hundred, if not less). And once on the market, very few succeed. I sometimes feel desperate when I think of all the efforts made by independent inventors which are lost for humanity.

II.  The patent system should offer equal opportunities to all creators, irrespective of their financial and economic strength.

Because innovative people are potential creators of wealth, it is urgent that we adjust the unfair gap created by the market economy between the big industry and the independent inventors. There are very many ways to do so, but as for today I will speak about two of them my organization (IFIA) is struggling for.

First. The fees for international patent filing are exhorbitant. Independent inventors are locked-out of the patent system around the world by the sheer magnitude of costs. That is why we at IFIA fight for a reduction to be offered to them. Some 25 countries have already adopted a system by which they offer a 50% reduction (or more) on most, or at least on several of the patent fees, to independent inventors irregardless of their country of residence or their nationality. These countries belong to nearly all the regions of the world: USA and Canada (Northe America), Argentina, Brasil and Mexico (Latin America), India, Rep. of Korea, Philippines, Saudi Arabia, United Arab Emirates and Kyrgystan (Asia), and some 8 countries from Eastern and Central Europe. Norway is the only country from Western Europe which has adopted such a system. To note that Norway is not a member of the European Union...

Our efforts at IFIA tend to the adoption of this system by all countries, as well as by WIPO in respect of its international patent filing system (PCT). This would be a first relief for independent inventors who wish to protect their inventions worldwide.

A second, but long-term objective of IFIA is to reform drastically the present international patent system. A one-hundred-and-twenty year old system. A very conservative system, which some go as to say that it corresponds to utmost folly. Why? Because today any person or company who wants to protect his invention in more than one country, needs to obtain (and maintain) a patent in each of the countries where protection is seeked. Such a system is not only very costly, it is complex and not predictable. For instance, the same invention can obtain a patent in one country, see it refused in another country or invalidated. There is also very much duplication of work. Each invention is subject to separate procedures of filing, search and examination, and a separate decision of grant or refusal.

In my view this system is also ridiculous. Imagine that you would have to obtain a driving licence, and therefore pass an exam, in each country where you want to drive your car or rent one. The ideal solution is to have one world patent , following one single examination accepted by all (or most) countries. This is the long term objective of my organization, IFIA. For those interested, please note that IFIA has recently launched on its website a discussion forum on this idea. See: <http://www.invention-ifia.ch/WorldPatent.htm>

III.   Internet as a means to maximise and accelerate transfer of new technology

I shall conclude this brief presentation by few words concerning the exploitation of new technology in the so-called "connected" economy. I shall refer to two aspects related to the innovation process.

For many inventors, the marketing stage often starts with a prototype to prove that the product works satisfactorily, and what's more, works safely. The greater a model's perfection, the greater the chances of selling a license to a manufacturer. But a professional prototype, as close to the final product as possible, can rapidly become extremely expensive. One fantastic and inexpensive alternative to a physical prototype is a computerized model. Basically, it amounts to modelling the invention from all angles on a computer, with self-running commentary, demonstrations and animation of all the invention's functions. The diskette or ZIP disk can be duplicated in as many copies as necessary, and sent via regular mail.

The second aspect concerning the role of Internet in the innovation process which I would like to share with you is the following.

Online marketplaces for technology were created very few years ago. The idea is to link through Internet the creativity of inventors with entrepreneurs, investors and marketers who have the financial and human resources to further develop innovation for market introduction. This new kind of business model has become a dynamic and rapid growing industry where one can already see mergers, acquisitions, but also crashes and exits.

Some virtual markets of technology work for profit, others not. Some are very small with a handful of offers, others large or very large; some specialize in certain fields of technology, others are open to all. The quantity and quality of the information posted on the computer screen, as well as the conditions to access them, varies from one website to another.

In a lecture I will give tomorrow (Track 1: Cultivating Innovation), I will highlight the online market place for technology of our worldwide and not-for-profit organization IFIA. Launched just two years ago, the IFIA Internet Inventions Store (IFIS) is unique, in the sense that it offers inventions from so many countries - 77 at present.

See again some of you tomorrow! Otherwise visit IFIS webpage at :
IFIS website: www.invention-ifia.ch/store.htm

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