State of innovation Thomson Reuters 2016

DISRUPTIVE, GAME-CHANGING

INNOVATION

2016 State of Innovation

REUTERS

“ Valeo’s ambition is to bring the most innovative technologies into the cars that are driven every day by hundreds of millions of people.

One definition perfectly describes our approach: innovation as an invention that has found a market…In a world that is more and more open, we promote an innovation of the widest possible scope, including partnerships with public research bodies, academic organizations, customers, and suppliers.”

—Jacques Aschenbroich, CEO, Valeo

TABLE OF CONTENTS

Introduction .................................................................................................................................... 4

Observations & Findings ............................................................................................................ 5-6

Aerospace & Defense ...........................7-12

Automotive .........................................13-18

Biotechnology....................................19-24

Cosmetics & Wellbeing ....................25-30

Food, Beverage & Tobacco ............... 31-36

Home Appliances ............................. 37-42

Information Technology ...................43-48

Medical Devices ................................49-54

Oil & Gas .......................................... 55-60

Pharmaceuticals ...............................61-66

Semiconductors ................................67-72

Telecommunications .........................73-78

2016 State of Innovation stateofinnovation.com Introduction 4

DISRUPTIVE INNOVATIONS LEAD DOUBLE-DIGIT GROWTH

It takes a village to do a lot of things these days, and innovation is no exception.

2015 was the year of many innovative firsts and it took lots of villages to get there. In fact, innovation over the last year was one of the most active in history with double-digit growth of 13.7 percent. This jump was the result of lots of villages working to find better ways of doing things and breakthrough science, technology and medicine. It was the year of Collabovation.

Defining the trendCollabovation is a term used to represent the elegant convergence of collaboration, innovation, cultivation, cross-pollination and calibration, swirled into the powerful process of bringing inventions to life with strategic partners and suppliers. Coming up with a novel idea can be a feat in itself, but actually bringing one to market is an entirely different game. The Lifecycle of Innovation, from discovery and protection to commercialization and launch, involves everything from research and prototyping to intellectual-property protection and product monetization. In today’s fast-paced world of science, technology and medicine, where disruption and multi-tiered competition are the norm, it takes collabovation to truly succeed.

Breaking throughThink of the many breakthroughs that happened over the last year. It was the first time astronauts from different countries embarked on the longest human space mission by two men: American Scott Kelly and Russian Mikhail Kornienko, occupying the International Space Station for nearly a year. It was the first time self-driving cars were tested on public roadways in certain jurisdictions around the world. And, the first time a biosimilar drug was approved in the US, while certain other drugs were being tested on 3D printers. It was also the year when the Internet of Things (IoT) garnered mass appeal, allowing homeowners to manage their dwellings with omnipotent-like intelligence, while cloud storage became mainstream.

These firsts were possible because of the massive investment in innovation–in collabovation–made by organizations around the world. Overall, global innovation activity saw a notable uptick over the last year, with Medical Devices, Home Appliances and Aerospace leading the charge. These sectors all experienced year-over-year, double-digit growth, as did Information Technology and Oil & Gas. In fact, every sector was in the black outside one: Biotechnology, which decreased slightly given a leveling off in that industry.

Moving the needleCollabovation is happening between corporations and universities. Government agencies and research centers. Start-ups and bellwethers. Physical and mental boundaries are being lifted. Like-minded, similar-goaled organizations are finding each other. A web of information is aligning partners and best practices in an effort to collaboratively innovate.

This report showcases some of these instances, as well as uncovers key innovation trends for 2016. Examination of global patent activity provides a glimpse into what’s hot, what’s not, what’s coming next, who leads and which regions are the most active.

Welcome to the 2016 State of Innovation. We invite you to ponder these pages and consider new partners with whom to collabovate.

Vincent J. Caraher, President, Thomson Reuters IP & Science

http://www.stateofinnovation.com

2016 State of Innovation stateofinnovation.com Observations & Findings 5

OBSERVATIONS & FINDINGS

Up, up and away Global innovation activity experienced gains across 11 of the 12 sectors throughout 2015, with the largest leaders being Medical Devices, Home Appliances and Aerospace & Defense. This rebound follows prior year declines for Medical Devices and Aerospace, which had year-over-year innovation drops of 5 percent and 1 percent, respectively, while Home Appliances was flat. Semiconductor activity also fell in 2014, but saw a bump of 3 percent in 2015.

The longer-term view, covering the seven years from 2009–2015 (inclusive), highlights just how robust and active innovators have been. The combined output across all 12 technology areas was on a consistent upward climb (Figure 1). The largest overall increase for the extended period was in Food, Beverage & Tobacco, which skyrocketed 128.25 percent. Aerospace & Defense and Home Appliances also experienced triple-digit jumps, as shown in Figure 2.

Sign of the TimesLooking across this seven-year span, it’s clear the figures reflect a sign of the times. The world was rebounding from the greatest economic crisis in the last 75 years, while technology had catapulted the Digital Era into the next stratosphere, creating opportunities heretofore unknown.

This longer-view shift is indicative of how our world has been evolving. For example, the production of disease-resistant crops and genetically modified foods, aimed at ensuring an ample food supply for a world population projected to hit 10 billion later this century. The development of appliances that communicate with one another and reflect their owners’ preferences; the actualization of the IoT. The quest to explore space, understand the universe beyond our galaxy and find new frontiers for future humans—as well as equip defense teams for wars that require continued military investment.

Research & InnovationThe relationship between research and innovation is well understood. Analysis shows that scientific and scholarly research typically precedes discovery and the protection of innovation rights by a few years. It’s therefore prudent to look at what topics, institutions and regions lead globally in research to get an even richer understanding of what the future holds.

A look across the last decade and research related to the 12 technology areas, as contained in the Web of ScienceTM,

1,000,000

1,500,000

2,000,000

2,500,000

2015201420132012201120102009

0.00%

30.00%

60.00%

90.00%

120.00%

150.00%

All

Tech

nolo

gy

Tele

com

mun

icat

ions

Sem

icon

duct

ors

Phar

mac

eutic

als

Oil

& G

as

Med

ical

Dev

ices

Food

, Bev

erag

e &

Tob

acco

Hom

e A

pplia

nces

Cosm

etic

s &

Wel

lbei

ng

Info

rmat

ion

Tech

nolo

gy

Biot

echn

olog

y

Aut

omot

ive

Aer

ospa

ce

Figure 1: Global Innovation Output Across 12 Sectors (2009–2015)

Figure 2: Percentage Growth in Innovation Activity (2009–2015)

Source: Derwent World Patents Index and Thomson Innovation

Source: Derwent World Patents Index


2016 State of Innovation stateofinnovation.com Observations & Findings 6

shows that output related to these topics has returned to its pre-economic-crisis levels, as shown in Figure 3. As the tools for finding prior research become even more refined, researchers collaborate more with others and pure or basic research investments are sometimes married with innovation, causing the scholarly activity to even out.

Innovation Drives the FutureInnovation is a driver of economic success and growth. Companies and countries that consistently invest in innovation by prioritizing R&D and allocating funds and resources for this activity are proven to be more successful than those that don’t.

The Thomson Reuters Top 100 Global Innovators are an example of this. The honorees of this designation, based on a comprehensive, patent-based methodology, have consistently outperformed the S&P 500 and/or MSCI World Index in terms of market-cap weighted R&D investment, annual revenue and employment. And, regions like the UK, which has fewer R&D and innovation incentives compared to Germany and Japan, has not made the Top 100 Global Innovators list in several years.

As the process of innovation becomes more collaborative in our technologically driven world, it’s hard to imagine the trajectory of activity changing in the near future.

Innovation drives the future. And the future is ours. Innovative disruptions are a hallmark of the Digital Era. With the proper balance of discovery, protection and commercialization, these numbers will continue to grow and our world will continue to evolve before our eyes.

% Industry 2015 Volume

2014 Volume

% Change

5% Aerospace & Defense 71,633 62,162 15%

12% Automotive 166,867 153,872 8%

3% Biotechnology 41,624 42,584 -2%

1% Cosmetics & Well Being 11,307 11,017 3%

2% Food, Beverage & Tobacco

26,605 26,333 1%

6% Home Appliances 86,301 71,278 21%

31% Information Technology 429,806 380,325 13%

9% Medical Devices 118,658 93,462 27%

2% Oil & Gas 27,556 24,158 14%

9% Pharmaceuticals 116,286 111,479 4%

8% Semiconductors 114,488 110,761 3%

12% Telecommunications 166,601 161,739 3%


Overall View of Innovation

250,000

300,000

350,000

400,000

20152014201320122011201020092008200720062005

Figure 3: Scientific Research Output Across 12 Technology Areas (2005–2015)

Source: Web of Science

12%

3%

31%

1%

6%

2%

9%

9%

8%

2%

12%5%

30%


2016 State of Innovation stateofinnovation.com Aerospace & Defense 7

AEROSPACE & DEFENSE

From dreamliners to space stations to unmanned military vehicles, the window on our world is changing.

REUTERS/LUCAS JACKSON



COLONIZING THE MILKY WAY

Matt Damon gave us a peek at what life may be like for the first settlers on Mars in the movie The Martian. As far-fetched as the idea of living on another planet may seem, it’s now projected that the first humans could inhabit Mars within the next 25 years.1 Such a feat is going to require an immense amount of innovation and collaboration as earthlings look to colonize Mars, and potentially other parts of our galaxy.

In fact, it is reported that the US National Aeronautics and Space Administration (NASA) will spend $18.5 billion on its 2016 space exploration plan.2 Its goals this year include increasing utilization of the International Space Station (ISS) science and technology hardware by 70 percent and launching 13 science and cargo missions, among many other things.

In the race to colonize space, partnerships abound. There are many public/private sector arrangements underway, related to the Collabovation theme mentioned earlier. The European Space Agency (ESA) recently launched

an initiative to find private sector partners with which to explore space in its “Space Exploration as a Driver for Growth and Competitiveness: Opportunities for the Private Sector,” where it states: “ESA is looking into novel ways to advance its strategic goals for space exploration, based on strategic partnerships with the private sector, including entities from the space and nonspace industry.3 ”

Similarly, articles about NASA partnering with Boeing, Elon Musk’s SpaceX and others reaffirm the commitment and passion to make history and be the first to get to Mars, or other parts of the galaxy and universe.

“ The recent ‘Martian’ movie starring Matt Damon is science-fiction in 2016, but with NASA and ESA actively collaborating with private sector partners such as Boeing and SpaceX to provide innovative solutions for the financing and execution of space exploration missions, experts predict that human settlements will be operational on Mars within 25 years.

