Technology development in
the EU-27
In search of the contribution
by SMEs
Small & medium sized enterprises
• SMEs are seen as an essential driver of economic
growth in Europe (Eurostat 2009)
– 99,8% of non-financial companies in Europe classify as SMEs
– Within the non-financial business economy SMEs represent
• 57,4% of turnover
• 58,7% of value added
• 66,7% of employment
– SMEs are assumed to play a pivotal role in the innovation
process (EC 2000)
• Ability to respond quickly to changing market needs
• Ideal setting to develop and roll out new technologies
The importance of IP strategy in
R&D intensive SMEs
• Corporate IP strategy: how to protect market position and
competitive advantage created through sustained R&D
efforts? How to appropriate returns from extensive R&D
and increase operating profit and added value?
 2 IP strategy options:
– Secrecy
– Intellectual property rights
• Signaling function of patents (especially relevant for
SMEs):
– To customers: brand and marketing value
– To investors and creditors: granted patents suggest novelty of technology and
potential for future earnings  attracting VC,…
– To employees: attract promising personnel, enhance employee moral
– …
Barriers for SMEs to apply for IPR
• Barriers for SMEs to engage in patent activity
– Lack of understanding of IPRs and application procedures
– Fear for disclosing innovation to industry majors
– Cost of patent application: patent office administrative fees,
patent attorney fees, industrial property consultancy
– Cost of maintenance: (increasing) maintenance fees
– Cost of legislation after grant : defence costs to enforce patent
protection against infringers (even worse in complex industries,
defending a patent can mean betting the company for an SME)
Policy awareness
• Policy awareness regarding the role of SMEs within
national innovation systems
– Europe:
• European Commission hosts an IPR-helpdesk for SMEs
• Unitary EPO patent (25 of 27 member states), reducing administrative costs,
translation costs and litigation costs
– Japan:
•
•
•
•
•
•
SME IP support at prefectural SME support centers
Database of senior personnel in large companies with experience in IP
Prior-art patent searching free of charge for a.o. SMEs
Reduction and exemption of patent annuities for a.o. SMEs
Accelerated examination system
JPO assistance for strategic foreign applications by regional SMEs
• Large scale mapping and monitoring of SME contribution
to patenting is currently absent! Due to considerable
methodological challenges,
Patent data: opportunities and
challenges
• Opportunities: systematic availability of patent data (e.g.
PATSTAT) with detailed information on:
–
–
–
–
–
–
Applicants, inventors
Address information
Technology domain
Claims of the patent
Cited prior art
…
• But: patent databases contain no business information
on applicants, not even VAT number  how to identify
SME’s among patent applicants?
European Commission 2003 SME
definition: financials
Financial data: opportunities and
challenges
• Opportunities: systematic availability of financial data
with detailed info on turnover, staff, assets, shareholders,
…
• Deficiencies in financial data (e.g. Amadeus)
– Due to national legislation, among others in line with European
Commission accounting directives, certain types of companies
(among others companies not trespassing certain size criteria
and having simple ownership structures are not obliged to
comply with full disclosure and can publish simplified annual
accounts or are exempted from disclosing financial information
altogether.
– In addition serious issue with information coverage in financial
databases (absence of firms, as well as absence of specific
information on firms that are covered)
 Relaxing the SME criteria
European Commission 2003 SME
definition: ownership
• Company ownership information should be considered
as well: ‘SMEs’ partly or fully owned by larger companies
can benefit from the financial strength and/or centralized
R&D / IP department expertise of the business group
assessment of shareholder structure per company to
determine true size of a business and the resources to
