Key insights of the WIPO's Intellectual Property Report 2024

Georgina Horváth
May 16, 2024
Reading time:
5 minutes

The World Intellectual Property Organization (WIPO) recently released the World Intellectual Property Report 2024, entitled Making innovation policy work for development. WIPO introduces a new way of understanding innovation across more than 150 countries and looks at nearly 40 million patent filings from two decades, over 70 million scientific papers, and economic activities amounting to more than $300 trillion.  

The report aims to identify the need for diversifying national economies, emphasizing the highly concentrated nature of the global innovation economy. It outlines the evolving landscape and the necessity for updated industrial policies to adapt to changing global economic conditions. This blog post summarizes and presents some of these insights, including the dynamics of economic development and diversification in the global innovation landscape. 

Economic growth and diversification

Many of the industrial policies implemented by national governments in the last century have succeeded in achieving technological diversification in order to react to the drastic changes in economic conditions over the past 20 years, according to the WIPO report. 

For example, import substitution and export-led growth have been used since the 1950s. Import substitution is a trade policy that encourages domestic production instead of importing foreign products, while export-led growth is when a country primarily focuses on expanding its exports, which can lead to an increase in its national income. These strategies have shown mixed success and a need for adjustments to align with today’s economic environment since it is likely that these strategies favor certain sectors at the expense of others. 

One of the findings of the recent report is that innovation is highly concentrated. Eight countries account for 50% of all exports, 60% of all scientific publications, and 80% of all international patenting activities. The shift in industrial policies from import substitution and export-led growth to strategies that build on national science, technology, and innovation (STI) systems, encourages improved technology commercialization and absorption.

Innovation capabilities by regions

WIPO reflects a significant concentration of innovation outcomes, with the United States and Japan together accounting for 50% of all technology outputs. China is notable too, accounting for 14% of all science outputs and 10% of production outputs. 

On the other hand, the rest of the world still leads in production outputs, owning 65% of this segment, which indicates that manufacturing capabilities are more evenly spread across the globe. 

Share of innovative outputs vs. GDP share 2001-2020 from the WIPO IP report 2024

The data highlights the differences in innovation output and economic contribution across regions, reflecting how innovation is concentrated in certain high-income countries, while others contribute significantly to global output and GDP. The report suggests that smart specialization policies help nations bridge innovation capability gaps and improve tech commercialization.

Patenting boom and global diversification

A notable aspect of the report is the patenting boom in China. The country has seen a dramatic increase in its technological strengths, with its specialization in technological capabilities skyrocketing from just 16% to 94% from 2004 to 2020, largely driven by an exponential increase in patent filings

This boom has notably narrowed the technological gap between lower-income and higher-income nations. Similarly, the Republic of Korea and India also reported substantial gains; Korea's science and technology specializations increased from 40% to 66% and 83%, respectively, while India's specialization in science advanced from 42% to 68%, and its technology specialization grew from 9% to 21%. 

On the other hand, Germany and Japan, which initially had high specialization, saw declines in all three sectors by 2020. These trends underline the growing importance of patenting activity in the global innovation landscape.

Number of specialized capabilities by dimension 2004-2020 from the WIPO IP report 2024

Case studies

The World Intellectual Property Report examines three case studies that illustrate the role of innovation capabilities and local conditions in shaping industry development. Here are some highlights with their main ideas and essential statistics:

AgTech sector evolution

The first case study looks at the expansion of the agricultural technology (AgTech) sector, highlighting how countries are tailoring technologies to local agricultural conditions. Between 2000 and 2021, the number of patent applications in this sector increased significantly, indicating its growing importance and technological progress.

The study highlights the critical role of government support, emphasizing that R&D funding and innovation-friendly policies are essential for the progress of the AgTech sector. 

Examples from Brazil, Kenya, and the United States show how leveraging local expertise alongside policy measures has resulted in significant technological improvements in agriculture. A pressing challenge for the sector is the global need to significantly increase agricultural output to feed an estimated 10 billion people by 2050, nearly two billion more than the current global population. Investment in the AgTech sector is becoming increasingly urgent as natural resources become more limited and scarce.

Transformation in the motorcycle industry

The motorcycle industry is moving from traditional combustion engines to electric models due to advances in technology, new regulations, and changing market demands. Between 2017 and 2022, there has been a significant rise in patent applications for electric vehicles, along with growth in the electric bicycle market, underscoring a broader shift toward more sustainable transportation options.

Countries such as Italy and Japan are using their long-standing automotive expertise to adapt to new environmental standards and changing consumer preferences by integrating electric technologies into their motorcycle production. The study shows that electric motorcycle manufacturing is growing fast in many Western countries, such as Germany and the United States, as well as in Asian markets, such as China and India

Video game industry dynamics

The development of global video game hubs illustrates how economic complexity and interconnection drive the growth of creative industries. This case study shows how regions are building on their existing creative and technological strengths to create competitive gaming sectors. In the United States and Japan, strong IT and entertainment sectors have laid the groundwork for thriving video game industries. The US benefits from a strong technological infrastructure and skilled workforce, particularly in regions such as Silicon Valley and Seattle, while Japan integrates consumer electronics with elements of anime and mobile technology to remain competitive in the gaming world. 

Similarly, Finland has capitalized on its telecommunications prowess and Nokia's legacy to become a leader in mobile gaming, as exemplified by companies such as Rovio and Supercell. Poland's success, particularly with CD Projekt's Witcher series, illustrates the strategic use of cultural relevance and localization in game development. 

Taken together, these hubs demonstrate the power of local expertise and related industries to drive innovation and competitiveness in the video games industry and provide key insights for policymakers on how to foster industry growth through smart specialization and related skills.

The WIPO Intellectual Property Report 2024 offers valuable insights into the strategic management of IP in a rapidly evolving global innovation landscape. It indicates that the innovation infrastructure and expertise developed by countries are not easily transferable to other countries. The study concludes that by adopting smart specialization policies to close innovation gaps, countries can more effectively identify and address their own innovation challenges.

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