Such a highly complex project will require massive innovation across a wide range of technologies, not just ‘spaceflight’ aspects of aerospace. To sustain and protect human life in extremely hostile alien environments will involve new solutions for food and water processing, power generation, communications, healthcare and more, so partners from ‘non-space’ industry sectors will also be major contributors and this will in turn drive further innovation for Earth-based applications.” —George Jack, Engineering Expert, Thomson Reuters

1 http://www.techinsider.io/buzz-aldrin-mars-plan-2016-4 2 https://www.nasa.gov/sites/default/files/files/NASA_FY2016_Summary_Brief_corrected.pdf3 http://esamultimedia.esa.int/docs/hso/ESA_CFI__Space_Exploration_as_a_Driver_for_Growth_and_Competitiveness.pdf


http://www.techinsider.io/buzz-aldrin-mars-plan-2016-4

https://www.nasa.gov/sites/default/files/files/NASA_FY2016_Summary_Brief_corrected.pdf

http://esamultimedia.esa.int/docs/hso/ESA_CFI__Space_Exploration_as_a_Driver_for_Growth_and_Competitiveness.pdf


AEROSPACE & DEFENSE OVERVIEW

% Subsectors 2015 2014 % Change

39% Production Techniques 22,392 18,823 19%

23% Advanced Materials 13,002 12,233 6%

13% Structures & Systems 7,468 7,136 5%

12% Propulsion Plants 6,760 5,894 15%

11% Instrumentation 6,502 6,270 4%

2% Space Vehicles & Satellite Technologies

1,424 1,156 23%


Top 10 Global Innovators–Aerospace & Defense (2015)Company Country # Inventions

United Technologies Corp US 716

State Grid Corp of China China 715

Airbus Operations France 620

Jiangxi Hongdu Aviation Ind Group Co Ltd China 617

Boeing US 531

General Electric US 424

LG S Korea 392

Siemens Germany 387

Toyota Japan 360

Hyundai S Korea 334


Top 10 Space Technology Innovators–Asia (2011-2015)Company Country # Inventions

Harbin Institute of Technology China 186

Korea Aerospace Research Institute S Korea 163

China Academy Launch Vehicle Technology China 157

Beijing Control Engineering Research Institute China 108

University Beijing Aeronautics & Astronauts China 93

Shanghai Satellite Engineering Institute China 87

Beijing Institute Spacecraft Environmental Engineering China 77

Shanghai Aerospace System Engineering Research Institute China 72

Mitsubishi Electric Japan 69

Beijing Space Aerocraft Collectivity China 69


11%2%

12%

23%

13%

39%



Top 10 Space Technology Innovators–Europe (2011-2015)Company Country # Inventions

Airbus France 225

Energiya Rocket Russia 113

Information Satellite Systems Reshetnev Russia 80

Thales France 73

Center Nat Etud Spatiales France 42

Mechanical Engineering Research Institute Russia 61

Cosmic Scientific Production Centre Russia 41

Deut Zent Luft & Raumfahrt Germany 32

Snecma France 24

Moscow Mars Experimental Construction Bureau Russia 19


Top 10 Space Technology Innovators–North America (2011-2015)Company Country # Inventions

Boeing US 221

Honeywell US 41

Lockheed Martin US 33

Raytheon US 31

NASA US National Aerospace & Space US 29

Space Systems/Loral US 21

US Navy US 16

Hamilton Sundstrand US 15

Emcore Solar Power US 14

Qualcomm US 12


Most Influential Scientific-Research Institutions in Aerospace (2005-2015)Institution Country # of Papers (WoS) Relative Citation Impact*

University of Michigan System US 468 1.95

United States Department of Energy US 372 1.43

Delft University of Technology Netherlands 414 1.33

University of Texas Austin US 333 1.32

Centre National de la Recherche Scientifique (CNRS) France 551 1.25

Goddard Space Flight Center US 465 1.22

University of Florida US 312 1.21

US Air Force Research Laboratory US 512 1.19

Pennsylvania State University US 403 1.18

Pennsylvania Commonwealth System of Higher Education US 445 1.18

Source: Web of Science * Citation impact normalized against average for field and year of publication (n = 1.00)



Summary Innovation activity over the last year reflects man’s quest to conquer new frontiers, as well as push the boundaries of our daily flight expectations, with faster, larger and more frill-equipped airplanes than ever before.

The Aerospace & Defense sector saw a significant jump of 15 percent over prior year activity, with the largest jumps occurring in Space Vehicles & Satellite Technologies (23 percent), followed by Production Techniques (19 percent) and Propulsion Plants (15 percent). There’s no denying the race is on to find a sustainable way for humans to inhabit space, as part of global strategies to handle the exploding human population and ill effects of climate change on earth.

The international space race is just that, international. The top 10 innovators in this sector hail from the United States, China, France, South Korea, Germany and Japan. And, they include a mix of expected and unexpected companies, including United Technologies Corp., Airbus and Boeing as well as General Electric, LG Electronics and Toyota, respectively.

The US leads in the impact of its academic research in aerospace, with 80 percent of the top 10 institutions coming from that country. European organizations take the two remaining top 10 spots, while Asian institutions are notably absent from those with impactful contributions.

“ [Our most innovative asset is] the shared belief that our products are useful to society, and that we can help make the world a better place. For example, people all over the world want to continue to “go places”, and that will only be possible if we continue to reduce emissions, a very timely challenge…”

—Pierre Fabre, Senior Executive Vice President, Research & Technology, Innovation Safran


2016 State of Innovation stateofinnovation.com Aerospace & Defense 12REUTERS/MAX ROSSI


2016 State of Innovation stateofinnovation.com Automotive 13REUTERS/THOMAS PETER

AUTOMOTIVE

As automobiles become more advanced computers, what’s to become of the pastime of taking a 4-cylinder

combustion engine out for a Sunday drive?


2016 State of Innovation stateofinnovation.com Automotive 14

ARTIFICIAL INTELLIGENCE ON WHEELS

Over the last year, cars have evolved from being some of the most sophisticated computers on wheels to being advanced artificial-intelligence transportation chariots. Not only do today’s automobiles give drivers guidance when backing up, adjust to lane creep and intelligently adapt to weather conditions, they can also identify the mood and, coming soon, consumption habits of the driver based on steering-wheel sensors. This is all in addition to the vehicle’s already amazing ability to operate itself independently.

The International Consumer Electronics Show (CES) in Las Vegas, Nevada, US, featured more automobile exhibitors than ever before this year, which brought the show organizers to create a “Vehicle Intelligence Marketplace” for the first time.4 Such rapid automotive advancement is the result of thousands of hours of research, development, experimentation and innovation by auto manufacturers and their partners around the world.

Auto-collabovation is alive and well. Daily news headlines tout the latest partnerships in this space. For example, Renault and ARZA, in order to bring the electric vehicle market to Canadian masses5; Ford and Spotify, to enhance the musical experience of FordPass customers; and organizations like the Open Automotive Alliance (OAA), which aims to make automotive technology safer, more seamless and more intuitive.6

In today’s world, the realities of artificial intelligence stretch far beyond the reach of IBM’s Watson. We must start to think of and see our vehicles as the technological masters they are.

“ Increased partnership between traditional vehicle manufacturers and information/technology companies is already changing autonomous vehicles into advanced artificial-intelligence transportation chariots that can continually adapt to environmental conditions and driver ‘likes’. In today’s world, the realities of artificial intelligence stretch far beyond the reach of IBM’s Watson. We must start to think of and see our cars for the technological masters they are.” —Kevin Chapman, Lead Engineering Expert, Thomson Reuters

4 http://www.ces.tech/News/Press-Releases/CES-Press-Release.aspx?NodeID=ebcec984-2cf5-49ad-b7dc-f181cbf49932 5 http://www.automotiveworld.com/news-releases/renault-azra-invests-40-million-canadian-transport-electrification/6 http://www.openautoalliance.net/#about


http://www.ces.tech/News/Press-Releases/CES-Press-Release.aspx?NodeID=ebcec984-2cf5-49ad-b7dc-f181cbf49932

http://www.automotiveworld.com/news-releases/renault-azra-invests-40-million-canadian-transport-electrification/


http://www.openautoalliance.net/#about


AUTOMOTIVE OVERVIEW


21% Alternative Powered Vehicles 37,844 32,973 15%

11% Navigation Systems 19,753 18,538 7%

11% Safety 18,551 18,893 -2%

11% Transmission 20,175 18,484 9%

10% Seats, Seatbelts and Airbags 18,165 13,596 34%

7% Suspension Systems 12,827 11,003 17%

6% Pollution Control 10,114 9,677 5%

6% Steering Systems 10,841 11,599 -7%

5% Engine Design and Systems 7,845 7,334 7%

5% Security Systems 8,627 8,360 3%

4% Braking Systems 7,654 6,831 12%

3% Entertainment Systems 4,659 4,267 9%


Top 10 Global Innovators–Automotive (2015)Company Country # Inventions

Toyota Japan 4,214

Hyundai S Korea 2,469

Bosch Germany 2,390

Denso Japan 2,169

Honda Japan 2,039

Ford US 1,837

Daimler Germany 1,575

GM US 1,435

Beiqi Foton China 1,223

Nissan Japan 1,188

Sources: Derwent World Patents Index

Top 10 Alternative-Powered Vehicle Innovators–Asia (2011-2015)Company Country # Inventions

Toyota Japan 9,807

Hyundai S Korea 2,827

Honda Japan 2,732

Nissan Japan 2,633

Denso Japan 2,591

Samsung S Korea 2,515

LG S Korea 2,051

Panasonic Japan 1,970

Toyoda Japan 1,634

Sumitomo Electric Japan 1,492Source: Derwent World Patents Index

21%

11%

11%

11%

10%

7%

6%

6%

5%

5%4% 3%

30%



Top 10 Alternative-Powered Vehicle Innovators–Europe (2011-2015)Company Country # Inventions

Bosch Germany 3057

Daimler Germany 1705

Peugeot Citroen France 709

BMW Germany 637

Siemens Germany 624

Renault France 580

Volkswagen Germany 560

Audi Germany 477

Valeo France 411

Continental Germany 386


Top 10 Alternative-Powered Vehicle Innovators–North America (2011-2015)Company Country # Inventions

General Motors (GM) US 1614

Ford US 1517


Caterpillar US 168

Johnson Controls Technology US 156

Tesla Motors US 149

DuPont US 117

Remy Technologies US 109

Qualcomm US 88

IBM US 83


Most Prolific Scientific Research Institutions in Automotive (2005–2015)Institution Country # of Papers (WoS)

University of Michigan US 292

Ford Motor Company US 209

Polytechnic University of Turin Italy 187

Technical University of Munich Germany 173

Shanghai Jiao Tong University China 161

Indian Institute of Technology System India 158

Ohio State University US 151

RWTH Aachen Germany 135

Chalmers University of Technology Sweden 134

Seoul National University S Korea 131




SummaryAutomotive innovation accelerated by 8 percent from year-end 2014 to year-end 2015. All but two of the 12 subsectors jumped up, with the largest gains in Seats, Seatbelts & Airbags (34 percent) followed by Suspension Systems (17 percent) and Alternative Powered Vehicles (15 percent), respectively.

Asia continues to dominate the field overall with 60 percent of the Top 10 headquartered there. Japan’s Toyota takes the top spot again, followed by the same top-five-priority-order of last year: Hyundai (South Korea), Bosch (Germany), Denso (Japan) and Honda (Japan).

