Product Development Innovation Productivity Is Declining (.PDF Download)

Oct. 26, 2017
Product Development Innovation Productivity Is Declining (.PDF Download)

Over the past decade numerous studies and research efforts have consistently found that R&D productivity, a synonym for efficiency, is declining—across all industries. Indicators come from a number of sources across several different domains.

Eroom’s Law: From our daily life experience, many of us have already heard about the woes of the pharmaceutical and biotechnology industries. The decline is so prolific that a study published by Nature coined a new law, “Eroom’s Law.” Eroom’s Law is the opposite of the well-known Moore’s Law, which describes the geometric growth of computing power over time. Thankfully, the Eroom trends are not as alarming in other industries.

Intellectual Property Indicators: Patents are one measure of innovation productivity. Thomson Reuters’ 6th State of Innovation Report in 2015 showed a slowing in the growth of global patent filings from 20% in 2012, to 17.7% in 2013, to 3.3 % in 2014. The absolute number of filings is increasing, but the growth is slowing. Thomson spun out Clarivate Analytics and their 8th State of Innovation Report in 2017 showed growth at 8%. The news is possibly better in the U.S. and Europe. China now accounts for six of every 10 patented inventions and has slowed disproportionately.

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