Patent statistics: deciphering a 'real' versus a 'pseudo' proxy of innovation

Patent statistics have fascinated economists concerned about innovation for a long time. However, fundamental questions remain as to whether or not patent statistics represent the real state of innovation. As Griliches pointed out, substantial questions involve: What aspects of economic activities do patent statistics actually capture? And, what would we like them to measure? He pointed out that these statistics can be a mirage appearing to provide a great number of objective and reliable proxies for innovation. This paper aims to address some of these questions by making a comparative evaluation of the representability of patent statistics in four levels of the innovation process, using as examples research and development (R&D) in Japan's printer and photovoltaic solar cell (PV) industries over the last two decades. Furthermore, this research provides a new set of patent statistics which could be considered a more reliable proxy for innovation. (C) 2001 Elsevier Science Ltd. All rights reserved.