Innovation Quality

If patents represent the best innovation, and if the majority of issued patents are invalid for not being innovative (i.e., not novel, obvious, not reproducible), then it could be that the majority of the world's "innovation" is a waste of time and money, a waste of tens of billions of dollars a year. And if it is harder to truly innovate, it could be that we have reached "Peak Innovation", making innovation less of a salvation for addressing the world's problems. See also our Timeline of Innovation Firsts.

Diminishing rates of innovation can lead to diminishing corporate profits, which play a significant role in a company's stock price. We are incorporating patent and innovation statistics into calculations of stock market recommendations for companies with significant patent portfolios.

Statistics on Global Innovation Quality

For the most part, there are few to any numerical measurements of the quality of technical innovation around the world, quality being defined here mostly as satisfying the tests for patentability: that the innovation is new, that it is not obvious, and that the innovation is well described. For the time being then, we use the quality of patents at the corporate, academic and national levels as a measure of the corresponding quality of innovation. More thinking about this can be seen in the following papers.

• WEF Global Competitiveness Report 2011-2012 (10 Mb PDF)
       page 514 has a data for each country's "Capacity for Innovation", rated 1 (licensing/copying) to 7 (own research), mean is 3.2, while page 492 has data on "FDI and Technology Transfer", rated 1 (no FDI) to 7 (much FDI bringing in new technology)
• NAS: Improving measures of science, technology and innovation: interim report
       Litan et al., National Academy of Sciences, 2012 - no data, just lots of plans on how to measure things
• OECD: Oslo Manual - Guidelines for Collecting and Interpreting Innovation Data
       OECD Statistical Office, Luxembourg, 2005
• OECD: Measuring Innovation: a new perspective
       128 page report - OECD, May 2010
• OECD: Science, Technology and Innnovation Scoreboard 2011
       204 page report, Sept. 2011.
• UNESCO: Measuring innovation in developing countries
       UNESCO Institute of Statistics, 2011
• WIPO: Global Innovation Index 2012
       WIPO/INSEAD, 2012

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• Predicting the path of technological innovation: "step and wait"
       Ashish Sood, Emory University, March 2013 - doesn't focus on quality of innovation, but rather presents a good predictive model for innovation changes in a technology
• Highest proportions of innovative enterprises in Germany, Luxembourg, Belgium
       EC Eurostat, 11 Jan 2013
• Advancing measures of innovation: knowledge flows, business metrics
       National Science Foundation, Workshop Report, Jan 2007
• Measuring technological change through patents and innovation surveys
       D. Archibugi, Technovation, 16(9) (1996)
• In search of a useful measure of technological innovation
       D. Archibugi, Technological Forecasting, 34 (1988)
• Toward a measurement agenda for innovation
       boring call for action, no specifics - OECD, 2010
• Defining and measuring non-technical innovation
       doesn't define "non-technical" - OECD, 2008
• Industrial Reserch and Innovation Indicators: a survey
       Merrill & Cooper, National Academy of Sciences, 1997
• Qualitative Studies on Sector Innovation
       National Academy of Sciences - over the years, the NAS has published a large number of qualitative reports on innovation by sector, by government, etc.

Studies on Peak Innovation

All fields of engineering, technology and innovation eventually mature, with new fields to be born from new science. But as science itself matures, will there be fewer innovation opportunities? Have we, are we, will we soon be reaching "peak" innovation ("peak" inspired by King Hubbert's Peak Oil theory)? Beyond the studies below, our Timetable of Innovation Firsts provides a way to measure the economic impact of new innovations compared to the aggregrate value of existing innovations, which has or will peak. And sadly and ominously, how much of this remaining innovation is solely job-destroying?