which it has access (at the business entity or business
group level)
• Entities with mother company (+50%): dependent
• Entities without mother company (no +50% shares): independent
Feasibility study
• EUROSTAT (2012 – 2013): Feasibility study on largescale identification of SME contribution in patenting
• ECOOM – INCENTIM (KU Leuven)
• Coverage: EU-27
• Methodology:
– Matching company names in patent database and financial
database using name harmonization techniques
– Disambiguation of multiple matches
– Allocation of matched patenting companies with sufficient
financial and ownership information to size-categories
– Size verification of representative samples of unmatched
corporate applicants and matched companies with insufficient
financial/ownership information (ongoing)
Matching PATSTAT – AMADEUS
Country
AT
BE
BG
CY
CZ
DE
DK
EE
ES
FI
FR
GB
GR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
Total
# Applicants
6.918
5.700
146
495
819
70.972
7.635
178
8.517
6.480
31.065
41.445
399
855
3.046
29.186
22
1.504
113
179
15.313
687
698
76
14.259
490
206
247.403
# Matched
applicants
4.253
4.308
57
150
577
46.917
5.260
104
5.256
4.643
20.242
33.449
130
92
2.184
21.688
10
643
26
134
11.048
442
434
26
9.293
147
141
171.654
% Matched applicants
61,48%
75,58%
39,04%
30,30%
70,45%
66,11%
68,89%
58,43%
61,71%
71,65%
65,16%
80,71%
32,58%
10,76%
71,70%
74,31%
45,45%
42,75%
23,01%
74,86%
72,15%
64,34%
62,18%
34,21%
65,17%
30,00%
68,45%
69,38%
# Applicants
25.293
26.121
190
932
1.450
537.091
29.469
226
17.017
50.997
179.521
129.728
676
1.674
8.761
77.174
27
5.399
288
426
132.864
1.179
1.065
95
84.813
1.431
305
1.314.212
# Matched
patents
18.541
22.444
70
323
965
443.974
24.368
130
11.413
44.439
140.816
112.384
195
121
6.061
60.025
13
3.031
37
361
118.698
796
738
34
52.711
434
225
1.063.347
% Matched patents
73,30%
85,92%
36,84%
34,66%
66,55%
82,66%
82,69%
57,52%
67,07%
87,14%
78,44%
86,63%
28,85%
7,23%
69,18%
77,78%
48,15%
56,14%
12,85%
84,74%
89,34%
67,51%
69,30%
35,79%
62,15%
30,33%
73,77%
80,91%
SME vs. large company applicants
Corporate
Country applicants
per ctry
AT
BE
BG
CY
CZ
DE
DK
EE
ES
FI
FR
GB
GR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
Total
3.043
2.236
107
245
500
30.137
3.593
112
4.235
2.684
10.774
16.768
209
501
1.255
13.101
16
654
74
82
6.994
401
382
57
6.229
266
124
104.779
Matched
corporate
applicants
per ctry
1.619
1.493
43
62
335
16.188
2.082
63
2.384
1.705
5.517
12.318
58
64
859
8.933
8
249
18
51
4.547
238
192
17
3.413
76
76
62.608
Non-dependent (<50%
owned) SMEs
281
190
4
5
61
2.882
497
27
281
192
682
2.959
14
11
41
2.796
2
38
2
5
197
50
52
1
151
9
10
11.440
17,36%
12,73%
9,30%
8,06%
18,21%
17,80%
23,87%
42,86%
11,79%
11,26%
12,36%
24,02%
24,14%
17,19%
4,77%
31,30%
25,00%
15,26%
11,11%
9,80%
4,33%
21,01%
27,08%
5,88%
4,42%
11,84%
13,16%
18,27%
Large companies
293
226
20
2
68
3.241
198
2
350
224
995
1.058
8
3
50
1.255
37
3
4
367
57
35
4
319
9
13
8.841
18,10%
15,14%
46,51%
3,23%
20,30%
20,02%
9,51%
3,17%
14,68%
13,14%
18,04%
8,59%
13,79%
4,69%
5,82%
14,05%
0,00%
14,86%
16,67%
7,84%
8,07%
23,95%
18,23%
23,53%
9,35%
11,84%
17,11%
14,12%
Dependent SMEs
Dependent SMEs
Dependent SMEs
assignable to SME
assignable to large
assignable to large
company type based on company level based on company level based on
consolidated mother
consolidated mother
sum of unconsolidated
company financials
company financials
business group financials
2
22
1
126
113
29
110
78
658
1
21
142
1
1
280
1
3
344
1.933
0,12%
1,47%
0,00%
0,00%
0,30%
0,78%
5,43%
0,00%
1,22%
6,45%
1,41%
5,34%
0,00%
1,56%
2,44%
1,59%
0,00%
0,40%
0,00%
1,96%
6,16%
0,42%
1,56%
0,00%
10,08%
0,00%
0,00%
3,09%
46
88
3
1
8
911
91
1
98
91
283
482
1
1
15
354
11
1
202
7
10
197
1
2.903
2,84%
5,89%
6,98%
1,61%
2,39%
5,63%
4,37%
1,59%
4,11%
5,34%
5,13%
3,91%
1,72%
1,56%
1,75%
3,96%
0,00%
4,42%
5,56%
0,00%
4,44%
2,94%
5,21%
0,00%
5,77%
0,00%
1,32%
4,64%
72
44
1
1
5
544
43
49
15
207
393
1
14
111
3
1
84
2
3
55
2
1
1.651
4,45%
2,95%
2,33%
1,61%
1,49%
3,36%
2,07%
0,00%
2,06%
0,88%
3,75%
3,19%
0,00%
1,56%
1,63%
1,24%
0,00%
1,20%
5,56%
0,00%
1,85%
0,84%
1,56%
0,00%
1,61%
2,63%
1,32%
2,64%
SMEs with unknown