China joined the top 10 ranks for the first time, coming in ninth overall with Beiqi Foton, the country’s largest truck manufacturer. This is despite recent news of the company’s sales down 15.3 percent in March 2016 over the same period one year earlier.7

The US, Germany and Japan round out the bottom half of the Top 10 with Ford (US), Daimler (Germany), GM (US) and Nissan (Japan) taking sixth, seventh, eighth and tenth places, respectively.

In terms of alternative-powered vehicle innovation, Japan’s Toyota is in a category almost unto itself with nearly 10,000 unique inventions in that area alone last year. The next closest competitor in that space is Germany’s Bosch, with just over 3,000 unique inventions.

Germany and France are the only two countries in Europe in the top 10 for Alternative-Powered Vehicles, with Germany taking seven of the 10 spots. The US occupied all of the top 10 in North America, with GM and Ford pulling into the lead.

The most prolific automotive research institutions have a more diverse global footprint, representing the US, Italy, Germany, China, India, Sweden and South Korea. Nine of the top 10 research institutions doing work in this space are the same as the prior year—the newcomer being Chalmers University of Technology in Sweden.

“ Although driverless vehicles won’t be ruling the roads in 2016, data shows that they will likely become a reality in the years to come. Our fascination with this emergent technology continues to abound. There was a time when it was difficult to imagine the ability to get from one point to another in a vehicle without being completely alert and in control of the automobile. But if we’ve learned anything in the 21st century, it’s that technology seems to be boundless, as long as you have the right collaborators at the helm.” —Vin Caraher, President, Thomson Reuters IP & Science

7 http://www.reuters.com/article/idUSL3N17A3AE


http://www.reuters.com/article/idUSL3N17A3AE

2016 State of Innovation stateofinnovation.com Automotive 18REUTERS/TIM WIMBORNE


2016 State of Innovation stateofinnovation.com Biotechnology 19

BIOTECHNOLOGY

The sequencing of the human genome is leading to breakthroughs in and beyond medical treatments.

What doesn’t biotech have its hand in today?



GENETICALLY MODIFIED LIFE

Biotechnology experienced a large number of firsts over the last year.

One of the most significant, and potentially most life transforming, was that of the CRISPR (clustered regularly interspaced short palindromic repeats) initiative and the editing of a human-embryo germline. CRISPR “interference” involved making targeted modifications to segments of DNA to alter its immunity. Such work has implications not only for humans, but also for food crops and other plants and animals.

Another set of firsts involved a series of bio-based approvals by the US Food and Drug Administration (FDA), including the first biospecific antibody: Amgen’s Blincyto; the first biosimilar drug: Novartis’ Zarxio; and the first biotech food animal: Aquabounty Technologies Inc.’s salmon, which grows faster than farmed fish.

There’s no disputing that the advent of biotechnology has created an experimental sandbox for everything from genetically manipulating DNA to modifying the composition of plants and printing drugs using bio-organisms. While this is cutting-edge work, the pace of innovation fell slightly short of where it was a year earlier.

“ Governments and payers are counting on biosimilars to revolutionize health care by reducing the cost of important biologics and increasing access to life-saving drugs. For that to happen, the follow-on biologics (FOBs) will have to deliver the power of the reference drugs at a price financially strapped countries can afford and gain the confidence of the marketplace.” —Mari Serebrov, Regulatory Editor, BioWorld



BIOTECHNOLOGY OVERVIEW


70% General biotechnology 30,197 29,374 3%

13% Diagnosis of diseases 5,614 6,984 -20%

10% Cancer treatment 4,412 4,855 -9%

5% Genetically modified crops 1,969 2,153 -9%

2% Drug discovery 824 951 -13%


Top 10 Global Biotechnology Innovators (2015) Company Country # Inventions

DuPont US 407

University of Jiangnan China 287

Monsanto US 229

Roche Switzerland 203

University of Zhejiang China 200

Rural Development Administration S Korea 191

University of California US 184

Centre National de la Recherche Scientifique (CNRS) France 166

Lanzhou Veterinary Res Inst China Agric China 165

Institut National de la Santé et de la Recherche Médicale (INSERM) France 160


Top 10 Biotech-In-Cancer Innovators–Asia (2011-2015) Company Country # Inventions

Samsung S Korea 104

University Fudan China 103


University Yonsei S Korea 77

Agency for Science Technology & Research, A*STAR Singapore 74

Korea Research Institute of Bioscience & Biotechnology S Korea 71

University Shanghai Jiaotong China 71

Peking University China 69

Suzhou Puluoda Biological Technology Co China 68

Osaka University Japan 65


70%

13%

10%

5% 2%

30%



Top 10 Biotech-In-Cancer Innovators–Europe (2011-2015)Company Country # Inventions


Institut National de la Santé et de la Recherche Médicale (INSERM) France 244

CNRS France 195

Novartis Switzerland 161

Sanofi France 136

UCL Business UK 66

Glaxo Group UK 65

Deutsches Krebsforschungszentrum Germany 59

Bayer Pharmaceutical Germany 56

Yeda Research & Development Company Israel 48


Top 10 Biotech-In-Cancer Innovators–North America (2011-2015)Company Country # Inventions

Genentech US 266


US Department of Health US 186

University of Texas System US 170

John Hopkins University US 140

Abbvie US 134

Dana Farber Cancer Institute US 127

General Hospital US 116

Harvard US 111

University of Pennsylvania US 109


Most Influential Scientific Research Institutions In Biotech (2005-2015)Institution Country # of Papers (WoS) Category Normalized Citation Impact

Broad Institute US 485 7.43

European Molecular Biology Lab Germany 801 4.46

Massachusetts Institute of Technology US 1,556 4.25

Wellcome Trust Sanger Institute UK 755 4.11

Howard Hughes Medical Institute US 913 4.10

Memorial Sloan Kettering Cancer Center US 375 3.26

Harvard University US 3,288 3.07

Lawrence Berkeley National Lab US 623 3.03

Dana-Farber Cancer Institute US 425 2.90

VA Boston Healthcare System US 594 2.89




SummaryBiotech was the only technology area of the 12 studied that decreased its year-over-year innovation output, experiencing a 2 percent decline over 2014. This is after having had a 7 percent overall increase from 2013. And all but one of the subsectors, General Biotechnology, declined from the earlier period, with the steepest drops in the Diagnosis of Diseases (20 percent) and Drug Discovery (13 percent).

China, France, Germany, South Korea and the US lead the world in biotech innovation. China and the US each have three of the top 10 spots, followed by France with two, while Germany and South Korea split the remaining two.

Biotechers are clear collabovators. Three of the top 10 global biotech innovators are universities and seven of the top 10 are either a university or research center. No other sector has this mix in its top 10. The trend continues beyond the global top 10 to regional sub-sector leaders in cancer-treatment innovation as well, which comprises a mix of private and public institutions.

The US dominates biotech scientific-and-scholarly research output with 80 percent of the top 10. The remaining two institutions are from Europe, one of which is headquartered in the UK and the other is in Germany. Once again the Broad Institute takes the lead spot with the most impactful research, whereas MIT was bumped from second to third place by the European Molecular Biology Lab.

It appears that Biotech has leveled off somewhat, but it remains to be seen whether this sector will pull ahead again in the future. The technologies are still in early stages and the players are still coming into their own. One thing is certain, the industry is one to watch as the output of its activity is sure to have an immense impact on all life: human, plant, animal, aquatic and more.

“ Collaboration is critical to igniting innovation; we work closely with our customers, and with each other. Our spirit of collaboration extends to our 46 technology platforms, which range from adhesives and abrasives, to ceramics and light management. We leverage those technologies across all our businesses and subsidiaries to create unique and relevant products for customers.” —Inge Thulin, Chairman, President & CEO, 3M


2016 State of Innovation stateofinnovation.com Cosmetics & Wellbeing 25

COSMETICS & WELLBEING

Computers aren’t the only things getting smarter—your personal care products are getting to know you, too.

REUTERS/RAFAEL MARCHANTE



SOCIAL MEDIA SPURS COSMETICS SECTOR

We live in the era of here-and-now. From Instagram and OoVoo to Snapchat and Vine, social media and other outlets set new beauty standards with images of the Kardashians, Beyonce and Taylor Swift leading the way. Selfies and facetime show us daily where we need to primp, plump and perfect, spurring today’s cosmetic-conscious fad.

The American Society of Plastic Surgeons recently reported there were 6.7 million Botox procedures done in 2015, 1 percent more than the prior year, as well as 27.5 thousand lip-augmentation surgeries (a 48 percent increase from 2000) and 12.7 thousand cheek-implant procedures (up 21 percent

from 2000)—and this just starts to scratch the surface of the litany of possible cosmetic surgeries available.8

Bigger is better in today’s beauty-bingeing world, and cosmetic innovations are making it all possible.

“ Fuelled by the immediacy and intense magnifying focus of social media images, being ‘close-up ready’ has never been more desirable nor more demanding. Consumers are better informed than ever before and have high expectations: the distinction between cosmetics and pharmaceuticals becomes ever more blurred year on year and high-tech delivery formulations become the norm.

The instant worldwide exposure of new products and technology has brought major new players into the market, particularly from the innovative Asian beauty sector. Maybe the emergence of companies traditionally less known for cosmetics and personal care shouldn’t be any surprise, as modern high performance beauty products incorporate cutting-edge pigment formulations, reflective microparticles and polymers for an Insta-perfect finish.” —Peta Leggatt, DWPI Content Specialist-Pharmaceuticals, Thomson Reuters

8 http://www.plasticsurgery.org/Documents/news-resources/statistics/2015-statistics/2015-plastic-surgery-statistics-report.pdf



COSMETICS & WELLBEING OVERVIEW


41% Skin 6,063 5,407 12%

38% Make-up 5,597 5,722 -2%

17% Hair 2,522 2,614 -4%

2% Perfume 289 342 -15%

2% Antiperspirant 264 274 -4%


Top 10 Global Innovators–Cosmetics & Well Being (2015)Company Country # Inventions

LG Household & Healthcare S Korea 315

L'Oreal France 314

Kao Japan 214

Henkel Germany 154

P&G US 144

AmorePacific S Korea 125

Aesthetic Beijing Technology Co China 87

Unilever Netherlands / UK 75

Beiersdorf Germany 73

Kose Japan 70


Top 10 Make-Up Innovators–Asia (2011-2015)Company Country # Inventions

KAO Japan 776

AmorePacific S Korea 534

LG S Korea 397

Shiseido Japan 356

Kose Japan 307

Pola Chem Japan 178

Lion Japan 144

Nippon Menard Keshohin Japan 142

Nippon Oil & Fats Japan 110

Fujifilm Japan 91


41%

38%

17%

2% 2%



Top 10 Make-Up Innovators–Europe (2011-2015)Company Country # Inventions

L'Oreal France 1,636

Henkel & CO Germany 271

BASF Germany 214

Unilever Netherlands / UK 202

Beiersdorf Germany 198

CNRS France 107

DSM IP Assets BV Netherlands 91

Merck Patent Germany 81

Evonik DeGussa Germany 77

Symrise Germany 52


Top 10 Make-Up Innovators–North America (2011-2015)Company Country # Inventions

Procter & Gamble US 296

DuPont US 156

Dow Corning US 107

Celanese US 99

Avon US 96

Allergan US 91

Johnson & Johnson US 73

Dow Global Technologies US 61

ELC Management US 51

Colgate Palmolive US 41


Most Prolific Scientific Research Institutions In Cosmetics (2005–2015)Institution Country # of Papers (WoS)

University of Sao Paulo Brazil 177

US FDA US 108

Procter & Gamble US 103

Cosmetic Ingredient Review US 102


Harvard University US 83

Chinese Academy of Sciences China 81

State University of Campinas Brazil 78

University of California Los Angeles US 70

University of California San Francisco US 68




Summary

Despite plastic surgeons being busier than ever (skin-related innovation is up 12 percent), the bulk of the cosmetic subsectors dipped over the prior year. Fragrances experienced the largest drop, of 15 percent. Nevertheless, Cosmetics & Well Being came out on the positive side overall, with a modest gain of 3 percent over 2014.

