 Ladies and gentlemen, very good morning to you all. Thank you for coming and I'm very glad Karsten Finke is here, our Chief Economist who directed the work on this report. As Samah has said, we publish these reports every two years. So we published the first one on the changing face of innovation now some four years ago and the second one on brands, brands reputation and image in the global marketplace and this one as Samah has also mentioned on breakthrough innovation and economic growth. So what's the idea here, just some preliminary words if I may. Well first of all, economic growth you're all extremely familiar with and while one can't consider it a panacea for all problems in the world it is of course extremely important and I think you're very familiar with the reasons why it's important, it improves living standards, creates new employment opportunities and helps alleviate poverty. So we're all very much focused on economic growth as one of the essential components really of our economic analysis of the state of the world. Now can we take economic growth for granted and our experience since the global financial crisis of course in 2008 is one in which economic growth rates have consistently disappointed. Year after year since 2008 we've seen disappointing growth rates and various people are raising the question as to whether low growth is the new normal as they say and that is one of the things that has driven us to the theme this year because part of the answer in terms of economic growth is innovation. Not necessarily all of the answer but part of the answer is certainly innovation and historically major breakthroughs in technological innovation, technological progress have been the root of long lasting expansions of economic growth. So in many ways what we see in the 21st century of course is an acceleration of innovation activity, certainly an acceleration of interest, a concentration of interest in innovation. But how far are the breakthroughs of today going to take us tomorrow and that remains an open question. Our next link of course is intellectual property and intellectual property is an essential but not sufficient condition or component of a healthy innovation ecosystem. However, the way in which it operates to support innovation is complex and it does vary across technologies and different forms of intellectual property. So it's to shed light on these channels in particular that is the influence of intellectual property to be a bit more subtle and sophisticated about our analysis of intellectual properties influence in relation to innovation, in turn in relation to economic growth that we have focused this report on breakthrough innovations and economic growth. The report presents a series of case studies, there are six case studies, three about historical technological breakthroughs and three about contemporary technological breakthroughs. So the three historical studies are aeroplanes, antibiotics and semiconductors and the three contemporary breakthroughs or potential breakthroughs are 3D printing, nanotechnology and robotics. Briefly then what are the report's main findings, well first of all it emphasises once again the elements of successful innovation ecosystems, namely first of all government support and funding for scientific research and support for moving through the complex process of moving technology from the laboratory to the production stage. Many competitive market forces that encourage firms to innovate supported by vibrant financial markets and sound regulation and then fluid linkages between the public and private institution or innovation actors. One of the first findings or main findings is that breakthrough innovation remains geographically concentrated, relying on patent mapping which we have done in the report. It shows that six countries accounted for 75% of all time patent filings in the areas of 3D printing, nanotechnology and robotics, the three potential breakthrough areas. And those six countries are perhaps no surprise, Japan, United States, Germany, France and the United Kingdom and the Republic of Korea. China is the only emerging middle-income country that's moving up closer to this group of countries and looking at more recent history, so the first figures I gave you were for all time activity. Well I'll give you, I gave you 3D printing nanotechnology and robotics, all time figures. Now if you look more recent history, patents filed since 2005, China accounts for more than a quarter of patents worldwide in 3D printing and robotics, okay? So it's a good indication that here's a new player in the group of the big actors in this area. It also shows the report or documents how innovation is increasingly linked to universities and research institutions. That's something I think that we've spoken about in the past that we know about. So if you take again the three potential breakthroughs, 3D printing, nanotechnology and robotics, it shows higher shares of patenting compared to the historical cases of airplanes, antibiotics and semiconductors for universities and public research institutions. And nanotechnology in particular is a standout with academic applicants accounting for around a quarter of patenting worldwide. Another important finding is that innovation has flourished as a result of knowledge sharing mechanisms. So historically the first clubs of amateur airplane inventors to more contemporary models of open innovation in 3D printing and robotics and we believe that intellectual property is an important mechanism in this because it provides for, first of all, disclosure and secondly a very flexible tool for managing cooperative arrangements in relation to research and development for example by licensing. Now will those three that we've looked at which are potential areas change the world tomorrow in terms of economic growth? That's an open question and for that, besides listening to Carsten, I would