Innovation and International Trade in the World

31 de December de 2019 Alfredo Kleper Lavor

Innovation is the action or act of innovating, that is, modifying customs, models, legislations, products or processes. Renewal or create a novelty.

The concept of innovation is broad and can be used in all sectors, be it academic, business, environmental or economic. In this sense, the act of innovating means the need to create different ways or strategies, by the usual means, to achieve a certain goal. To innovate is to invent, whether ideas, processes, tools or services.

For Joseph Schumpeter (economist, 1883-1950), innovation is the process of creating the new and destroying what is becoming obsolete. It is the company’s ability to overcome perfect competition by establishing a temporary monopoly situation by creating a new market for its products.

Innovation and International Trade in the World

And where do we find the connection between Innovation and Export?

The more innovative a country is, the more products and services it can make available in the global marketplace, overcoming perfect competition and creating a temporary monopoly situation. The theory of economic growth also has an export cause, because economic growth only occurs as a result of productivity or export.

There is no magic. Countries only also have Economic Growth if they increase their Productivity and/or increase their Exports.

In the image above we can see the 10 countries that most filed patent applications for innovative products and services in 2018, among which the first 4 are USA (56,142 patents), China (53,345 patents), Japan (49,702 patents) and Germany (19,883 patents).

It is no coincidence that these same 4 countries with the most patent applications for innovative products and services were also the 4 most exporting countries on the planet in 2018!

Just to record the disparity and comparison, these are the patent application quantities for innovative products and services from the World, by WIPO – World Intellectual Properties Organization in 2018:

Who filled the most PCT patents applications in 2018

	Countries	Code	2018
1	United States of America	US	56013
2	China	CN	53345
3	Japan	JP	49706
4	Germany	DE	19753
5	Republic of Korea	KR	17014
6	France	FR	7921
7	United Kingdom	GB	5638
8	Switzerland	CH	4566
9	Sweden	SE	4163
10	Netherlands	NL	4137
11	Italy	IT	3330
12	Canada	CA	2420
13	India	IN	2012
14	Israel	IL	1898
15	Finland	FI	1834
16	Australia	AU	1827
17	Austria	AT	1475
18	Denmark	DK	1443
19	Spain	ES	1395
20	Turkey	TR	1323
21	Belgium	BE	1296
22	Russian Federation	RU	951
23	Singapore	SG	929
24	Norway	NO	766
25	Saudi Arabia	SA	663
26	Ireland	IE	622
27	Brazil	BR	617
28	Africa	R1	434
29	Luxembourg	LU	392
30	Poland	PL	335
31	South Africa	ZA	275
32	New Zealand	NZ	275
33	Mexico	MX	275
34	Liechtenstein	LI	263
35	Portugal	PT	250
36	Chile	CL	241
37	Panama	PA	184
38	Czech Republic	CZ	180
39	Iran	IR	176
40	Colombia	CO	160
41	Ukraine	UA	156
42	Hungary	HU	153
43	Malaysia	MY	143
44	Slovenia	SI	116
45	Greece	GR	115
46	Thailand	TH	102
47	Barbados	BB	96
48	Antigua and Barbuda	AG	96
49	United Arab Emirates	AE	92
50	Bulgaria	BG	60
51	Slovakia	SK	50
52	Iceland	IS	49
53	Estonia	EE	49
54	Morocco	MA	49
55	Malta	MT	45
56	Egypt	EG	44
57	Argentina	AR	42
58	Cyprus	CY	40
59	Croatia	HR	39
60	Lithuania	LT	37
61	Peru	PE	37
62	Romania	RO	32
63	Latvia	LV	31
64	Ecuador	EC	31
65	Belarus	BY	23
66	Viet Nam	VN	22
67	Monaco	MC	21
68	Serbia	RS	20
69	Philippines	PH	18
70	Kazakhstan	KZ	18
71	Sri Lanka	LK	18
72	Low-income	W4	17
73	Algeria	DZ	17
74	Qatar	QA	15
75	Azerbaijan	AZ	15
76	Oman	OM	14
77	Costa Rica	CR	13
78	Jordan	JO	13
79	Uruguay	UY	8
80	Kenya	KE	8
81	Montenegro	ME	8
82	Cuba	CU	7
83	Indonesia	ID	7
84	Tunisia	TN	7
85	Andorra	AD	7
86	Georgia	GE	6
87	Armenia	AM	6
89	Trinidad and Tobago	TT	6
90	Lebanon	LB	6
91	Sudan	SD	6
92	North Macedonia	MK	6
93	Kuwait	KW	6
94	Republic of Moldova	MD	5
95	Bahamas	BS	4
96	Bosnia and Herzegovina	BA	4
97	Mauritius	MU	4
98	Dominican Republic	DO	4
99	Senegal	SN	4
100	Saint Kitts and Nevis	KN	4
101	San Marino	SM	3
102	Namibia	NA	3
103	Lao People’s Democratic Republic	LA	3
104	Seychelles	SC	2
105	Democratic P. Republic of Korea	KP	2
106	Nigeria	NG	2
107	Uzbekistan	UZ	2
108	Mongolia	MN	2
109	Libya	LY	2
110	United Republic of Tanzania	TZ	2
111	Zambia	ZM	2
112	Syrian Arab Republic	SY	1
113	Belize	BZ	1
114	Zimbabwe	ZW	1
115	Guatemala	GT	1
116	Samoa	WS	1
117	Cameroon	CM	1
118	Bahrain	BH	1
119	Brunei Darussalam	BN	1
120	El Salvador	SV	1
121	Uganda	UG	1
122	Madagascar	MG	1
123	Yemen	YE	1
124	Nicaragua	NI	1
125	Democratic Republic of the Congo	CD	1
126	Niger	NE	1
127	Fiji	FJ	1
128	Rwanda	RW	1
129	Guyana	GY	1
130	Tajikistan	TJ	1
131	Venezuela	VE	0
132	Albania	AL	0
133	Saint Vincent and the Grenadines	VC	0
134	Pakistan	PK	0
135	Côte d’Ivoire	CI	0
136	Kyrgyzstan	KG	0
137	Jamaica	JM	0
138	Burundi	BI	0
139	Ghana	GH	0
140	Bangladesh	BD	0
141	Vanuatu	VU	0
142	Gabon	GA	0
143	Botswana	BW	0
144	Angola	AO	0
145	Marshall Islands	MH	0
146	Honduras	HN	0
147	Iraq	IQ	0
148	Liberia	LR	0
149	Eswatini	SZ	0
150	Dominica	DM	0
151	Togo	TG	0
152	Benin	BJ	0
153	Bolivia	BO	0
154	Congo	CG	0
155	Guinea	GN	0
156	Paraguay	PY	0
157	Sierra Leone	SL	0
158	Micronesia	FM	0
159	Grenada	GD	0
160	Equatorial Guinea	GQ	0
161	Saint Lucia	LC	0
162	Mozambique	MZ	0
163	Chad	TD	0
164	Burkina Faso	BF	0
165	Eritrea	ER	0
166	Ethiopia	ET	0
167	Haiti	HT	0
168	Cambodia	KH	0
169	Mali	ML	0
170	Myanmar	MM	0
171	Malawi	MW	0
172	Papua New Guinea	PG	0
173	Turkmenistan	TM	0
174	Tonga	TO	0

Innovation and Export in the World. It is important that the countries, especially the least developed countries, have to work harder to generate Programs and Projects to improve Innovation – and consequently improve their Productivity and Exports.

(Alfredo Kleper Lavor, economist)