The world’s most active Cosmetics & Well Being innovator is, surprisingly, South Korea’s LG Household & Healthcare, part of the LG family of businesses focused on helping customers realize their “beauty, lifestyle and culture dreams.” This is the first time since the inception of the annual State of Innovation that a traditional cosmetics company has been trumped by a technology-based company, yet another example of an organization (LG) that’s spreading its wings into tangential areas.

In the Make-up subsector, L’Oreal leads the pack with more than twice as many inventions (1,636) as the next nearest innovator, KAO (776). This continues L’Oreal’s leadership streak in Make-up, which it has consistently dominated since we’ve been tracking the field.

Asia continues to have a strong foothold in this sector, with Japan leading the way. Germany has the most significant presence in Europe, as more chemical companies branch into cosmeceuticals. In the US, it’s a combination of consumer-product and chemical companies that are driving beautification.

Brazil once again takes the top spot in terms of cosmetics-related scientific research, with the University of Sao Paulo and State University of Campinas taking the first and eighth spots in terms of research output, respectively. This perhaps isn’t a huge surprise as Brazil is also among the top five nations in the world in terms of the overall number of aesthetic plastic surgeries performed annually.9

There’s no doubt about it: our socially connected world, technology, nano-particles, new molecular entities and the accessibility of new treatments are driving a boom in beautification. The prospects are ripe for this sector to continue its upward climb. We may not all be look-alikes for Jennifer Aniston, recently named the 2016 World’s Most Beautiful Woman by People magazine, but today’s innovations certainly make replicating “that look” a lot easier.10

“ The French National Center for Scientific Research (CNRS) was established to carry out research. Performed by more than 1,000 units throughout France and abroad, this research improves knowledge, some of which results in breakthrough innovation. Technology transfer is a logical extension of our research activities, entrusted to more than 30,000 staff and partly led in partnership with industry.” —Marie-Pierre Comets, Director of Innovation & Business Relations, CNRS

9 http://www.prnewswire.com/news-releases/the-international-society-of-aesthetic-plastic-surgery-releases-global-statistics-on-cosmetic- procedures-300108852.html

10 http://www.people.com/people/package/article/0,,20998070_21001278,00.html


2016 State of Innovation stateofinnovation.com Cosmetics & Wellbeing 30REUTERS/ISSEI KATO


2016 State of Innovation stateofinnovation.com Food, Beverage & Tobacco 31REUTERS/ALESSIA PIERDOMENICO

FOOD, BEVERAGE & TOBACCO

If history repeats itself, can developing nations change health outcomes and still be the latest frontier for

Tobacco and Beverage innovation?


2016 State of Innovation stateofinnovation.com Food, Beverage & Tobacco 32

TOBACCO OUT-INNOVATES FOOD AND BEVERAGES

Despite warnings that they’re bad for your health, cigarettes continue to dominate the world stage in the category of Food, Beverage & Tobacco innovation, while also topping the charts for companies with strong dividend payouts.

A recent Thomson Reuters Lipper Fund analysis stated that “CME Group, Dow Chemicals and Philip Morris are companies with strong fundamentals…Philip Morris is seeing good demand for cigarettes and enjoying healthy margins as its business looks stronger than ever…If you are looking for strong dividend payers, these companies may be worth a second look.”11

Where innovation really needs to happen, however, is in the area of Food, for better ways to feed the world’s growing population and produce healthy, non-processed alternatives that don’t add to negative health effects.

2016 will be the year when consumer demand for “real” food starts to seriously take effect as a decreased appetite for GMO and non-natural foods gains momentum. GMO may be the way to go to make certain staple crops have higher yields and be more defect-resistant, however a growing number of consumers are demanding healthy food products with clear labeling. Similarly, the Beverage market continues to move away from sugary drinks toward healthy drinks and teas.

“ We know that our food may contain a wide range of potentially hazardous substances. But interesting solutions abound. The EFSA European Food Consumption Database is using data in innovative ways to identify and help reduce the risk of contaminated food, particularly among vulnerable populations.” —Davide Arcella, Scientific Officer European Food Safety Authority (9billionbowls.com)

11 http://lipperalpha.financial.thomsonreuters.com/2016/04/top-dividend-payers-include-cigarettes-chemicals-and-financials/


http://lipperalpha.financial.thomsonreuters.com/2016/04/top-dividend-payers-include-cigarettes-chemicals-and-financials/


FOOD, BEVERAGE & TOBACCO OVERVIEW


30% Meat 8,256 9,033 -9%

28% Brewing 7,662 6,479 18%

26% Bakery 7,267 6,841 6%

14% Tobacco 3,923 4,215 -7%

2% Sugar&Starch 667 689 -3%


Top 10 Global Innovators–Food, Beverage & Tobacco (2015)Company Country # Inventions

China Tobacco Hubei Ind Corp China 1122

Qingdao Xiuxian Foods Co. China 165

Philip Morris US 121

University of Guangxi China 118

Inst Agro Food Science & Technology Chinese China 114


University of Zhejiang Ocean China 104

Hefei Bulaochuanqi Health Science & Technology China 87

Wuhu Hongyang Food China 72

Anhui Xianzhiyuan Food China 69


Top 10 Brewing Innovators–Asia (2011-2015)Company Country # Inventions


Harbin Shanbao Wine Ind China 166

Luzhou Pingchuang Technology China 155

Korea Food Research Institute S Korea 109

Rural Development Administration Korea S Korea 89

Sapporo Breweries Japan 83

Guangming Dairy Ind China 82

Suntory Holdings Japan 81

Kirin Japan 80

Asahi Breweries Japan 73


30%

28%

26%

14%

2%



Top 10 Brewing Innovators–Europe (2011–2015)Company Country # Inventions

Novozymes Denmark 105

DSM Netherlands 89

Chr Hansen Denmark 45

Nestec Switzerland 40

Danone France 35

Krones Germany 32

IFP Energies Nouvelle France 21

GEA Brewery Systems Germany 18

Bayer Cropscience Germany 16

LeSaffre France 15


Top 10 Brewing Innovators–North America (2011–2015)Company Country # Inventions

Danisco US 150

Butamax Advanced Biofuels US 31

Codexis US 22

Coskata US 22

BP North America US 21


US Secretary of Agriculture US 18

Poet Res Inc US 16

Monsanto US 14

Mascoma US 13


Most Influential Scientific Research Institutions in Food Science & Technology (2005 -2015)Name Country # of Papers (WoS) Category Normalized Citation Impact

University of British Columbia Canada 431 1.93

Universiy of Lleida Spain 583 1.88

Polytechnic Institute of Braganca Portugal 316 1.79

University of Massachusetts System USA 824 1.73

Nanchang University China 415 1.66

Dresden University of Technology Germany 362 1.63

Rovira I Virgili Univeristy Spain 343 1.57

University of Melbourne Australia 306 1.55

University of Barcelona Spain 518 1.55

VTT Technical Research Centre of Finland Finland 314 1.54




Summary

While food-related innovation can be found in the Biotechnology sector where GMO crops and engineered-organism inventions are categorized, the Food, Beverage & Tobacco technology area covers inventions specific to the manufacturing and composition of items outside of what is genetically modified.

The sector remained predominantly flat over the last year, growing by just 1 percent or about 300 inventions more than the prior period. The largest growth was in the area of Brewing, which bubbled over 18 percent to 7,662 unique innovations last year, followed by Bakery, which puffed up 6 percent. Meat, Tobacco and Sugar & Starch all experienced declines.

The top 10 most active innovators in this category are all from China except one: Philip Morris in the US. This makes logical sense since China has the world’s largest population,

which it will need to find a way to sustain in the coming decades as earth’s population nears 10 billion people, and smoking is still an accepted habit in this culture.

China Tobacco Hubei Industries Corp. is the most prolific innovator across the entire sector, with 1,122 unique inventions, followed by Qingdao Xiuxian Foods Co., Philip Morris, University of Guangxi and Inst Agro Food Science & Technology Chinese, all of which had 165 or fewer inventions for the same period. This mix of organizations gives a glimpse into their focus and priorities.

In terms of Brewing innovation, China again leads the world, being home to the three most active Brewing innovators globally: University of Jiangnan (217 inventions), Harbin Shinbao Wine Industries (166 inventions), and Luzhou Pingchuang Technology (155 inventions).

“ The United States and China alone represent 68 percent of all of the patent documents associated with crop breeding around the world. These two countries are larger than the closest competing country by at least a factor of five.” —Bob Stembridge, Senior IP Analyst, Thomson Reuters


2016 State of Innovation stateofinnovation.com Food, Beverage & Tobacco 36REUTERS/DANIEL MUNOZ


2016 State of Innovation stateofinnovation.com Home Appliances 37

HOME APPLIANCES

Will our appliances still need us when the Internet of Things takes over?

REUTERS/REGIS DUVIGNAU



TODAY’S CONNECTED HOME

The lyrics of a popular folk song for children read: “The head bone’s connected to the…neck bone; the neck bone’s connected to the…back bone; the back bone’s connected to the…thigh bone…” and so on. There could be a new take on this regarding our homes today. It might go something like this: “The smart phone’s connected to the…coffee maker; the coffee maker’s connected to the…refrigerator; the refrigerator’s connected to the…thermostat; the thermostat’s connected to the…garage door…” and so on.

This isn’t such a far-fetched concept. Today’s connected homes are technologically linked in ways we couldn’t have imagined a decade ago. And, it’s exactly this connectivity that’s driving much of the innovation in Home Appliances. The Internet of Things (IoT) has brought changes to the way we live and what we expect. New technologies incorporated into our homes, offices, clothing and appliances make them smarter, more efficient and better managers of us.