• Report suggests nearly half of U.S. jobs are vulnerable to computerization
       Aviva Rutkin, Technology Review, 12 Sept 2013
• Miley Cyrus' derivativeness reveals an artistically bankrupt music culture
       Camille Paglia, Time, 27 Aug 2013
• Internet's greatest disruptive innovation: inequality - logical consequences of Silicon Valley capitalism - social stratification and class antagonism
       Andrew Leonard, Salon, 19 Jul 2013
• The Internet's destroying jobs - and turning the old middle class into the new proletariat
       Andrew Leonard, Salon, 12 Jul 2013
• Have we reached "Peak Smartphone" due to increasing market saturation?
       Aaron Pressman, Yahoo Finance, 02 Jul 2013
• Peak innovation at Google, Apple and Facebook, which have been the recent main innovators
       Wade Roush, Xconomy, 14 Jun 2013
• From the mainframe to cloud-computing server farms - we have innovated nowhere new
       Rudolf Winestock, throwww blog, 19 Apr 2013
• Viewpoint: the 'invention illusion' means new rarely is new
       Paul Martin (CTO Pextek), BBC, 1 Feb 2013
• After Einstein: scientific genius is extinct [no more fundamental innovation]
       Dean Simonton, Nature, 31 Jan 2013
• Boeing's 787 Dreamliner and the decline of innovation
       Business Week, 24 Jan 2013
• Innovation pessimism: has the ideas machine broken down?
       Economist, 12 Jan 2013
• Of flying cars and the declining rate of profit
       David Graeber, The Baffler, December 2012
• Why innovation won't save the U.S. economy
       Robert Gordon, Wall Street Journal, Dec. 2012. "I am not forecasting an end to innovation, just a decline in the usefulness of future inventions in comparison with the great inventions of the past. ... Can economic growth be saved by Google's driverless car? This is bizarre ground for optimism, ..."
• Is U.S. economic growth over? Faltering innovation confronts the six headwinds
       Robert Gordon, Center for Economic Policy Research, Sept. 2012. The most economically beneficial innovation peaked in the 1870 to 1900 time period. "Even if innovation were to continue into the future at the rate of the two decades before 2007, the U.S. faces six headwinds that are in the process of dragging long-term growth to half or less of the 1.9 percent annual rate experienced between 1860 and 2007."
• Did Robert Gordon misread data about economic growth?
       BreakThrough.org, Sept. 2012
• The "green" Kondratieff - a new innovation cycle of prosperity
       Allianz Global Investors, June 2012. They argue that the fifth technology wave of the Kondratieff cycles peaked around 2000 (Gordon's peak technology being Kondratieff's third wave from 1880 to 1930). But they also argue that green technology will be the sixth wave of innovation, without discussing that green technology innovation has peaked as well
• Innovation Generation: How to Produce Useful and Creative Ideas
       Roberta Ness, VP of Innovation at UTexas Health Science, argues that while scientific innovation has drastically slowed, she offers ways to spark new innovation
• The Great [technological] Stagnation
       Tyler Cowen, George Mason University, Jan. 2011. He argues that the American economy has reached a historical technological plateau and the factors which drove economic growth for most of America's history are mostly spent.
• Global Per Capita innovation peaked around 1900
       Bruce Gary, August 1993 - interesting comparison of global demographics and innovation rates, reaches similar conclusion to Robert Gordon, but using demographics instead of economics.

