beyondbrics

A new report claims that China is on the verge of becoming the world leader in global innovation in 2011, surpassing the US and Japan in the number of patents filed by Chinese companies.

A country with over 1.3bn people, thousands of competing companies and a government flush with reserves is seemingly throwing its weight behind an effort to change its image overnight from global copycat to innovator.

The report from Thomson Reuters, entitled Patented in China, predicts China will surpass Japan and the US in the number of patents filed globally by 2011 and that China is set to become the top patent publishing authority in the world by next year.

Does this mean we are going to see an influx of Chinese inventions anytime soon? Probably not. Here’s why.

First, these figures have to be put in context. China may be issuing more patents, but the concept of intellectual property is still quite new and companies have only recently started to file for patents. Starting from zero, it is much easier to ratchet up the rate of patents. For example, as the report points out, the number of domestic patent applications for digital computers (high-tech patents are by far the largest in quantity) have jumped from zero before 1998 to 4,861 by 2008. But the question of how many of these patents are actually high quality remains.

Second, given the growing number of Chinese corporations, the expectation is that more patents will be filed to reflect this. As the Chinese economy becomes more advanced, it will move from manufacturing to high-tech innovations where R&D is key to growth for many companies.

To provide further context, it might be useful to go back to 2006 when when the Chinese government launched its 11th Five Year Plan with a big push to become “innovation-oriented”. With tax incentives in hand, Chinese companies began filing patents overseas. Filing offices in the US, Europe and Japan saw increases of 14.1 per cent, 33.5 per cent and 15.9 per cent (see chart from Thomson Reuters report – Patented in China – below)

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So while the numbers of patents and the record rate of growth for Chinese patents may seem outstanding, this is really another case of the world’s second-largest economy playing catch up, and ticking off another box on its checklist of things to do to become the global superpower. If nothing else, it certainly starts debate in a country where just a decade ago IP was not a subject anyone took seriously.