“The IoT revolution will offer us opportunities and ease-of-use we could have never imagined, but suddenly find ourselves unable to live without…We need to give IoT time to thrive, and identify the markets for it that make sense. The Internet of Things is really about finding new places that make sense for the Internet. Let consumers decide what their next Internet will be,” said Shawn DuBravac, chief economist of the Consumer Technology Association (CTA) and author of Digital Destiny: How the New Age of Data Will Transform the Way We Live, Work, and Communicate.12

“ BlackBerry began as a startup company that invented mobile computing. I can say without reservation that the spirit of innovation, the drive to continue to improve, is alive and well in this company. Every part of BlackBerry is driven by the desire to create the most productive, secure and private solutions in the mobile marketplace—that includes revolutionary smartphone features, software that makes critical business and government communications more secure, and coming up with new ways of enabling devices to communicate with one another through the Internet of Things (IoT).” —John Chen, Executive Chairman & CEO, BlackBerry

12 http://www.cio.com/article/3019286/ces/what-will-the-internet-of-things-be-when-it-grows-up.html


http://www.cio.com/article/3019286/ces/what-will-the-internet-of-things-be-when-it-grows-up.html


HOME APPLIANCES OVERVIEW


43% Kitchen 39,026 33,590 16%

34% Heating/Air Conditioning 30,552 24,316 26%

9% Household Cleaning 8,173 6,718 22%

7% Human Hygiene 6,717 5,203 29%

7% Laundry 6,402 5,659 13%


Top 10 Global Innovators–Home Appliances (2015)Company Country # Inventions

Midea Group China 5,427

Zhuhai Gree Electric Appliances China 1,995

Haier Group China 1,315

Panasonic Japan 949

Mitsubishi Electric Japan 948

Samsung S Korea 736

BSH Hausgeräte Germany 697

LG S Korea 690

Hitachi Kucho System Japan 460

Daikin Kogyo Japan 446


Top 10 Kitchen Innovators–Asia (2011-2015)Company Country # Inventions

Midea Group China 3,309


Mitsubishi Electric Japan 2,348

LG S Korea 2,234

Haier Group China 1,649

Joyoung China 1,538

Hitachi Kucho Japan 1,188

Sharp Japan 916

Toshiba Japan 907

Zhuhai Gree Electric Appliances China 880


43%

34%

9%

7%

7%



Top 10 Kitchen Innovators–Europe (2011-2015)Company Country # Inventions

BSH Hausgeräte Germany 2,905

SEB Sweden 389

Electrolux Sweden 320

Nestec Switzerland 320

Philips Netherlands 318

Arcelik Turkey 253

Liebherr Hausgeraete Germany 237

Miele & Cie Germany 234

Rational Germany 145

EGO Elektro-Geraetebau Germany 135


Top 10 Kitchen Innovators–North America (2011-2015)Company Country # Inventions

Whirlpool US 696


Carrier US 220

Johnson Controls US 76

Trane Int. US 65

Conair US 64

Thermo King US 63

DuPont US 60

Kraft Foods US 53

Illinois Tool Works US 52


Most Prolific Scientific Research Institutions in Home Appliances (2005–2015)Institution Country # of Papers (WoS)

University of Zaragoza Spain 113

University of California Berkeley US 63

National Cheng Kung University Taiwan 53

Chinese Academy of Sciences China 44

Tsinghua University China 43

Polytechnic University of Milan Italy 40

Waseda University Japan 36

University of Tokyo Japan 35

Tohoku University Japan 35

Kyoto University Japan 33




SummaryHome Appliances is cleaning house in terms of its ranking on the innovation-activity barometer. The industry experienced 21 percent year-over-year growth, with all subsectors seeing double-digit jumps.

The most active subsector is Kitchens, however the largest increase occurred in Human Hygiene, which was up 29 percent over the prior period. Human Hygiene items include things such as a body scrub brush with a built-in soap dispenser, hair-styling devices and nail clippers, to name a few.

Asia is the undisputed leader in Home Appliance innovation. All but one of the top 10 innovators reside there, the lone wolf being BSH Hausgeräte, based in Germany. China takes the top three spots with Midea Group, Zhuhai Gree Electric Appliances and Haier Group, respectively.

In the Kitchen subsector, again Asia dominates, with Midea Group (China) and Panasonic (Japan) being the most active globally. The world’s third most active Kitchen innovator is BSH Hausgeräte (Germany), followed by Mitsubishi Electronics Home Appliances (Japan) and LG Electronics (South Korea).

Asia is also home to 70 percent of the world’s top 10 most prolific scientific-research institutions with a focus on home appliances. Japan leads with four, followed by China with two and Taiwan with one. But the most active in terms of research-paper out by far is the University of Zaragoza in Spain (113 papers) and the University of California Berkeley (63 papers).

There is no shortage of videos that portray what the future home may look like. If they are any indication of what’s to come, this sector is sure to continue seeing increases in innovation as the world is technologically modernized. June and Ward Cleaver would be astonished to see what a difference 50-plus years can make.

“ Our objectives are to overcome scientific and technological barriers in order to develop innovations that can be used by the industry to create wealth and jobs and to promote the emergence of a sustainable energy mix. Our innovation model is underpinned by dual know-how: strong knowledge of the market needs and a scientific approach of the highest level. Beyond science, we take into account the economic, societal and environmental constraints associated with the development of any innovation.” —Didier Houssin, Chairman & CEO, IFPEN (IFP Energie Nouvelles)


2016 State of Innovation stateofinnovation.com Information Technology 43

INFORMATION TECHNOLOGY

From the cloud to computers and blockchain, this is the neural net of technology.



PUSHING THE BOUNDARIES OF WHAT WE THINK IS POSSIBLE

The IoT is a major contributor to what’s driving the Information Technology (IT) boom with its increased demand for software, sensors and chips to connect our homes, cars and gadgets to the Internet. In fact, it’s predicted that there will be 22 billion IoT installed devices by 2018.13

Cloud-based technology is another advancement that’s also pushing IT boundaries. It’s expected that at least half of IT spending will be cloud-related in the next two years, with it reaching 60 percent of all IT infrastructure and 60 -70 percent of all software, services and technology spending by 2020.14

Add to these technological trends things such as cognitive computing, artificial intelligence, virtual reality and blockchain, among many others, and it’s clear why IT is the place to be. It’s the underpinning and connective tissue of so many technological advancements, making it (IT) the true cornerstone of the Digital Age.

“ Information Technology (IT) is the true cornerstone of the Digital Age, and with the world’s data estimated to increase 800% by 2020 driven by the Internet of Things (IoT), major IT trends such as Cloud computing and Cognitive computing will rapidly develop to provide the flexibility and intelligence required to store, analyze and provide services based on this vast repository of human knowledge.” —George Jack, Engineering Expert, Thomson Reuters

13 http://www.forbes.com/sites/sap/2015/11/05/idc-releases-top-ten-2016-it-market-predictions/#222cac383e6b 14 http://www.forbes.com/sites/sap/2015/11/05/idc-releases-top-ten-2016-it-market-predictions/#222cac383e6b


http://www.forbes.com/sites/sap/2015/11/05/idc-releases-top-ten-2016-it-market-predictions/#222cac383e6b

http://www.forbes.com/sites/sap/2015/11/05/idc-releases-top-ten-2016-it-market-predictions/#222cac383e6b


INFORMATION TECHNOLOGY OVERVIEW


82% Computing 387,097 340,386 14%

7% Other Peripherals 33,148 29,550 12%

5% Printers 24,752 23,359 6%

3% Smart Media 13,523 13,494 0%

2% Screens 8,112 7,692 5%

1% Scanners 4,471 4,510 -1%


Top 10 Global Innovators–Information Technology (2015)Company Country # Inventions

State Grid Corp China China 7,479

Canon Japan 6,370


IBM US 4,205

Ricoh Japan 3,539

Google US 3,164

Huawei China 2,799

Lenovo China 2,798

LG S Korea 2,521

Tencent Technology Shenzhen China 2,418


Top 10 Smart-Media Innovators–Asia (2011-2015)Company Country # Inventions


Toshiba Japan 646

State Grid Corp of China China 630

Toppan Printing Japan 557

ZTE China 369

Panasonic Japan 342

Dainippon Printing Japan 332

Sony Japan 324

NEC Japan 278

Hon Hai Precision Industry Co Taiwan 274


82%

7%

5%3% 2% 1%



Top 10 Smart-Media Innovators–Europe (2011-2015)Company Country # Inventions

Giesecke & Devrient Germany 252

Gemalto Netherlands 204

Siemens Germany 201

NXP Netherlands 171

Nokia Finland 127

Ericsson Sweden 115

STMicroelectronics Switzerland 110

Oberthur France 109

Merck Germany 94

Infineon Germany 88


Top 10 Smart-Media Innovators–North America (2011-2015)Company Country # Inventions

Sandisk US 228

IBM US 225

Qualcomm US 225

Apple US 223

Broadcom US 185

Micron US 166

Intel US 153

Microsoft US 103

BlackBerry US 101

Google US 96


Most Influential Scientific-Research Institutions in Computer Science (2005–2015)Institution Country # of Papers (WoS) Category Normalized Citation Impact

Technical University of Czestochowa Poland 362 4.25

Wellcome Trust Sanger Institute UK 392 4.25

European Molecular Biology Lab Germany 675 3.80

Stanford University US 5,107 2.77

California Institute of Technology US 1,976 2.76

Ecole Normale Superieure, Paris France 721 2.70

Massachusetts Institute of Technology US 6,287 2.67

University of California Berkeley US 4,804 2.60

University of California Los Angeles US 3,627 2.56

University of South Wales UK 339 2.53




SummaryInformation Technology is the engine behind much of the innovation happening across many sectors. That’s why IT continues to dominate as the largest technology area covered in the State of Innovation, as has been the case since this publication’s inception, and comprises 31 percent of the overall activity volume with nearly 430,000 unique inventions just last year.

The companies leading the top 10 in the global IT pack are predominantly from Asia: China, Japan and South Korea, with just two outsiders: IBM (US) and Google (US). The world’s leading three innovators are State Grid Corp of China (China), Canon (Japan) and Samsung (South Korea). Each of these leaders’ activity is significant, with thousands of unique inventions annually.

Computing is by far the most active subsector, comprising 82 percent of IT’s overall activity. This includes inventions to see through walls (Vayyar), etch 3-D printed logos into almost any surface (Glowforge), charge smartphones at stations (NRG-Go) and uniquely light objects to photograph them in high detail.15

In the Smart Media subsector, Samsung is the clear frontrunner with more than twice as many unique inventions as its nearest competitor: Toshiba. Giesecke & Devrient leads in Europe and Sandisk in the US, but with much less overall activity than their Asian counterparts.

Academic and scientific research in computer science has a more global footprint, with Asian institutions interestingly absent from the world’s top 10 in scholarly research. Poland and the UK are home to the most impactful institutions: Technical University of Czestochowa and Wellcome Trust Sanger Institute, respectively, however the Technical University of Czestochowa has slightly fewer overall papers, making them collectively more impactful than Wellcome’s.