dependence status
920
914
15
21
190
8.302
1.125
31
1.574
1.064
3.231
6.472
32
46
683
4.246
6
154
11
41
3.319
114
86
12
2.337
46
51
35.043
56,83%
61,22%
34,88%
33,87%
56,72%
51,28%
54,03%
49,21%
66,02%
62,40%
58,56%
52,54%
55,17%
71,88%
79,51%
47,53%
75,00%
61,85%
61,11%
80,39%
72,99%
47,90%
44,79%
70,59%
68,47%
60,53%
67,11%
55,97%
No financials available
5
9
32
2
182
15
2
3
9
41
296
3
1
35
29
5
98
7
3
10
10
797
0,31%
0,60%
0,00%
51,61%
0,60%
1,12%
0,72%
3,17%
0,13%
0,53%
0,74%
2,40%
5,17%
1,56%
4,07%
0,32%
0,00%
2,01%
0,00%
0,00%
2,16%
2,94%
1,56%
0,00%
0,29%
13,16%
0,00%
1,27%
SME vs large company applicants
• Large entities
• Independent small entities
• Dependent small entities
– Small at group level (consolidated financials available)
– Large at group level (consolidated financials available)
– At least large at group level (sum of mother & daughter
financials)
• Small entities with unknown dependence status (sample
checks for extrapolation)
• No financials available (sample checks for extrapolation)
SME vs large company
applications
Applications
Applications
assignable to
assignable to
matched
Country
corporate
corporate
applicants
applicants
per ctry
per ctry
AT
BE
BG
CY
CZ
DE
DK
EE
ES
FI
FR
GB
GR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
Total
25.009
25.934
187
932
1.422
527.445
29.176
209
16.777
50.681
176.664
128.184
661
1.606
8.745
75.864
27
5.387
222
426
131.526
1.163
1.015
95
84.433
1.426
288
1.273.254
18.476
22.328
70
323
952
439.928
24.247
119
11.320
44.257
137.122
111.584
194
120
6.058
59.417
13
3.024
37
361
118.187
796
729
34
52.602
434
222
1.034.461
Non-dependent (<50%
owned) SMEs
1.620
2.222
6
7
113
15.953
3.208
55
1.009
1.135
5.123
12.754
41
27
139
10.017
2
109
7
29
933
157
211
1
2.286
25
25
57.204
8,77%
9,95%
8,57%
2,17%
11,87%
3,63%
13,23%
46,22%
8,91%
2,56%
3,74%
11,43%
21,13%
22,50%
2,29%
16,86%
15,38%
3,60%
18,92%
8,03%
0,79%
19,72%
28,94%
2,94%
4,35%
5,76%
11,26%
5,53%
Large companies
10.949
14.563
37
10
362
293.621
15.159
6
4.801
35.146
106.232
52.893
29
5
1.205
30.790
1.221
9
56
89.878
272
223
5
34.451
62
59
681.095
59,26%
65,22%
52,86%
3,10%
38,03%
66,74%
62,52%
5,04%
42,41%
79,41%
77,47%
47,40%
14,95%
4,17%
19,89%
51,82%
0,00%
40,38%
24,32%
15,51%
76,05%
34,17%
30,59%
14,71%
65,49%
14,29%
26,58%
65,84%
Dependent SMEs assignable Dependent SMEs assignable
to SME company type based
to large company level
on consolidated mother
based on consolidated
company financials
mother company financials
5
74
7
941
795
197
458
387
5.464
2
157
786
2
7
1.646
3
12
2.853
13.796
0,03%
0,33%
0,00%
0,00%
0,74%
0,21%
3,28%
0,00%
1,74%
1,03%
0,28%
4,90%
0,00%
1,67%
2,59%
1,32%
0,00%
0,07%
0,00%
1,94%
1,39%
0,38%
1,65%
0,00%
5,42%
0,00%
0,00%
1,33%
415
1.221
3
4
46
30.181
727
1
690
685
3.474
5.670
7
1
362
2.290
49
1
2.010
71
60
1.792
1
49.743
2,25%
5,47%
4,29%
1,24%
4,83%
6,86%
3,00%
0,84%
6,10%
1,55%
2,53%
5,08%
3,61%
0,83%
5,98%
3,85%
0,00%
1,62%
2,70%
0,00%
1,70%
8,92%
8,23%
0,00%
3,41%
0,00%
0,45%
4,81%
Dependent SMEs assignable
to large company level
based on sum of
unconsolidated business
group financials
558
501
1
1
11
8.073
233
207
115
1.873
5.644
8
240
635
9
2
1.277
5
7
541
16
5
19.951
3,02%
2,24%
1,43%
0,31%
1,16%
1,84%
0,96%
0,00%
1,83%
0,26%
1,37%
5,06%
0,00%
6,67%
3,96%
1,07%
0,00%
0,30%
5,41%
0,00%
1,08%
0,63%
0,96%
0,00%
1,03%
3,69%
2,25%
1,93%
SMEs with unknown
dependence status (+/-)
4.908
3.459
23
99
421
91.332
3.966
60
4.462
5.173
20.084
27.604
113
76
3.545
14.956
11
1.591
18
269
15.526
271
214
28
10.427
109
135
208.832
26,56%
15,49%
32,86%
30,65%
44,22%
20,76%
16,36%
50,42%
39,42%
11,69%
14,65%
24,74%
58,25%
63,33%
58,52%
25,17%
84,62%
52,61%
48,65%
74,52%
13,14%
34,05%
29,36%
82,35%
19,82%
25,12%
60,81%
20,19%
Overall corporate applicants
matching/size-class status
Contribution of this research
•
•
•
•
Scope of exercise: full EU-27
Use of comprehensive SME definition
Incorporating shareholder information
Dataset and deducted indicators on SME contribution in
technology development with this scope and coverage
provides a number of applied research perspectives:
– Technology management in SMEs
– Investors in technology SMEs
– …