Eurostat mapping of the contribution of SMEs in EU patenting: How to identify SME applicants? Jan-Bart Vervenne Bart Van Looy Julie Callaert KU Leuven - INCENTIM PATSTAT User Day Tokyo – November 19th 2014

BACKGROUND

• SMEs contributing to (innovation-driven) growth in Europe?

– 99,8% of non-financial companies in Europe classify as SMEs – Within the non-financial business economy SMEs represent

• 57,4% of turnover • 58,7% of value added • 66,7% of employment

(Eurostat, 2009)

• Policy awareness: ‘Lacking’ fast growing entrepreneurial ventures?

BACKGROUND

• Importance of IP for (R&D intensive) SMEs – Appropriating returns from R&D – Signaling function of patents (investors, customers,

competitors, employees)

• SME barriers to patenting

– Lack of understanding of IP and application procedures – Fear of information disclosure (<> secrecy) – Costs (application, maintenance, litigation)

OBJECTIVE • Mapping and monitoring the contribution of SMEs in terms of

technology development (measured by patent activity): – currently absent on a large scale and on a recurrent basis, – data availability challenges: patent databases contain no business

information on applicants and no company identifiers (like VAT number,…)

How to identify SMEs among patent applicants?

– Relating patent & financial databases becomes necessary – Technical feasibility and sufficiency in terms of coverage?

• Feasibility study EUROSTAT (2012-2013)

– Data: PATSTAT October 2011 vs. Amadeus 2012 – EU-27, application years 2000-2011

SME criteria (EC, 2005)

OWNERSHIP INFORMATION

APPROACH

1. Harmonizing and matching company names in PATSTAT and AMADEUS

2. Disambiguating multiple matches 3. Assigning ‘SME’ or ‘Large Firm’ label to matched

companies with sufficient financial and ownership information

4. Extrapolation (by sampling) of size distribution for unmatched companies and for matched companies with insufficient financial/ownership information

Matching

Sector allocation

•Identification of corporate applicants among applicants in PATSTAT

Name harmonising

•Name harmonisation of corporate applicant names in PATSTAT •Name harmonisation of company names, former company names and alias names in financial directory (Amadeus)

Name matching

•Matching of harmonized corporate applicant names with harmonised company names from same country •Matching non-matched corporate applicants with companies from other EU-27 countries

Disambiguation multiple

matches

•Disambiguation based on corporate applicant and company address information •Second disambiguation layer based on date of incorporation vs. date of first patent filed, date of inactivity vs. last patent filed, ownership information, maximum revenue / staff count / total assets

List of

'potential SMEs'

•Full EC 2005 SME definition is applied to companies for which all relevant information is available •Looser EC 2005 SME definition is applied to companies with fragmented financial information

Assessing dependency

status

•Potential SMEs with an independent status ==> effective SMEs •Potential SMEs with a dependent status l SMEs ==> majority shareholder is a company: indicators are verified to determine membership of small or large formal business group / majority shareholder is a public body: not an SME / majority shareholder is an individual: verified whether part of 'informal' business group?

Extra-polating size for

rest

•Identification of categories for which status could not be determined: non-matched corporate applicants and matched corporate applicants with insufficient information in Amadeus

•Stratification based on country and patent volume •Determination of a country's SME share in corporate patenting based on additional searches performed on stratified samples.

Results - Name matching

COUNTRY APPLICANTS PATENTS # Matched # Matched % # Matched # Matched %

EU-27 104 166 64 496 61.9 1 316 568 1 094 349 83.1 BE 2 218 1 542 69.5 26 129 23 220 88.9 BG 107 45 42.1 190 73 38.4 CZ 500 336 67.2 1 450 967 66.7 DK 3 593 2 101 58.5 29 487 24 468 83.0 DE 30 130 16 320 54.2 537 847 453 746 84.4 EE 112 65 58.0 226 136 60.2 IE 1 235 912 73.8 8 767 6 575 75.0 EL 209 59 28.2 676 196 29.0 ES 4 234 2 395 56.6 17 019 11 494 67.5 FR 10 763 5 587 51.9 179 457 144 112 80.3 IT 13 104 8 974 68.5 77 186 60 358 78.2 CY 245 62 25.3 932 323 34.7 LV 74 18 24.3 288 37 12.8 LT 16 8 50.0 27 13 48.1 LU 649 259 39.9 5 399 3 107 57.5 HU 513 181 35.3 1 689 636 37.7 MT 82 53 64.6 426 363 85.2 NL 6 891 4 720 68.5 132 865 121 315 91.3 AT 3 042 1 632 53.6 25 293 18 588 73.5 PL 401 238 59.4 1 179 796 67.5 PT 382 192 50.3 1 065 738 69.3 RO 57 17 29.8 95 34 35.8 SI 265 135 50.9 1 438 678 47.1 SK 124 76 61.3 305 225 73.8 FI 2 683 1 724 64.3 51 052 44 874 87.9 SE 6 226 3 452 55.4 84 844 53 081 62.6 UK 16 311 13 393 82.1 131 237 124 196 94.6

Financial and ownership information in Amadeus

0

10

20

30

40

50

60

70

80

90

100

RO LU DE EE

GR PT IT BG AT

GB PL

DK

EU

-27

CZ

MT NL

ES

FR FI SI

LT SE

SK IE BE LV CY

HU

% o

f com

pani

es fo

r whi

ch in

form

atio

n is

ava

ilabl

e

Financial indicator availability Financial and ownership indicator availability

SME vs Large Firm applications – before extrapolation

Country Large companies (%) SME (%) Matched but missing information (%) Not matched (%)