“ Mobility is a key societal value, especially in megacities where half of the total population is concentrated. Everyone expects more connected and autonomous cars, with a simpler man to machine interface. Driving assistance features will reinforce safety and reduce CO2 emissions, through optimized ‘eco-driving,’ while improving the driving experience: this is the new concept of “Intuitive Driving” that Valeo has developed.” —Jacques Aschenbroich, CEO, Valeo

15 http://www.computerworld.com/article/3021280/ces/looking-to-the-future-5-new-ideas-from-ces-2016.html#slide1


http://www.computerworld.com/article/3021280/ces/looking-to-the-future-5-new-ideas-from-ces-2016.html#slide1

2016 State of Innovation stateofinnovation.com Information Technology 48REUTERS/SCOTT AUDETTE


2016 State of Innovation stateofinnovation.com Medical Devices 49REUTERS/DMITRY NEYMYROK

MEDICAL DEVICES

The support infrastructure of the healthcare industry, these varied devices keep physicians and patients thriving and ticking.


2016 State of Innovation stateofinnovation.com Medical Devices 50

PUMPING HARD TO KEEP US PUMPING

Medical devices are essential staples in every operating and hospital room. They’re the literal sustenance of life for diabetics, dialysis patients and those who are oxygen dependent, among many others. In life-threatening situations, they are silently behind the scenes ensuring emergency technicians have the tools needed for the most successful outcome.

These syringes, tubes, tanks, vials and other apparatus are the hardware of the medical and health industry, much like semiconductors are the hardware of electronic gadgets. Humans, as a whole, literally can’t live without them in the appropriate situations.

It may not be much of a surprise then that the Medical Device sector is alive and healthy. In developed nations, it’s a part of daily life for many. With aging populations and growing

chronic medical devices, they’re essential. For the developing world, they play an important role in the transformation to a developed economy.

Medical device companies have a unique opportunity to collabovate and partner with technology and software businesses to marry their data insights with new solutions and provide valuable views to physicians and patients alike. Luckily for all of us, the sector is pulsing.

“ A host of medical device companies, including frontrunner Medtronic, have filed patents and are in the process of developing an artificial pancreas, with the first system expected to be available for use by type 1 diabetics sometime in 2017. This unique closed-loop system consists of an insulin pump, a continuous glucose monitor placed under the user’s skin, and advanced control algorithm software embedded in a smartphone that intuitively signals how much insulin the pump should deliver to the patient. This system essentially takes the patient out of the diabetes management equation via the automation of the insulin regulation and injection process, which should greatly improve outcomes for these people.” —Holland Johnson Executive Editor, Medical Device Daily



MEDICAL DEVICES OVERVIEW


33% Diagnosis, Surgery 45,112 36,929 22%

30% Sterilizing, Syringes, Electrotherapy 41,528 31,898 30%

20% Medical Aids, Oral Administration 27,186 18,694 45%

17% Dentistry, Bandages, Prosthesis 22,490 19,250 17%


Top 10 Global Innovators–Medical Devices (2015)Company Country # Inventions

Olympus Optical Japan 818

Siemens Germany 638

Toshiba Japan 627

Fourth Military Medical University China 623

Samsung S Korea 526

Terumo Japan 482

Philips Netherlands 479

Canon Japan 473

Medtronic US 362

Covidien US 358


Top 10 Diagnosis-Surgery Innovators–Asia (2011-2015)Company Country # Inventions

Olympus Optical Japan 3,246

Fujifilm Japan 2,830

Toshiba Medical Japan 2,682

Canon Japan 1,862


Terumo Japan 1,020

Hitachi Medical Japan 913

Hoya Japan 807

Konica Minolta Japan 796

Seiko Epson Japan 693

Source: Thomson Reuters Derwent World Patents Index

33%

30%

20%

17%



Top 10 Diagnosis-Surgery Innovators–Europe (2011-2015)Company Country # Inventions

Siemens Germany 2,850

Philips Netherlands 1,861

Warsaw Orthopedic Poland 400

Aesculap Germany 328

Smith & Nephew UK 305

Zeiss Meditec Germany 281

Biosense Webster Israel Israel 264

Storz GmbH & KG Karl Germany 264

Roche Diagnostics Switzerland 217

Biedermann Technologies Germany 150


Top 10 Diagnosis-Surgery Innovators–North America (2011-2015)Company Country # Inventions

Covidien US 2,353

General Electric US 1,716

Boston Scientific SciMed US 1,125

Ethicon Endo-Surgery US 1,073

Medtronic US 1,056

Depuy Synthes US 769

St Jude Medical US 417

Cook Medical Technologies US 412

Intuitive Surgical Operations US 379

Abbott Diabetes Care US 368

Nellcor Puritan Bennett US 346


Most Prolific Scientific Research Institutions in Medical Devices (2005–2015)Name Country # of Papers (WoS)

US FDA US 219

Harvard University US 190

University of Pennsylvania US 101

University of Michigan US 93

Stanford University US 90

Duke University US 88

University of Minnesota US 85

Massachusetts Institute of Technology US 80

Brigham and Women’s Hospital US 72

University of North Carolina US 71




Summary

Following the reported 6 percent year-over-year decline in Medical Devices from the prior period, innovation in this area got a shot in the arm to become the most active of all technology sectors covered. It had the largest year-over-year increase, 27 percent, and all of its subsectors had double-digit growth, with Medical Aids & Oral Administration seeing the largest increase: 45 percent.

Japan is home to 40 percent of the world’s top 10 Medical Device companies, including the world leader Olympus. China and South Korea also have their hands in this sector, with the Fourth Military Medical University and Samsung Electronics, respectively. Europe and the US also make contributions to the global top 10, with two and three innovators each, respectively.

In the Diagnosis Surgery subsector, Japan has 90 percent of the top 10 innovators in Asia, demonstrating the nation’s proclivity in this field. South Korea’s Samsung is the only

non-Japanese company in that top 10. Germany is the clear leader in Europe, with 60 percent of the top 10 companies, and the US takes all of the top spots for North America, with Covidien at the top followed by General Electric and Boston Scientific.

Medtronic completed its acquisition of Covidien in 2015, so their innovation activity for this period was reported separately. Their combined total output is more than 3,400 inventions, however, making them the overall global leader in Diagnosis, Surgery, even over Japan’s Olympus, with 3,246 unique inventions.

All of the top 10 most prolific medical device research institutions are from the US, with the FDA at the top followed by Harvard and the University of Pennsylvania. It’s interesting that despite Japan’s leadership position in innovation, it doesn’t rank in the top 10 of the most prolific scholarly research organizations globally.

“ For us, innovation isn’t just about creating exciting objects that catch the imagination of our customers for one heady moment. Instead, it’s about perfecting products, services and business models that help our customers to take care of people and save lives, to live healthier and enjoy themselves, and to be part of a more sustainable world. At Philips, Innovation is at the very core of our business strategy, as well as our brand positioning and company’s mission: ‘At Philips we strive to make the world healthier and more sustainable through innovation’.” —Brian Hinman, Chief IP Officer, Philips


2016 State of Innovation stateofinnovation.com Medical Devices 54REUTERS/ALY SONG


2016 State of Innovation stateofinnovation.com Oil & Gas 55REUTERS/WOLFGANG RATTAY

OIL & GAS

Fossil-fuel-based products emit harmful greenhouse gases. Can we make the transition to environmentally

friendly alternatives to meet governmental goals?


2016 State of Innovation stateofinnovation.com Oil & Gas 56

COP21 CREATES GLOBAL CHALLENGE FOR ENERGY INNOVATORS

December 2015 will long be remembered as the month when the historic COP21 (Conference of Parties) took place in Paris, where nearly 200 heads of state from around the world agreed to try to slow global warming and overcome its negative effects.

Innovation is imperative in order to drive alternative ways to power the planet and reduce our dependence on fossil fuels. It’s essential that we find more environmentally friendly sources of energy without harmful greenhouse gas emissions.

Could Oil & Gas bellwethers hold the answer?

Corporate quarterly-earning conference calls convey the toll of the state of today’s industry, with plunging prices and decreasing demand. Exxon Mobil reported a 58 percent decline in its 2015 third-quarter profit over the same period

a year earlier;16 Shell’s quarterly profit dropped by 70 percent;17 and Total in France announced a 69 percent decline,18 to name a few.

Nevertheless, the sector continues to innovate. Some of the innovation has been related to finding new ways to extract energy from traditional sources, such as the process involved in hydraulic fracturing, or ways to mitigate carbon emissions from existing oil-extraction methods. The big question on many analysts’ minds, however, is whether or not the large Oil & Gas players will be able to find sustainable solutions to the COP21 challenge, via R&D investments or otherwise.

“ The rout in crude prices is snowballing into one of the biggest avalanches in the history of corporate America, with 59 oil and gas companies now bankrupt…The number of U.S. energy bankruptcies is closing in on the staggering 68 filings seen during the depths of the telecom bust of 2002 and 2003…”

—Ernest Scheyder, Houston Energy Correspondent, Reuters News & Terry Wade, Houston Bureau Chief, Reuters News http://www.reuters.com/article/us-usa-shale-telecoms-idUSKCN0XV07V

16 http://www.nytimes.com/2016/02/03/business/energy-environment/oil-company-earnings.html?_r=0 17 http://oilprice.com/Energy/Energy-General/Top-Oil-Companies-Report-Dismal-Earnings.html18 Ibid


http://www.reuters.com/article/us-usa-shale-telecoms-idUSKCN0XV07V

http://www.nytimes.com/2016/02/03/business/energy-environment/oil-company-earnings.html?_r=0

http://oilprice.com/Energy/Energy-General/Top-Oil-Companies-Report-Dismal-Earnings.html


http://oilprice.com/Energy/Energy-General/Top-Oil-Companies-Report-Dismal-Earnings.html


OIL & GAS OVERVIEW


64%Exploration, Drilling, Production

18,086 15,589 16%

32% Fuels and Other Products 9,224 8,459 9%

3% Transportation and Storage 864 658 31%

1% Refining 241 183 32%


Top 10 Global Innovators–Oil & Gas (2015)Company Country # Inventions

Sinopec China 1,991

Petrochina China 1,982

Halliburton US 940

China National Offshore Oil China 455

Schlumberger US 378

Baker Hughes US 288

PRAD Research & Development US 272

University of China Petroleum China 239

Toyota Japan 219

Tatneft Stock Russia 189


Top 10 Petroleum & Natural Gas Exploration Innovators–Asia (2011-2015) Company Country # Inventions

Sinopec China 7,612

Petrochina China 7,245

China National Offshore Oil China 1,798

University of China Petroleum China 803

University of Southwest Petroleum China 675

Nippon Oil Japan 294

University of Northeast Petroleum China 251

Toyota Japan 232

Beijing Sany Heavy Machinery China 227

Daewoo Shipbuilding & Marine ENG CO S Korea 195


64%

32%

3% 1%



Top 10 Petroleum & Natural Gas Exploration Innovators–Europe (2011-2015)Company Country # Inventions

Tatneft Stock Russia 903

Shell Oil Netherlands 666

Saudi Arabian Oil Co Saudi Arabia 468

IFP Energies Nouvelles France 371

BASF Germany 311

TOTAL SA France 198

BP UK 160

Statoil Petroleum Norway 125

Linde Germany 113

Welltec AS Denmark 113


Top 10 Petroleum & Natural Gas Exploration Innovators–North America (2011-2015) Company Country # Inventions

Halliburton Energy Services US 2,848

Schlumberger Technology US 1,905

Baker Hughes US 1,452

PRAD Research & Development US 1,256

Exxon Mobil US 637

UOP US 619

Chevron US 435

National Oilwell Varco US 329

Weatherford/Lamb US 308

Smith Int US 223


Most Influential Scientific Research Institutions in Oil & Gas (2005-2015) Name Country # of Papers (WoS) Category Normalized Citation Impact

Imperial College London UK 119 4.57

United States Department of Energy US 102 2.89

Stanford University US 191 2.65

University of Texas Austin US 339 2.09

Delft University of Technology Netherlands 108 1.93

Norwegian University of Science & Technology Norway 149 1.81

Tallinn University of Technology Estonia 170 1.72

Heriot Watt University UK 154 1.63

Texas A&M University US 338 1.52

University of Oklahoma US 176 1.50




SummaryThe sector’s innovation pace ignited beyond the prior period, jumping up 14 percent overall, with Refining and Transportation & Storage seeing the largest subsector jumps of 32 and 31 percent, respectively.

