The use of patent data for technological forecasting: The diffusion of CNC-technology in the machine tool industry

In the 1980s, a dramatic change in the competitive structure of the machine tool industry through the development and implementation of CNC-technology occurred. For the individual company, the timely anticipation and forecast of these technological challenges has been of vital importance in order to incorporate these technological changes into its strategic planning process. This paper assesses the suitability of patent data for forecasting technological developments, based on the experience in the case of CNC-technology. Following a general description of the technological life cycle concept and the discussion of possible benefits of patent data as a technological forecasting tool, actual patenting activity in CNC-technology is analysed. It is found that the diffusion of CNC-technology can be appropriately described by means of patent data. Different development stages in the life cycle of CNC-technology can be distinguished, where for each stage strategic R&D investment decisions can be derived. Analysing the impact of CNC-technology on the trade pattern between Japan and Germany clearly reveals that patenting activity causes subsequent and immediate market changes. The strong Japanese patent position in CNC-technology is closely associated with favourable trade changes. Consequently, it is recommended to incorporate the systematic and continuous monitoring of patenting activity into a company's overall competitor monitoring intelligence. Especially for small and medium-sized enterprises, patent data analysis provides a technological forecasting instrument with high potential benefits and relatively low cost.