EU-27 61.7 5.4 16.0 16.9 BE 71.4 4.6 12.9 11.1 BG 21.6 3.2 13.7 61.6 CZ 29.2 8.4 29.1 33.3 DK 56.5 13.7 12.7 17.0 DE 63.8 3.2 17.5 15.6 EE 8.0 24.3 27.9 39.8 IE 29.5 3.8 41.7 25.0 EL 5.3 6.1 17.6 71.0 ES 35.7 7.1 24.7 32.5 FR 67.7 3.1 9.5 19.7 IT 44.8 14.0 19.4 21.8 CY 3.6 1.0 30.0 65.3 LV 4.2 2.4 6.3 87.2 LT 7.4 7.4 33.3 51.9 LU 25.5 2.2 29.8 42.5 HU 18.4 0.9 18.4 62.3 MT 14.1 8.5 62.7 14.8 NL 77.9 2.0 11.4 8.7 AT 50.9 6.5 16.2 26.5 PL 32.5 18.1 17.0 32.5 PT 28.4 20.9 20.0 30.7 RO 7.4 1.1 27.4 64.2 SI 8.8 2.6 35.7 52.9 SK 25.2 8.2 40.3 26.2 FI 74.5 3.2 10.2 12.1 SE 45.0 6.1 11.5 37.4 UK 56.3 14.9 23.4 5.4

EXTRAPOLATION

• Further estimation of SME & large firm proportions for undecided

cases (non-matched or missing information) • Stratification of company applicants by country, by category (non-

matched / missing info) and by patent volume (low / medium / high) • Random samples of applicants per stratum - sample size

calculations following Cochran (1977) to arrive at 95% confidence level.

• Web searches for identifying size • Extrapolation of the results to the population of company applicants

SME vs Large Firm applications – after extrapolation

Country Large companies (%) SME (%) Matched but missing information (%) Not matched (%)

EU-27 78.9 17.6 1.2 2.3 BE 79.2 18.2 2.6 0.0 BG 36.8 53.8 0.0 9.5 CZ 60.1 37.1 0.0 2.8 DK 67.2 27.6 1.5 3.7 DE 84.9 10.3 2.0 2.8 EE 19.9 77.8 2.3 0.0 IE 50.4 44.1 2.8 2.6 EL 46.1 39.6 0.0 14.4 ES 61.3 34.8 0.0 3.8 FR 83.4 14.1 0.1 2.4 IT 60.8 37.1 0.2 2.0 CY 28.3 62.7 0.0 9.0 LV 33.7 56.8 0.0 9.5 LT 50.5 49.5 0.0 0.0 LU 49.4 39.1 0.0 11.5 HU 59.3 37.0 0.0 3.8 MT 23.4 74.3 0.0 2.3 NL 83.8 14.6 0.7 0.9 AT 77.2 20.9 0.0 1.9 PL 62.0 34.0 4.0 0.0 PT 42.7 48.5 2.8 6.0 RO 46.9 47.5 5.6 0.0 SI 62.8 34.2 0.0 3.0 SK 43.7 51.0 0.0 5.3 FI 83.6 13.2 0.9 2.2 SE 78.8 18.9 0.2 2.2 UK 62.1 35.3 1.2 1.4

RESULTS

• For EU27, on average, SMEs account for 18% of national patent portofolio’s

• Considerable country differences:

0

10

20

30

40

50

60

70

80

90

DE FI FR NL

EU-2

7 BE SE AT DK PL SI ES UK

HU CZ IT LU EL IE RO PT LT SK BG LV CY MT EE

SME contribution (%) to national patent portfolio’s

ANALYTICAL OPPORTUNITIES

• Breakdown by technology domains: Specialization patterns of SMEs

• Are national-level technological specialization patterns driven by large established firms and/or by SMEs? – Relative technological advantage by country (EU27) by

Fraunhofer technology domain – National level RTA // SME RTA // large firm RTA

𝑅𝑅𝑅𝑅𝑅𝑅𝑁𝑁𝑁𝑁𝑁𝑁,𝑡𝑡 = 𝛼𝛼 + 𝛽𝛽1𝑅𝑅𝑅𝑅𝑅𝑅𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿,𝑡𝑡 + 𝛽𝛽2𝑅𝑅𝑅𝑅𝑅𝑅𝑁𝑁𝑆𝑆𝑆𝑆,𝑡𝑡 + 𝜖𝜖 – Data: EPO & USPTO patents (< PATSTAT), application years

2005-2011

National technology specialization patterns

Significant relation with SME specialization? no yes

Sign

ifica

nt rr

elat

ion

with

larg

e fir

m s

peci

aliz

atio

n?

no

Analysis of biological materials

Micro-structure and nano-technology

Environmental technology

yes

Semiconductors Electrical machinery, apparatus, energy

Measurement Audio-visual technology Biotechnology Telecommunications Macromolecular chemistry, polymers Digital communication

Food chemistry Basic communication processes Materials, metallurgy Computer technology Surface technology, coating IT methods for management Chemical engineering Optics Engines, pumps, turbines Contro

Other special machines Medical technology Mechanical elements Organic fine chemistry Transport Pharmaceuticals Furniture, games Basic materials chemistry Civil engineering Handling Machine tools Textile and paper machines Thermal processes and apparatus Other consumer goods

Availability of results to PATSTAT users

• ‘SME’ or ‘Large firm’ label for corporate applicants in

PATSTAT (October 2011 edition)

• Link on PERSON_ID in PATSTAT

• Upon request: contact TechnoInfo@ecoom.be

More details: