How important are patents for innovation?

Yancy Vaillant, new professor and researcher in the Innovation and Strategy Department of TBS Barcelona answer to the question How important are patents and copyrights for innovation?

Professor Vaillant:

Patents occupied a very important place in the manufacturing-based economy that dominated the 20th century. However, with the current boom of the knowledge-based economy, the strategic role that patents previously played in maintaining the competitive advantages of innovative companies has been heavily diluted.

While the strategic advantages in an economy anchored in production efficiency typically arise from tangible resources, advantages in a knowledge-based economy often arise from capacities derived from the optimisation of intangible resources, along with human talent. In this scenario, patents have limited effectiveness.

Profits from innovation are derived from the monopolistic benefits that an innovative company experiences only until its innovation is copied or becomes obsolete due to further innovation. Patents help to increase the time between innovation and imitation, but they do little to prevent obsolescence. Increased capacity for innovation in knowledge-based economies and the acceleration of the obsolescence cycle makes patents much less useful to an innovative company.

But there will always be exceptions and business sectors in which patents will remain key to the profitability of innovation. In a knowledge-based economy, competitiveness and innovation profitability are the result of the capability of being constantly and continuously innovating, much more so than the ability to protect existing innovations.

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