China leads the world’s innovation activity taking the top two spots globally. Sinopec and Petrochina rank first and second, respectively. China National Offshore Oil is fifth. The US is the next most active region with Halliburton, Schlumberger, Baker Hughes and PRAD Research & Development making the top 10 list.

In the subsector Exploration, Drilling & Production, China again dominates, with 80 percent of the top 10 for Asia, including the same three innovators as above securing the first three positions. Japan rounds out the remaining two in the top 10 with, interestingly, Toyota as part of the mix.

Europe and the Middle East feature an eclectic mix in their top 10, comprising Russia’s Tatneft Stock in the top spot, followed by eight others from Europe and one from Saudi Arabia. UK, France, Germany, the Netherlands, Norway and Denmark comprise the European contingent. Halliburton Energy Services is the leading US Oil & Gas innovator for Exploration, Drilling & Production, and is third globally overall in volume for this category.

The Imperial College of London is the most influential scholarly research institution in the Oil & Gas sector, followed by the US Department of Energy and Stanford University. Imperial’s department of Earth Science and Engineering has a Petroleum Engineering group that does significant industry-funded research, which can be found on its website: imperial.ac.uk/engineering/departments/earth-science/research/.

“ These days, global businesses and technology environments see their existing businesses and technologies being replaced at alarming speeds by new ones through the combination and convergence of diverse businesses and technologies. In the energy industry where LSIS engages, Internet of Things, big data, and innovation of manufacturing are emerging, ushering in a smart era of ICT combination and convergence and a direct-current era that can change the existing electric power paradigm.” —Ja-Kyun Koo, Chairman & CEO, LSIS


2016 State of Innovation stateofinnovation.com Oil & Gas 60REUTERS/LUKE MACGREGOR


2016 State of Innovation stateofinnovation.com Pharmaceuticals 61

PHARMACEUTICALS

Do you know who makes your medication and where it’s from? You might be surprised how much comes from Asia.



CHANGING DYNAMICS STEER INDUSTRY

The pharmaceutical industry continues to grow thanks to its branching into creative, new markets. Proof can be seen in the seven drugs expected to launch this year that Thomson Reuters predicts will achieve blockbuster sales status of more than $1 billion in revenue by 2020, with some predicted to hit $2 billion during that period.

The current pharmaceutical-success trend is a result of a concoction featuring an increased focus on rare diseases, ongoing development of more convenient Fixed Dose Combination (FDC) regimens and the continuation of the conflict between price versus access to medicines. These, alongside new treatments involving bio-organisms, several new vaccines (such as for malaria and dengue fever) and immune-therapies have given the sector a burst of adrenaline.

Collabovation is a prerequisite for future pharmaceutical growth in order to meet the health and drug needs of a larger population, especially in developing nations, and to ensure the longevity of an aging demographic as well. R&D models will increasingly shift to involve partnerships between pharmas and either their suppliers or partners, allowing each party to focus on its respective area of expertise. Testing of “virtual beings” is also expected to expedite development and trial cycles, bringing drugs to market faster and with more successful outcomes.19

“ The relationship between drug prices and the costs of development is expected to be a major focal point for drug companies, investors, regulators and politicians this year. With the rise of global healthcare costs, the need to demonstrate meaningful impact will be greater than ever for pharmaceutical companies. The 2016 drugs to watch are likely to figure prominently in those discussions.”

—Richard Harrison, Chief Scientific Officer, Thomson Reuters Intellectual Property & Science

19 http://www.pwc.com/gx/en/industries/pharmaceuticals-life-sciences/pharma-2020/pharma2020-virtual-rd-which-path-will-you-take.html


http://stateofinnovation.thomsonreuters.com/new-blockbuster-drugs-poised-to-enter-the-market

http://www.pwc.com/gx/en/industries/pharmaceuticals-life-sciences/pharma-2020/pharma2020-virtual-rd-which-path-will-you-take.html


PHARMACEUTICALS OVERVIEW


63% Organics 88,116 85,679 3%

22% General 30,320 26,774 13%

11% Heterocyclics 15,854 16,272 -3%

3% Inorganics 3,975 1,373 190%

1% Steroids 1,036 1,075 -4%


Top 10 Global Innovators–Pharmaceuticals (2015)Company Country # Inventions




LG Household & Healthcare S Korea 270

Foshan Saiweisi Pharma Technology China 266


Sanofi France 232

University of Shanghai Jiaotong China 225

CNRS France 223

University of Guangxi China 209


Top 10 Heterocyclics Innovators–Asia (2011-2015) Company Country # Inventions

University of China Pharmaceuticals China 454

University of Nanjing China 312

Takeda Pharmaceuticals Japan 292

Shanghai Inst Pharma China 263


University of Shandong China 238

University of Fudan China 234

Foshan Saiweisi Pharma Technology China 229

Cadila Healthcare India 213

Hainan Weikang Pharma Qianshan China 212


63%

22%

11%3%1%



Top 10 Heterocyclics Innovators–Europe (2011-2015)Company Country # Inventions


Novartis Switzerland 499

Bayer Germany 427

GlaxoSmithKline UK 382

Boehringer Ingelheim Germany 364

Sanofi France 349

Janssen Pharmaceuticals Belgium 244

CNRS France 188

Merck Germany 176

Astrazeneca UK 134


Top 10 Heterocyclics Innovators–North America (2011-2015) Company Country # Inventions

Merck & Co. US 732

Bristol-Myers Squibb US 373

Abbvie US 361

Allergan US 282

Gilead Scientific US 228

Genentech US 200

Pfizer US 199


Vertex Pharmaceuticals US 172

Teva Pharmaceuticals US US 123


Most Influential Scientific Research Institutions in Pharmaceuticals (2005–2015) Name Country # of Papers (WoS) Category Normalized Citation Impact

Tianjin University China 325 4.97

Lundbeck Corporation Denmark 529 3.59

Gilead Sciences US 478 3.34

World Health Organization EU 316 2.53

University of Newcastle UK 450 2.37

University of the Chinese Academy of Sciences China 742 2.31

Howard Hughes Medical Institute US 477 2.28

Guy’s & St. Thomas’ NHS Foundation Trust UK 762 2.21

Massachusetts Institute of Technology US 953 2.17

Tsinghua University China 579 2.16




Summary

Pharmaceuticals experienced 4 percent year-over-year growth, with the most significant increase occurring in inorganics, which jumped up by 190 percent, from 1,373 to 3,975 unique inventions for the period. Inorganics include all non-carbon-based chemical compounds, featuring an array of metallic compounds as well as those that are synthesized in a chemical plant or lab.

Globally, China is the world’s leading region for Pharmaceutical innovation with 50 percent of the top 10 pharmaceutical companies residing there: University of Jiangnan, University of Zhejiang, Foshan Saiweisi Pharma Technology, University of Shanghai Jiaotong and University of Guangxi. The collabovation between the public and private sectors is also clear in this industry, as all of China’s representatives are from academia.

In the subsector for Heterocyclics, China again dominates the top ten list in Asia with 80 percent of the organizations in that area. Heterocyclics are classic compounds that have atoms of at least two different elements as part of their rings. Cadila Healthcare of India also makes the top 10 global innovator list within this area.

Merck, Roche and Novartis are the world’s three most innovative organizations overall in Heterocyclic volume, surpassing even China’s leading organizations in their R&D activity. Contrary to Asia, nearly all of the top 10 organizations in Heterocyclics in Europe and North America are from the private, corporate sector.

The most influential top 10 scientific research organizations in pharmaceuticals have balanced representation across China, Europe and North America, with China’s Tianjin University taking the top spot.

“ Innovation flourishes when you take away the fear to fail, encourage people to take controlled risks and create a healthy mix of diverse skills, cultures and experiences within your workforce. Last but certainly not least, we constantly remind ourselves that the customers in our care, the physicians, veterinarians, farmers and consumers, ultimately determine what the true innovations are.” — Dr. Marijn Dekkers, CEO, Bayer AG


2016 State of Innovation stateofinnovation.com Pharmaceuticals 66REUTERS/CHAIWAT SUBPRASOM


2016 State of Innovation stateofinnovation.com Semiconductors 67

SEMICONDUCTORS

The lifeline of today’s technological devices, semiconductors are the Digital Age organs that keep us

connected, informed, hopping...alive.



ASIAN CONDUCTORS LEAD IN THE SPACE

The industry for those little chips, sensors and circuits that are the hardworking internal organs of today’s electronic devices is going through a period of transformation. On the one side is massive consumer demand for gadgets to be better, faster and more intelligent. The automotive and IoT trends mentioned earlier in this paper are examples of how technology is becoming more connected and being applied in new ways.

The flip side is lower manufacturer expectations for profitability and the push for more environmentally friendly solutions to power our future. Semiconductors have an important role to play, however it will take the next generation of innovation to bring them back to their heyday.

Intel recently announced plans to lay off 11 percent of its workforce—up to 12,000 people.20 This comes on the tails of other publicized layoffs from bellwethers like Samsung Electronics, Marvell and others in the space.

While China may be earmarked as the epicenter of Semiconductor growth for the near future, the global Semiconductor space is evolving, moving to the next stage of its lifecycle, and is ripe for creative inventors to apply them in new ways.

“ Overall growth in the semiconductor space is slowing due to the slowdown in the largest segment, which includes desktop PCs (personal computers), notebooks, ultra-mobiles and tablets. The latest growth drivers, occupying smaller segments, are now the mobile sector, automotive markets, sensors, light-emitting devices and the advanced packaging industry. On the horizon, the next big growth driver is the Internet of Things (IoT), and is expected to have a significant impact on the advanced packaging. Meanwhile the Chinese government continues to invest heavily in building its own semiconductor industry with the aim to catch up technologically with the world’s leading firms by 2030. Will this one day mean cheaper electronics worldwide and major advancements in innovation as competition increases? Time and research/analysis will tell.”