Related Articles on Peak Innovation

• Peak population and what it means for global resources
       Gainesville Coins, ZeroHedge, 29 November 2014
• Why peak-oil predictions have't come true - and probably won't
       Russell Gold, Wall Street Journal, 29 September 2014
• An innovation slowdown at the tech giants - seen anything new and big lately from Cisco, Yahoo or even Twitter?
       Michael Malone, Wall Street Journal, 02 July 2014
• Opinion: science is running out of things to discover
       John Horgan, National Geographic, 09 April 2014
• Missing at the Mobile World Congress - Innovation
       Sam Schechner, Wall Street Journal, 27 February 2014
• Failure: 14 oil companies pool R&D efforts to develop environmental technology for Canada's oil sands, but have produced little
       Chester Dawson, Wall Street Journal, 13 November 2013
• Visions of a Permanent Underclass - a review of "Average is Over" by Tyler Cowen - a future of a small rich class and an entire world of working poor due to innovation
       William Glaston, Wall Street Journal, 01 October 2013
• U.S. textile plants return to operation, with floors largely empty of people
       Stephanie Clifford, New York Times, 19 September 2013
• America faces the shock of slowing progress - future economic growth depends on innovation
       Justin LaHart, Wall Street Journal, 9 September 2013
• How technology is destroying jobs
       David Rotman, Technology Review, 12 June 2013
• Too many smart people chasing too many stupid non-innovations
       C.Z. Nnaemeka, MIT Entrepreneurship Review, 19 May 2013
• How Silicon Valley is hollowing out the economy (and stealing from you to boot)
       Christopher Matthews, Time, 7 May 2013
• Less than 100 active venture capital firms in U.S.
       Dan Primack, Fortune, 22 Apr 2013
• Is mobile innovation increasingly just privacy destruction?
       LJ Rich, BBC, 19 Apr 2013
• Apple desperately needs a new revolutionary product
       Cody Willard, MarketWatch, 19 Apr 2013
• America needs a new war or capitalism dies - low defense spending is killing jobs [innovation isn't creating]
       Paul Farrell, MarketWatch, 17 Apr 2013
• No progress in 20 years (and $1 trillion in R&D), in reducing CO2 emissions per ton of energy consumed
       "Tracking Clean Energy Progress",Int. Energy Agency, 17 Apr 2013
• Oil could face "peak demand" before it faces "peak oil [demand]"
       Dan Strumpf, Barron's, 13 Apr 2013
• Why PC sales are plunging: 'good enough' computing [where PC hardware innovations have no value]
       Simon Bisson, ZDNet, 11 Apr 2013
• The slow death of the American author [due to technology]
       Scott Thurow, New York Times, 07 Apr 2013
• Smartphone innovation is dead
       Alex Kidman, Gizmodo - Australia, 04 Apr 2013
• Computer pioneer Alan Kay says Silicon Valley is running out of innovation
       Tom Foremski, Memeburn, 02 Apr 2013
• Recent college graduates may be stuck in low-skill jobs
       Ben Casselman, Wall Street Journal, 25 Mar 2013
• What has killed technology innovation in virtualization?
       Ken Hess, ZDNET, 12 Mar 2013
• Global growth is burning out and fading fast: less innovation, more debt
       Satyajit Das, Marketwatch, 11 Mar 2013
• After Peak Oil, will we (too) soon have Peak Shale Gas/Oil?
       J. David Hughes, Post Carbon Institute, March 2013
• Do fixed patent terms distort innovation? Eveidence from cancer clinical trials
       Eric Budish et al., MIT, March 2013
• New wave of corporate buyouts about using billions for consolidation, with less innovation to invest in
       Randall Forsyth, Barron's, 16 Feb 2013
• Take a higher price to sell your Dell - it's lost its innovation
       Adam Hartung, Forbes, 13 Feb 2013
• Study suggests US government is paying twice for some research projects
       Douglas Quenqua, New York Times, 5 Feb 2013
• Has Apple's [innovation] peaked?
       Economist, 26 Jan 2013
• America has hit "Peak Jobs"
       John Evans, TechCrunch, 26 Jan 2013
• Microsoft still can't find its future - is it too late for the company?
       Adam Hartung, Forbes, 20 Jan 2013
• General Electric: half of profits from its bank, not its tech innovation
       Wall Street Journal, 17 Jan 2013
• iPhone and innovation: hardware the only place Apple can go to keep up the buzz?
       Steve Ranger, ZDNet, 7 Jan 2013
• Krugman: is the only quality innovation left that which eliminates jobs?
       New York Times, 28 Dec 2012
• Microsoft's [innovation] has failed
       Charlie Demerjian, SemiAccurate, 14 Nov 2012. "Ask yourself when the last time Microsoft did something innovative? Did it come from internal impetuses, or a clone of the competition?"
• Is Apple out of ideas?
       Andrew Blum, The Daily Beast, 29 Oct 2012. "But at the moment, even the most sensitive Apple Kremlinologists are coming up quiet about any new breakthrough machine on the horizon."
• The NFL has officially run out of good ideas
       Wall Street Journal, 31 Aug 2012
• Don't let innovation languish
       Philip Ross, IEEE Spectrum, Jan 2012. "If our prosperity depends on rapid technical progress and such progress does not come, then all our economic calculations must be revised downward."
• The decline of everything, and why innovation won't save us
       Stan Abrams, China Divide, 28 June 2010. "In China [according to the head of the Chinese patent office], innovation and growth will raise wages, somehow reduce the income gap, and provide sufficient funds for health care, education, pensions and environmental cleanup. ... This is all bullshit, of course."