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 pa tent statistics represent the real state of innovation. As Griliches pointe d out, substantial questions involve: What aspects of economic activities d o patent statistics actually capture? And, what would we like them to measu re? He pointed out that these statistics can be a mirage appearing to provi de 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 t he innovation process, using as examples research and development (R&D) in Japan's printer and photovoltaic solar cell (PV) industries over the last t wo decades. Furthermore, this research provides a new set of patent statist ics which could be considered a more reliable proxy for innovation. (C) 200 1 Elsevier Science Ltd. All rights reserved.