With a year to go before Brexit, swashbuckling, buccaneering Britain has a patent problem
In just over a year the United Kingdom will be leaving the European Union. According to those who fought for such an outcome during the 2016 referendum campaign, and have been responsible for implementing the result ever since as senior government ministers, once that happens a bright new dawn is set to break.
The UK, we are told, will throw away the chains imposed by the bureaucrats in Brussels and once again bestride the globe, doing trade deals with a multitude of grateful nations and, apparently, selling products we have not been able to sell before into markets that have been unable to buy them. Ask Foreign Secretary Boris Johnson and he will tell you that what he terms “Buccaneering Britain” stands to rule the world’s commerce waves once more.
Well, maybe. Others, though, see it differently. They would argue that, in fact, there has been little to stop the UK selling to the world for the last 40 years. If we have failed to do so, they’d say, those to blame are not wicked Europeans intent on holding us back, but senior decision-makers in business and government at home. It is the policies they have followed, the strategies they have pursued, that mean we do not actually produce enough stuff that people in other countries want to buy.
If you do incline to this view, patent data seems to back you up. Take, for example, the European Patent Office’s recently released annual report for 2017. This showed that UK-based entities accounted for just 3% of applications the office received last year. That put the UK, a G8 country, in seventeenth position in terms of patent applications per million of population. And it’s not just in Europe. Look elsewhere and you see a similar story.
In China in 2016 – the last year for which there is publicly-available data – British-based entities received 1,566 patent grants. That’s less than those from Japan, the US, Germany, South Korea, France, Switzerland and the Netherlands in absolute terms, and also below Sweden, Belgium, Finland, Singapore, Canada, Austria and Denmark on a patents-per-million of population basis.
Likewise, in the US in 2015, UK entities were granted 6,417 patents; less than those from Japan, South Korea, Taiwan, Germany, France, the People’s Republic of China and Canada in absolute terms, and on a population basis below Switzerland, the Netherlands, Israel, Finland, Austria, Denmark and Sweden, too.
Of course, we all know that patents do not equate to innovation. They are, however, an indicator of inventive activity; or, at a minimum, of a willingness to protect the outcome of such activity. And what the data is telling us is that when it comes to innovation that can be protected by patents, the UK is not doing as much of it as a lot of other countries; or that, if it is, it is not spending the money to get cover. Last week, it emerged that the UK invests below the EU average on R&D, so I will leave you to decide which of those scenarios is likeliest.
But whatever the reason, the UK's lack of patents makes it less likely that it will have a wide array of high-value products to sell the world, while being more dependent than many others on high value imports. Not surprisingly, this is pretty much what the trading statistics tell us is happening at the moment. It is, I submit, no-one's fault but our own.
For the last few years, millions of people in the UK have been led to believe that the only thing that lies between their country and a golden tomorrow is "freedom" from the European Union. The UK’s patenting record, though, indicates that it is a bit more complicated than that.
As Brexit unfolds, we are going to find out the truth about the UK and why it lags so many of its competitor countries in terms of export prowess, R&D investment, productivity and growth. When we do, Boris Johnson and his friends may find that buccaneers is not the B word most people use about them.