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The Swiss explain the country’s success at manufacturing things out of atoms and molecules as a legacy of precision watch making. (ARND WIEGMANN/Arnd Wiegmann/Reuters)
The Swiss explain the country’s success at manufacturing things out of atoms and molecules as a legacy of precision watch making. (ARND WIEGMANN/Arnd Wiegmann/Reuters)

Neil Reynolds

A lesson for Canada from Swiss R&D Add to ...

The U.S. Patent and Trademark Office employs 10,000 people (mostly scientists and engineers) to grant monopoly rights to the inventor of the next new thing - and to disclose to the world all the secrets it contains. In doing so, it makes a profit, a rare example (now that the U.S. Postal Service and Canada Post are losing money) of a competent user-financed government agency. For the U.S. patent office, business is good. Notwithstanding the turmoil of the times, it increased its payroll by 50 per cent in the past five years.

The world is getting more globalized, more integrated - and more intelligent - at progressively faster speeds. At some point during 2011, scientists have calculated, the world will have produced more than one billion transistors for every person on the planet. Judged by patents, Canada is getting smarter, too - though not as fast as the United States, Japan and many of the advanced countries in Europe.

The U.S. patent office issued a record number of patents last year to Canadians: 5,223. This was an increase, year over year, of 20 per cent - an implicitly impressive performance until compared with Japan (up 26 per cent), Germany (up 25 per cent), South Korea (up 26 per cent) or the U.S. itself (up 24 per cent). Canada did relatively well, but at the same time fell further behind many competitor countries.

Compared with the world, Canada's performance looks humbler still. According to IFI, a Delaware-based producer of patent-related databases, the U.S. Patent and Trademark Office issued 219,614 "utility patents" (commonplace industrial patents) in 2010 - a one-year increase of 31 per cent, the biggest one-year gain ever. It issued more than half of these patents (50.3 per cent) to U.S. inventors, either as corporations or as individual - maintaining the American global dominance in scientific and technical innovation.

For the first time, the U.S. patent office issued more than 5,000 patents to a single company in a single year. With 5,896 patents, IBM kept its ranking as global leader for the 18th consecutive year. IBM's closest top 10 patent competitors: Samsung (4,551), Microsoft (3,094), Canon (2,552), Panasonic (2,482), Toshiba (2,246), Sony (2,150), Intel (1,653), LG Electronics (1,490) and Hewlett-Packard (1,480).

Some people think that it's unfair to compare patent production of smaller countries with patent production of larger countries - and especially against the patent production of the United States and Japan, which together hold two-thirds of all the patents in the world. Yet absolute numbers do matter. As it happens, however, Canada doesn't fare at all well when compared with the other countries on the basis of population.

Based on patents issued in 2007 by U.S., European and Japanese patent offices (the three places where important patent applications are simultaneously filed), one small country emerged as a spectacular patent producer. It wasn't Canada. With a 7.8 million population, Switzerland led the world with 120 patents per million people. Japan finished close behind with 118. Other top-inventor countries: Sweden (80), Germany (68), Netherlands, Finland and Denmark (all 60) - and the United States (40) and Canada (20). Thus the United States beats Canada 10-to-1 in absolute numbers and 2-to-1 in relative (population) numbers.

With less than one-quarter of Canada's population, Switzerland produces more internationally important patents than Canada by a wide margin - one reason why the World Economic Forum declared the country last year as "the most competitive country in the world." On the other hand, it doesn't hurt Switzerland to possess IBM as a strategic partner in advanced nanotechnology research. IBM has operated research labs in Zurich for more than 50 years; this year, in association with ETH (the Swiss federal institute of technology), the company will open a state-of-the-art nanotech lab (cost: $90-million U.S.) - a certain generator of patent applications to come.

Switzerland is an astute little country with a well-deserved reputation for invention and for innovation. Innovation Scoreboard 2010, a European report on global competitiveness published earlier this month, praised Switzerland "for the exceptional performance of its intellectual assets." The Swiss explain the country's success at manufacturing things out of atoms and molecules, modestly enough, as a legacy of precision watch making.

The OECD reports, by the way, that the Swiss have the highest ratio of R&D investment (compared with GDP) in world: 3.74, compared with Canada's 1.84. The Swiss unemployment rate is 3.6 per cent. The country's budget is balanced. To the victor go the spoils.

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