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Disemination of Innovation and Patent Life

By Hanno Kaiser

This chart from The Economist shows that for some important market changing products the time from innovation to market penetration has become progressively shorter.

The article explains:

The upshot is that technology is spreading to emerging markets faster than it has ever done anywhere. The World Bank looked at how much time elapsed between the invention of something and its widespread adoption (defined as when 80% of countries that use a technology first report it; see chart 1). For 19th-century technologies the gap was long: 120 years for trains and open-hearth steel furnaces, 100 years for the telephone. For aviation and radio, invented in the early 20th century, the lag was 60 years. But for the PC and CAT scans the gap was around 20 years and for mobile phones just 16. In most countries, most technologies are available in some degree.

One might question whether any use of a technology in a particular country should be sufficient to put it on the map as a country in which the technology is practiced. For example, there are undoubtedly PCs and CAT scans available in Kumpala, even though the technology penetration rate of Uganda is among the lowest in the world. Uneven distribution notwithstanding, Uganda, I assume, would be a country reporting the use of PCs and CAT scans. That said, the chart is certainly plausible for those parts of the world where infrastructure permits the rapid dissemination of technology. The results should be even more striking for electronically distributed products among world-wide internet users (e.g., adoption of PDF as a document standard, mp3 as a music standard, Firefox, etc.)

One implication of more or less instant dissemination is that the arguments for longer copyright and patent periods are further weakened. The shorter the lead time from publication to full scale distribution, the more immediate the financial reward for the creator (or, more accurately, the rights holder), and the greater the total reward over the life of the exclusive right. In other words, even if the exclusivity period remained constant, more immediate and broader distribution result in increased revenues and incentives.

Technorati Tags: economics, innovation, patents

Full post as published by Antitrust Review on March 13, 2008 (boomark / email).