encourage you to come to our panel this afternoon in which we have three outstanding economists who will be participating in a discussion about this matter. So perhaps if I may I'll hand over to Carsten. Thank you Director General and good morning to everyone. I won't say much just to emphasise that really one original contribution of our report is the mapping of patents for the six fields of innovation that the Director General mentioned. So through a variety of techniques we did our best to identify all the patent documents in international patent databases and sometimes interestingly for airplanes you know that goes back to the 19th century. Now this is not a statistical report you know we'll present our main flagship statistics report our world IP indicators in December but I think that as journalists you might be interested in you know some of the statistics that emerge out of our patent mapping. So specifically if you look at page 13 in the executive summary you for example would find the top ten applicants for the nanotechnology 3D printing and robotics fields. So a US company called 3D Systems which is a specialised 3D printing company is the top filer for 3D printing and Samsung Electronics of the Republic of Korea emerges as the top filer for nanotechnology and Toyota of Japan as the top filer for robotics and also what is important to keep in mind when you look at these figures these are all time patent filings so whenever patenting in those fields of technology started to emerge until the latest available data and also when you look at patent filing figures here we look at a concept called first patent filings so we look at whenever companies or universities or individuals really present new inventions to patent offices because we feel that is the closest we get to the concept of a new invention and you know that is ultimately what we want to measure. Actually the patent mappings also tell us something about where companies seek protection for their inventions so the figures that the director general mentioned when we report that patent filings are highly concentrated that is in terms of origin that you know is approximately where the innovation takes place we also look at you know where are those inventions protected and it turns out that you know there is strong correlation it is also the high income markets that you know where most of the patents in the fields of 3D printing nanotechnology and robotics are filed low and middle income countries on average receive less than 3% of patents filed worldwide in these three innovation fields. I think that has to do with the fact that high income countries are the economies that of course offers the largest markets for these technologies but also these are the countries that host the technologically most sophisticated competitors so this is where you know companies want to protect their technologies. This is all I wanted to say of course this is a this is a rich report I think each of these case studies you know has interesting conclusions sometimes it's hard to generalize them but we'd be happy to answer any questions you may have on the report. I'm not sure well it's a question of time factor isn't it but Kastun have a shot and on the first one how do we choose those and certainly there is an element of arbitrariness we purposely wanted to look at specific fields of breakthrough innovation also you know we are quite interested in the role of intellectual property and it's quite insightful to look at this in concrete terms. We did do a lot of reading before choosing these fields of breakthrough innovations and I think we can fairly say that the three historical ones and also the three current ones really appear quite prominently on lists of major innovations of the 20th century for example and also when it comes to discussions on what might drive growth in the future nanotechnology 3d printing and robotics are frequently mentioned now we don't pretend to know that these are the ones you know that really will really become important we wanted to you know select a few of course we have resource limitations so we probably can't claim generality but I would say that you know these are the ones that you know certainly of some importance and I think on the second question I think that's also something that emerges especially from the historical case studies I think you know from the viewpoint of I would say both policymaking and business perseverance is important you know innovations often take years and decades to really you know materialize in terms of economic growth especially when innovations transform economic structures when they're at the root of new industries when there's need to acquire new skills in the workforce you know that's not something that you would expect to happen from one year to the next someone really has to have a long-term perspective here I would also if I may suggest that the linkage the nexus that you draw is a little bit too abrupt you could say you could say where would we be if there have not been that innovation so I mean I think we'd have to analyze the components of economic growth and look at what the contribution of innovation was and then there is the time factor and I haven't seen them but I imagine it comes out of the UNESCO Institute for statistics I think on what its precise name is and there is also well there are various you know reports around the world of that seek to document the amount of investment in R&D of course the National Science Foundation does it the OECD does it as well so I'm not sure without seeing those maybe if I can make one more point which we also make in the report it is certainly true if you look at various indicators of innovation activity you know that certainly includes the R&D statistics that UNESCO publishes but it also includes our own patent filing statistics I think one can probably say that never ever has the world invested so