3.3. Innovation

The positive performance of the Basque Country in innovation inputs (R&D expenditure) is not reflected in the output obtained (patents)

As regards the indicators which measure innovation performance, the one most commonly used to measure technological output is patents per million inhabitants, despite the limitations this entails (for example, not everything that is patented is commercially exploited or takes the form of a true innovation.) As shown in Table 1, the Basque Country’s position with regard to this indicator stands out positively when compared to the Spanish autonomous communities and cities, but it is in an intermediate position as regards the European regions as a whole, and at the bottom of the ranking among reference regions. As the trend graph shows, the number of patents per capita is a considerable distance from Germany’s value, as well as the EU-28 average and the reference regions. This is even the case when, as we can see in Graph 5, R&D expenditure (as a percentage of GDP) for the 2012–2015 period was above the average for European regions. In other words, although the Basque Country is performing well in terms of innovation inputs (R&D expenditure), the output obtained (patents) is not as good. As we can see in this graph, the output per unit of input (R&D expenditure) is not only below the EU-28 average, but it is also less than the average for Spanish regions (as it is some distance from the latter in the line of best fit between R&D expenditure and patents).

Graph 5. PCT patents per million inhabitants and R&D expenditure (% GDP) (average 2012–2015).
PCT patents per million inhabitants and R&D expenditure (% GDP) (average 2012–2015)
Source: Eurostat and OECD REGPAT. Compiled by authors.
NB: The blue dashed lines indicate the average values for all EU regions. There are 11 regions with over 300 PCT patents per million inhabitants and/or R&D expenditure greater than 4% of GDP.

The community design indicator does not perform well, however two indicators that do perform well are the community trademark applications and sales from products that are new

Innovation output is also measured using the applications for registered trademarks and community designs indicators, which may reflect non-technological innovations. The Basque Country particularly stands out in the applications for registered trademarks indicator when compared to both the European regions as a whole and the reference regions (although it experienced a decline in these rankings in the last year). For this indicator, it comes in above the EU-28 average, but below Germany and the Spanish average. As regards designs, the Basque Country is not as well positioned, and despite having gained positions in the last year, the value is quite a bit lower than that for the other territories under consideration.

Another aspect used to measure innovation performance is the percentage of sales that come from products that are new to the firm or the market, as this makes it possible to analyse to what extent innovation translates into better sales. It supplements the previous indicators, which can be affected by differences with regard to regulation or traditional practice in the area of intellectual property protection. The data for this sales indicator come from the last two editions of the Regional Innovation Scoreboard, which only provides normalised data and has an even longer delay than the previous data, as they are based on the Community Innovation Survey for 2014 (in the RIS for 2017), and 2012 in the edition for the previous year. Even so, they indicate a strong performance, with the Basque Country in a very good position in all three rankings, moving up compared to its position two years earlier. However, it must be borne in mind that these sales do not only include totally new products, but can also reflect the dissemination of technology among firms.

  1. Patent Cooperation Treaty