Grilliches' paradox or 'Ignorance about knowledge'

When I was invited to write a blog about Intellectual Property for Science|Business, I got quite excited. Not only am I an ardent tracker of the IP landscape, but the opportunity to build a knowledge network with the leading European producers and consumers of IP is unique and irresistible.

On the other hand, there is no lack of IP-related sites and blogs. So how can I create additional value? There are many possibilities, but one venue appears particularly promising: increase the level of knowledge about Intellectual Property activity.

In effect, this area is plagued by what I call the Griliches paradox. Zvi Grilliches, who died in 1999, was Professor of Economics at Harvard and the foremost authority on the measurements of quantitative changes in the economy. He noted that the share of economy measured with a degree of accuracy by official statistics fell from 50% to 30% between 1947 and 1990. And these weaknesses are most pronounced in the areas which are most dynamic and trend setting such as services or information technology. Griliches’ paradox is that in this age of “information revolution” and “knowledge economy,” measurement systems shed little light on activities where information and knowledge are generated.

This is very true for Intellectual Property. We all say that IP is one of the greatest assets of the Knowledge Economy. But how big is it? How quickly it is growing? Some information is available about the number of patents and R&D spending but it is sporadic and fragmentary. For instance, how much do we know about licensing revenues of academic institutions, the kind of information which would be extremely useful to Science|Business network members?  

There is some information about such revenues in the US and Canada. This is due to the pioneering work of the Association of University Technology Managers (AUTM), which regularly publishes AUTM licensing surveys for the US and Canada. According to the 2004 survey, US academic institutions generated a licensing income of $1.385 billion, which was more than four times the licence income generated 10 years earlier. Eighty percent of this income came from recurring royalties and 2% from cashed-in equity. and 18% from the sale of new licences. In 2004, US universities launched over 460 start-ups.

I may be missing something but I was unable to find any comparable information about EU. Would be it nice to have it? Maybe we could start by creating European AUTM (or does it already exist, hidden in the backrooms of Brussels or London?).