The measurement of innovation is a widely discussed topic in the literature
and there is no agreement as to which indicator is the most appropriate
(Grilches, 1990; Acs et al., 1992). Innovation indicators are usually divided
into “input indicators” (R&D expenditure or jobs) and “output indicators”
(patents, new product announcements). The main inconvenience of the
former is that they fail to take into account activities related to contextual
knowledge, which are more important in smaller firms, underestimating their
innovative capacity. On the other hand, patents and new product
announcements represent the outcome of the innovation process. As long as
granted patents imply novelty and utility, and also an economic expenditure
for the applicant, it is supposed that patented innovation is of economic value
(Griliches, 1990). Furthermore, patent documents contain such highly useful
data as the applicant’s address, name, date and technological classification.
For these reasons patent indicators are the most widely employed indicators
of innovation (Khan and Dernis, 2006). The use of patents as innovation
indicators offers the additional advantage of being able to compare and
discuss the results regarding the most extended empirical line.
In order to avoid yearly fluctuations and take into account the lags in
the outcome of innovation processes, it is common practice to consider data
about innovation over periods of 4-5 years (Griliches, 1992). As in Boix and
Galletto (2008a), data for the 2001-2006 period (both inclusive) was used5.
Patent data is not restricted to a single register as is the usual practice but
instead covers several sources to produce more precise counts: Spanish
Patent and Trademark Office (OEPM), European Patent Office (EPO),
United States Patent and Trademark Office (USPTO) and World Intellectual
Property Organization (WIPO), and covers applications with at least one
applicant with an address in Spain per year of application6. The treatment of
the data avoided double-counting (patents first applied for at the Spanish
office and then extended by means of the European or World treaty, or vice-
versa). The final database covers 22,500 documents for the whole 2001-2006
period.
5 The complete patent database includes 70,000 documents from 1991 to 2006. Patent
counts include “utility models”, a figure granted by the OEPM which is similar to the
patent although legal requirements are less strict and protection covers only ten years.
Similar figures exist in Austria, Denmark, Finland, Germany, Greece, Italy, Japan,
Poland and Portugal. Employment data comes from the 2001 Census of the Spanish
Institute of Statistics (INE).
6 Data treatment follows international standards: patents are located according to the
first applicant with an address in Spain (inventor’s address is not available for national
patents); reference date is the oldest application data in any register because it is the
closest to the invention date and does not introduce biases due to legal or procedural
delays.