much in innovation but it's also the case that you know technological problems are increasingly complex and finding solutions to them is not is certainly not getting any easier and there is a discussion where we don't take a position but there is a discussion among academics there's some academics who argued that it may be hard to match the achievements of some of the past technological breakthroughs so if you look at an areas of health you know we have antibiotics in the report antibiotics is really at the root of major expansions in life expectancy and decline in mortality you know average life expectancy at the beginning of the 19th century was somewhat below 50 years in high-income countries it's generally above 70 years in Japan it's even above 80 years and you know even if one is optimistic about some of the things that are happening in the biosciences field you know there is a question can we see you know similar leaps let's say in in terms of you know increases in life expectancy speed of travel communication as we have seen in the past again we don't take a position but I think that's that's an important question. Tom and then Tom? Tom Miles from Reuters. I have a technical question first of all which is about these graphs I noticed that you do comparison two sets of years one is 95 to 2001 the other was 2005 to 2011 I just want to you know there's a sort of strange way of having two chunks of history what is the gap in between I don't know whether it matters but I just wonder one of those you know why you chose those periods and these graphs. Yeah I mean there is there's no particular reason we could have well I mean I guess we wanted to have a comparison you know to what has happened in the 90s and what happened in more recent history I think in the these charts are also summary charts of you know essentially you have the full time series then in the chapter so this was what just one way of summarizing it. So the questions I want to ask a little bit I have two questions one is what should we read into China having such a predominance of I guess it's universities or sort of state or non-enterprise organizations taking out patents and secondly from your historical study have you concluded anything about countries getting a first mover advantage in in patents because it seems like you know Japan did all of semiconductor patenting for years and years and years but then there was a huge growth in other countries joining in and you know I mean I guess Japan is a important player but is it true to say that countries are too late to join in I don't know for robotics or nanotechnology patenting now. I think these are really good questions. Well look on China of course it's an economy that's organized in a different manner so if you have the state as a principal actor in the economy then a question arises as to how they're going to channel their investment in research and development and there are state-owned enterprises on the one hand and there are the research and development institutions and universities on the other hand so I think it's a question of strategic choice on the part of the Chinese leadership and then the extent to which state-owned enterprises and other enterprises take up investment in research and development will be a function of of their particular strategies and I suppose that what we see is that of course it's heavily dominated by the state the investment in research and development. Does that mean for example that there'll be a wider field of people who can take that intellectual property and develop it rather just one small lab in a company like HP or whatever in the states that we're doing? Possibly China has introduced this year the equivalent of the Baidol Act so the Baidol Act was a major piece of legislation the Baidol Act B-A-Y-L I think D-O-H-L the major piece of legislation in the 1980s or 1984 if I'm not mistaken the United States to get the results of research and development that has been funded in the public sector into the productive sector so it's a very market-oriented measure and interestingly China has adopted that measure within the last 12 months so it's a measure to get this research into the productive economy so yes it we will see what happens I suppose and you second I'm sorry question was I just wonder whether it matters to whether okay I was yes well I'm sure it does and Castan might have something to say about that but let me if I may say one other thing which is there are breakthrough sectors and there are breakthrough innovations within a sector so it's interesting to look at the how the whole sector you know performs and who's dominant in it but if you look at semiconductors of course then the Kilby patent of Texas Instruments in 1962 was the fundamental invention in the whole field of course a lot has happened since then but it was a fundamental invention in the in the whole field which started it was the semiconductor you know the original integrated circuit maybe one or two observations on China first to clarification on the data so the data when we report chairs of university and public research organization these are really universities and public research organization and not state-owned companies state-owned companies would you know show up as as corporations in our data also these findings are quite specific to the three technologies at hand if one looks at others for example at digital communications there you have a much stronger presence of companies in the patenting landscape this is something that we you know frequently point out when we publish our statistics report now I think there may be two ways one one could look at you know the high presence of universities and public research organization in in China one way is to argue that well maybe you know in these areas the capacity of the private sector you know to commercialize technology is is is you know relatively more limited obviously in