Market Report: New Study Finds Green Patents and Green Innovation Cannot Live on R&D Alone

October 28th, 2013 by Eric Lane Leave a reply »

A new report published recently in the journal PLOS ONE shows a steep rise in rates of renewable energy patenting over the last decade.  Of course, that in itself is not novel or interesting.

What is new and interesting is the study’s key findings about the determinants of such patenting activity.

Conducted by Luis Bettencourt of the Santa Fe Institute, Jessika Trancik of MIT and Jasleen Kaur of Indiana University, the study is entitled “Determinants of the Pace of Global Innovation in Energy Technologies” (see MIT’s piece about the study here).

The authors used patenting activity as a proxy for innovation and analyzed trends in R&D funding in an attempt to figure out the drivers of energy innovation.

The authors first built a global database of about 73,000 energy patents covering the period of 1970-2009, a database they call “unique in its temporal and geographical scope.”

While the patent data showed rapid growth over the last decade particularly in renewable energy patents such as wind and solar, with annual growth rates of 19% and 13%, respectively, there were not commensurate rises in public or private R&D during this period. 

Thus, the authors posit, direct R&D funding cannot be the main driver of patent growth:

These trends contradict a picture of patenting in energy technologies that is primarily driven by inputs in public R&D investment.  They point to the relevance of opportunities resulting from the growth of markets, which drives an increase in both explicit private R&D funding and other forms of investment that generate innovative activity.

So the authors developed a model to explain the non-linear response.  Their model shows that as markets for particular technologies materialize, investments in continued innovation are increasingly driven by market growth, sometimes creating a cycle of rapid innovation:

[T]he model demonstrates that a virtuous innovation cycle formed by R&D support and market growth can account for the sharp increase in energy patenting observed in recent years.

More particularly, it is the interplay and synergy between the market and traditional public support that is critical:

We find that both market-driven investment and publicly-funded R&D act as base multipliers for each other in driving technological development at the global level.

The report provides some consolation for those of us who would like to see a coherent climate change policy to promote green technology innovation.  The authors conclude that green innovation has been progressing and may continue to do so even in the absence of coordinated international climate change policies:

The suggestion of the dependence of global patenting trends on the aggregate scale of research funding and markets, rather than the details of policy instruments and other incentives, is important because of the diversity of public policies at finer geographical scales and limited ability to coordinate these policies across national borders.  Similarly, the apparent persistence of knowledge over long time periods is an important result given the variability (and lack of continuity) in policies over time.



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