a large economy like like China it's it's it's there I think the more you know sort of long-term view on this is and you know there I can at least give you one sort of piece of evidence from our case studies is that you know the fact that you know China has sort of a scientific capacity you know where the commercial orientation as reflected in the patent findings may prove to be important in the future and to give you one example from our report which is the example of airplanes you know as we all know there's some controversy but you know the first flight of the flying machine you know took place in the United States by the Wright brothers but it was then subsequently Germany where sort of you know Germany was at the center of airplane development and that's where most of the technological progress occurred what our case study seems to suggest is that that was largely because of a sort of strong prior scientific capacity when the Wright brothers invented the airplane they really didn't understand how why an airplane flew it was largely trial and error and that only happened later on now the environment in Germany was one where many of the pilots had a scientific background where many of the entrepreneurs that drove airplane development has had close links to the science system and that environment turned out to be extremely fruitful you know for airplane development and you know only later when the United States sort of then became after the Second World War a leader in airplane development a lot of that was due to German scientists actually moving to to the United States I think the only point I want to make here is that you know yes I think these initial conditions matter I think there's a lot of serendipity in there they are often hard to predict but I think in the case of China you know one sort of has to assess that you know maybe in 20 or 30 years then looking back at history may I offer one other comment on your third question I think I'm much less scientific than Carsten but I think there is a certain amount of evidence to suggest that science and technology are coming closer together one such piece of evidence is when they examine patent applications they look at what's technically called the prior art that is what has gone before and we see that scientific articles are cited increasingly as well as patents so they're looking at science as much as technology if you like as relevant to the new inventions that are being examined and that's well documented and this is a tendency I think that that explains the larger activity of universities and research institutions in patenting it's coming back to your table on the page that I'm very intrigued to find out both the companies that have filed how many have moved fast into the development phase other than what's the time gap between the invention and moving into something concrete and if you have figures on the R&D or how much is spent by these companies because that would be interesting how much is that is are they licensing this research are they making the patents in cooperation with others or are they taking the lead and secondly does your research include the huge R&D done by ministries of defense a lot of it which is classified especially in nanotechnology and robotics of what is being done in the industry with defense is that captured in the report well the R&D figures capture the defense expenditure on R&D that are that are collected another source by the way to in addition to those that we've mentioned that you can look at is Batel Institute which publishes a report on R&D each year and it does go into different industry sectors in more detail so yes that is but look on the commercialization process well we don't have and I think there's not a press conference in which you don't ask that question and which I don't apologize for the absence of the information but we don't have that information that data it would require you to analyze the accounts of every single company and those accounts in this regard are not necessarily immediately transparent because of course for an enterprise that's operating multinationally it has a complex structure many subsidiaries and it takes advantages of different fiscal regimes so it's difficult to get precise figures on this and it requires some work that we have not yet done yeah I mean I don't have much I mean as usually you ask the toughest questions just to highlight that of course you know patent data are very useful because you have unit record data you know what is being patented by whom and so on but of course you know patents are not a perfect proxy of innovation so to the extent that you know innovation never in some sense sees the day of light or is never published to the patent system you know it wouldn't show up in our figures we do in the various case studies also report some data on research and development we also report data on scientific publications which is another way of you know sort of looking at innovation output but on commercialization as the director general mentioned it's it's rather difficult no because this is linked to economic growth so the time gap is critical yes yes you would find qualitative discussion on this but you know we wouldn't be able to tell you for you know let's say the top patent filers in these fields of innovation what they're commercializing when they're commercializing it's coming back to Francis's example of Texas Instruments in 1962 but the whole thing took off in a big way in the 80s yeah yeah yes and there are other examples of this television is I can't give you on top of my head the exact dates but television was invented about 30 years before it was commercialized and another example is the jet engine that was also invented a long time before it was commercialized but that's not to say there's not a lot of incremental invention and innovation that follows the initial breakthrough foundation if you were an idea no well if we knew but that's the problem look there are all sorts of anecdotal evidence about the increase of industrial espionage because of the vast capacity technological capacity to store data now and and the vulnerability that that produces so we hear a lot about that of course but by definition we're not supposed to hear about espionage you know if it's successful we won't really know about it but it highlights a different area of intellectual property which is really trade secrecy and trade secrecy is on in the view of many becoming more important because of first of all the vulnerability and because secondly of knowledge sharing mechanisms such as global value chains because you can't have a global value chain without sharing a certain amount of information and so your exposure is increased and because thirdly of the mobility of people skilled resources who can take information with them and perhaps falsely because you have the the patent is the the core of the invention but there's a lot of information that surrounds it which can be very valuable but it's not absolutely essential for the patent application and this is certainly the case in some of the areas of the biosciences that rely on on vast amounts of data that they process and none of that is an invention the data but the data is valuable and has been collected and is tempting I was wondering are do you think it's would be beneficial for more countries to get involved in this and also when you're talking about commercialization do you think that you're talking about the television it took 30 years but today the world is better you know how quickly is it going now it seems like you know you have an innovation and that's commercialized tomorrow well on the first part I think it's a strategic question for a country you know so obviously we know broadly the linkages between technological progress let's say or innovation and economic growth then you know it's up to a country to devise its own particular strategy as to how it it matches its economic possibilities with that fact and where it's going to place itself and there are various different forms of strategy such as for example smart specialization you know where you might concentrate on one particular or several particular areas where you think you might have a comparative advantage so it's really a strategic question for economists and the government in each particular country on the second one I don't think I can make anything resembling a scientific comment on you know whether there is this acceleration as you suggest everything that we would you know think as laypersons would suggest that maybe there is this acceleration because you have so much activity in you know the innovation now and if it just went back a hundred years obviously it was a vastly different scene and many of the much of life is accelerated now so you would you would expect that but I can't give you a scientific explanation Karsten maybe we actually have a figure in the report that speaks to that on page 11 figure 3 and this draws on work that an economist named Diego Common at Harvard Business School has undertaken he and together with some other economists they've built a database of how major technological innovations have spread through the world and I suppose there's good news and bad news coming out of that the good news is exactly what you mentioned if you look at the average adoption lag that adoption lag is much shorter today than it was in the past so you look at you know steam and motor ships that were first adopted in the early 19th century it took more than a hundred years essentially for economies around the world on average to adopt that particular technology you look then at cell phones and the internet you know those technologies are adopted essentially within a few years after their first sort of commercial introduction now the more worrying news concerns the level of use of these technologies within those countries so what the second child on the right hand side shows you is the difference in penetration rates of these technologies relative to to high-income countries and there we see that the newer technologies you know are sort of less intensively used you know in in poorer economies that at first might seem surprising especially if one you know sees how widely cell phones and the internet have spread to developing countries but if you have a close look at the data it just turns out that these technologies are far more heavily used in developed countries so in a sense you know that is good news and bad news so technologies seem to seem to spread you know faster but their intensity of use you know the differences across countries you know seem to be on the increase and if you go back a very long time you know in support of what you say it took 4 000 years to move from hunter-gatherer to settled agriculture and urbanization in the fertile crescent so that process actually took about 4 000 years so we certainly seem to be a little bit quicker I think now well I think what you say in itself I think is quite interesting because you look at the three historical ones and we are really talking about you know the early 20th century here so it seems like the group of leading innovators hasn't changed much in the course of more than a hundred years and that also applies you know for essentially you know for the performance of economies you look at the top 10 economies in the middle of the 19th century you look at the top 10 economies in terms of GDP per capita today if I remember correctly I think there are only two economies that were able to break into the into the top 10 group which I believe are Singapore and Hong Kong so there seems to be a lot of persistence as far as sort of you know innovation goes but also as far as as economic success goes I would say listen I mean this is a big question and I think there's you know even the brightest economists working on this don't necessarily have a one line one line answer to that but I think it is the case that you know initial conditions matter I think you know the emergence of China which you know by historical standards is still a relatively new phenomenon I think is something that's really remarkable you know that's certainly not news to you given that you know we have presented a lot of patent statistics IP statistics on China on previous occasions that's why I would leave it you could also perhaps add as an example the Republic of Korea and I don't have the figures but if you go back to the early 60s you find an extremely one of the lowest per capita GDPs in the world yes and now of course it's in an vastly different position and technology has played a major part in that sir we're not only flat but also the poor of performance of the emerging economies in the last couple of yeah I mean I don't think I have a lot of intelligent things to say about this it is certainly the case you know that you know we broadly make this distinction between let's say those leading economies high income countries and one would add China to that and other low and middle income countries but even within that there's a lot of you know variation certainly you know countries such as brazils of Africa also india in some areas have you know centers of excellence especially on the scientific front you know if you look at for example their journal publications output in some cases it's it's quite impressive but you know in in in terms of levels it's still considerably below what you would find in you know in in the group of technological leaders it's also the case that certainly the more volatile history and you know that applies till the state of growth performance in these economies you know presents a challenge in sustainably funding innovation in these countries and you know that's certainly something that Brazil struggles with these days well only peripherally and we are quite explicit about this at the outset it is a really important topic you know that one one one you know certainly can't set aside and it was mainly for you know space reasons that you know we felt if we do it we have to give proper treatment to that and you know we probably would have easily you know increase the report in half now you know we certainly make the argument that the let's say replacement or redundancy of jobs in the long term is not necessarily a bad thing so if you for example look at the early days of you know unalock to telephony you know you had all these manual switching operators and whose job essentially become redundant the day you know direct dialing was invented and that in the long term is a good thing because it frees up labor in in the economy you know that essentially can be used productively in other areas of the economy but it is something that you know first of all creates hardship for people who lose their work it requires management and it is something you know that you know sometimes may take a take a generation and I think you know sort of dealing with all of this is an important challenge for policymakers and I think it's an important challenge because you know effectively managing that transition you know is you know is essentially a pre-condition for successfully reaping the growth benefits of new innovation. I would like to add a personal comment if I may to your question and I'll leave the report and you know emphasize that it's a very personal view and of course we're dealing with predictions and predictions are you know extremely risky but I would say that there that we should this is an what you your question is extremely profound question and an extremely profound effects may be seen may be seen in the future first of all because what we've seen in the 1990s you know in part because of of the trips agreement and it would rather not the trips agreement excuse me the doh the Uruguay round yeah the Uruguay round and in part because of globalization is that a lot of jobs in the low technology areas were exported offshore from developed countries and that worked to the advantage of developing countries now if robotics and other advanced manufacturing techniques sensors 3d printing and so on hold all the promise that is suggested then it may be that some manufacturing will be recaptured by developed countries and so the first effect in the longer term may be that a redistribution of what we have seen happening in respect of manufacturing in the course of the last 20 years or the course of the 1990s and 2000s so that is one possible scenario that may emerge from advanced manufacturing and there are certain other reasons to support that such as the view that innovation follows manufacturing and therefore it's important to retain manufacturing or to recapture manufacturing and the second there is a view that innovation follows manufacturing not all innovation but some innovation follows manufacturing and therefore it's important to retain manufacturing or to recapture it so that's a distributional effect that is possible possible out of advanced manufacturing technologies the other thing is the one that Carsten has been talking about which is that we may well find ourselves in a position in which work is a scarcer phenomenon and that again carries within it if that occurs the risk if you like or the challenge of a completely different way of looking at the way in which we organize ourselves as society Keynes wrote about this in a letter to his grandchildren in which he suggested that in 50 or 60 years time you know work would be much reduced as a phenomenon in society and maybe this will occur in the future so that's the other possibility that I think we need to reflect on in in the whole area of advanced manufacturing it's not just the redistribution the potential redistribution but also what happens in our own societies this is in other words the digitization of work