—Jason Foster, Senior Semiconductor Analyst, Quality Expert & Content Specialist, Thomson Reuters

20 http://www.investors.com/news/technology/elephant-intel-dances-but-12000-layoffs-could-signal-recession/


http://www.investors.com/news/technology/elephant-intel-dances-but-12000-layoffs-could-signal-recession/


SEMICONDUCTORS OVERVIEW


40%Semiconductor Materials and Processes

54,907 56,827 -3%

29%Memories, Film and Hybrid Circuits

40,920 35,220 16%

27% Discrete Devices 37,771 38,571 -2%

4% Integrated Circuits 5,771 5,775 0%


Top 10 Global Innovators–Semiconductors (2015)Company Country # Inventions


BOE Technology Group China 2,900

LG S Korea 2,884

Shenzen China Star Optoelectronics Tech China 1,701

Toshiba Japan 1,521

Taiwan Semiconductor Mfg Co Taiwan 1,424

Semiconductor Mfg. Int. Shanghai Corp China 1,405

IBM US 969

SK Hynix S Korea 873

Oceans King Lighting Science & Technology China 872


Top 10 Semiconductor Materials & Processes Innovators–Asia (2011–2015) Company Country # Inventions


LG S Korea 5,878

Toshiba Japan 5,194

Semiconductor Mfg Int Shanghai Corp China 4,953

Taiwan Semiconductor Mfg Co Taiwan 4,836

SK Hynix S Korea 3,929

Renesas Electronics Japan 3,323


Tokyo Electron Japan 2,998

Sharp Japan 2,462


40%

27%

4%

29%



Top 10 Semiconductor Materials & Processes Innovators–Europe (2011–2015)Company Country # Inventions

Infineon Technologies Germany 1,508

Osram Opto Semiconductors Germany 1,085

STMicroelectronics Switzerland 1,011

Commissariat Energie Atomique France 644

ASML Netherlands Netherlands 614

Bosch Germany 608

Merck Germany 412

Zeiss Smt Germany 391

Soitec France 285

Fraunhofer Ges Foerderung Angewandten EV Germany 280


Top 10 Semiconductor Materials & Processes Innovators–North America (2011-2015) Company Country # Inventions

IBM US 5,307

Applied Materials US 1,855

Micron Technology US 1,629

GlobalFoundries US 1,057

Texas Instruments US 1,015

Intel US 881

Freescale Semiconductor US 844

Ase Group US 615

Advanced Micro Devices US 587

Intermolecular US 527


Most Prolific Scientific Research Institutions in Semiconductors (2005–2015) Name Country # of Papers (WoS)

Chinese Academy of Sciences China 7,121

Russian Academy of Sciences Russia 3,566

University of Tokyo Japan 2,092

CNRS France 1,956

Tohoku University Japan 1,700

Osaka University Japan 1,695

University of California Berkeley USA 1,684

Nanyang Technological University Singapore 1,624

National Chiao Tung University Taiwan 1,504

Tokyo Institute of Technology Japan 1,334




Summary

Semiconductors hit a short circuit in the period ending December 31, 2014 and showed a decline for the first time in a number of years. Nevertheless, its path has been somewhat corrected as it saw a 3 percent year-over-year increase in activity, with Memories, Films & Hybrid Circuits jumping 16 percent, the most of any subsector. The largest segment: Semiconductor Materials and Processes, however, declined by 3 percent over the period.

Asia continues to lead in the overall Semiconductor landscape, with Samsung Electronics taking the top position and logging over 4,000 unique inventions in just one year. LG and SK Hynix (both from South Korea) also rank in the top 10 overall. China, Japan and Taiwan all also place in the world’s top 10, with China taking four of the 10 slots, compared to just one each by Japan and Taiwan. IBM, which previously held the number one position in this sector globally, is now eighth. Samsung has 328 percent more inventions annually than IBM. Europe does not even place in the top 10.

Samsung also dominates the subsector category for Semiconductor Materials & Processes, with 45 percent more volume than its nearest competitor, LG. Japan fares well with 50 percent of the top innovators in this subsector.

Germany is the European leader in the Semiconductor Materials & Processes subsector with 60 percent of the organizations in the world’s top 10. However, even with Infineon at the top with 1,508 unique inventions over the five years, Samsung still comes out on top in terms of its output with 463 percent more activity than Infineon. Even Japan’s Sharp, ranked tenth overall in Asia, is 63 percent more active than the industry leader in Europe.

IBM takes the top US spot in this sub-category with 5,307 unique inventions over the five years, but that is still 40 percent fewer than Samsung.

In the scholarly research realm, Asia again leads with 70 percent of the top 10. China, Russia and Japan take the top three spots globally. The EU and the US each have one representative institution on the list of the most prolific semiconductor research organizations.

Asia is the clear frontrunner in Semiconductor innovation activity. Given the volume generated from that continent, it’s evident that the region will be a force to reckon with and the companies on this list are paving the way. The question now becomes: how do these organizations morph to address the next stage of electronic and renewable needs.

“ Marvell has a rich history of leadership in semiconductor innovation, and innovation remains one of the core values of our company. Innovation means many things to Marvell but at the heart of it, we continue to have a steadfast focus on advancing the global semiconductor industry with cutting-edge technologies and solutions. In collaboration with our service provider and OEM customers, we are dedicated to helping them bring new electronic systems and devices to market that ultimately improve the lives of consumers around the world.” —Dr. Zining Wu, Chief Technology Officer, Marvell Technology Group


2016 State of Innovation stateofinnovation.com Telecommunications 73

TELECOMMUNICATIONS

There’s a swirling convergence of Telecoms activity, from 5G to IoT and NFC.

OMG–let’s c if u r able 2 keep up–LOL.

REUTERS/DANIEL MUNOZ



TELECOMS TRIFECTA IS BASIS FOR WHAT’S TO COME

The Telecommunications space is yet another that’s integral to the IoT phenomenon, providing the network connectivity, equipment and devices essential for it to function. Collabovation also plays a key role in the success of the sector, integrating Telecoms expertise with that of automotive, appliance, fitness, wellbeing and other categories so partners on each side of the equation can focus on what they respectively do best and leverage one another’s strengths.

The rub in all this is bandwidth. It’s currently somewhat limited and in order for Telecoms to really take off, more spectrum is needed. The sector is being hit by a trifecta of sorts involving increased usage and demand for storage, decreasing rates/pricing and the lack of a far-reaching spectrum infrastructure. However, spectrum auctions and 5G-technology development are poised to change this in the not-too-distant future.

The sky’s truly the limit when it comes to Telecoms, and that limit can and will be pushed as IoT becomes more pervasive, customers demand fast and better accessibility, and new technologies break old barriers. IoT, 5G, streaming services, the expansion of wearables and the shift to software-based networking solutions will shape the future of Telecoms to come. There’s ample growth opportunity and this is definitely a space to pay attention to.

“ Since the dawn of telecommunications, Ericsson has put enormous time and effort into collaborating with others to set the open standards that make global communications and connections possible, with a firm belief that interoperability and enabling end-to-end performance is key to leading innovation in the information and telecom industry. To continue to advance technology, patents play an active role through standardization and licensing and with one of the strongest patent portfolios in mobile communications, Ericsson is a key driver of open innovation. Without this open innovation, many of the advances in mobile communications that we have come to rely on simply would not have been possible.” —Kasim Alfalahi, Senior Vice President & Chief Intellectual Property Officer, Ericsson



TELECOMMUNICATIONS OVERVIEW


26% Mobile Telephony 74,493 77,477 -4%

25% Data Transmission Networks 71,623 69,614 3%

21%Telephone Subscriber Equipment

60,054 64,760 -7%

9%Digital Information Transmission

25,797 27,053 -5%

9% Telemetry & Telecontrol 25,417 18,437 38%

6% Multiplex & Multiple Access 15,633 16,256 -4%

2% Telephone Communications 6,855 7,003 -2%

2% Telephone Exchange Systems 5,610 5,954 -6%


Top 10 Global Innovators–Telecommunications (2015) Company Country # Inventions


Huawei China 3,496

LG S Korea 2,795

State Grid Corp China China 2,585

ZTE Corp China 1,960

Qualcomm US 1,841

Ericsson Sweden 1,424

Sony Japan 1,129

NTT Japan 1,129

Fujitsu Japan 1,087


Top 10 Mobile Telephony Innovators–Asia (2011–2015) Company Country # Inventions


LG S Korea 8,654

Sony Japan 5,095

Sharp Japan 4,627


Huawei China 4,131

ZTE China 3,998

NEC Japan 3,786

Kyocera Japan 3,661

Fujitsu Japan 3,209


26%

9%

21%

2%2%6%

9%

25%



Top 10 Mobile Telephony Innovators–Europe (2011–2015)Company Country # Inventions

Ericsson Sweden 3,873

Nokia Finland 2,918

Alcatel Lucent (Nokia) France 1,628

Nokia Siemens Finland 733

Sony Ericsson Sweden/Japan 651

Bosch Germany 552

STMicroelectronics Switzerland 471

Orange France 341

Vodafone UK 314

Infineon Technologies German 298


Top 10 Mobile Telephony Innovators–North America (2011–2015) Company Country # Inventions

Qualcomm US 6,534

Apple US 3,576

BlackBerry Canada 2,933

Intel US 2,825

Microsoft US 2,721

Google US 2,571

IBM US 2,083

AT&T US 1,735

Broadcom US 1,590

Motorola US 1,266


Most Impactful Research Institutions in Telecommunications (2005–2015) Name Country # of Papers (WoS) Category Normalized Citation Impact

Rice University US 323 4.68

University of California Berkeley US 792 3.25

University of Texas Austin US 1,130 2.85

New York University US 432 2.77

Swiss Federal Institute of Technology Zurich Switzerland 723 2.76

Carnegie Mellon University US 762 2.70

State University of New York Stony Brook US 339 2.67

Illinois Institute of Technology US 530 2.59

Princeton University US 650 2.53

Microsoft US 700 2.35




Summary

Telecommunications was up 3 percent year-over-year, despite three-quarters of its subsectors declining slightly in activity from the last period. The subsector Telemetry & Telecontrol, which covers measuring, transmitting and receiving apparatus, experienced a whopping 38 percent jump from 18,437 unique inventions at year-end 2014 to 25,417 unique inventions at the close of 2015. All the other subsectors declined between 2–7 percent except for Data Transmission Networks, which was up 3 percent.

Like in the Semiconductor sector, Asian companies lead the top 10 list in Telecommunications innovation with 80 percent of the representation. Samsung (South Korea) takes the most innovative spot, followed by Huawei (China) and LG (South Korea). In addition to the two companies from South Korea and three from China, there are three Japanese organizations and one each from Sweden and the US in the leading 10.

The same three Asian countries comprise the top 10 in the Mobile Telephony subsector, with Samsung, LG and Sony (Japan) taking the top three spots. In Europe, Ericsson, Nokia (Finland) and Alcatel Lucent/Nokia (France) are the three regional innovators, while Qualcomm, Apple and BlackBerry (Canada) are the top three in North America, the former two both from the US.

Samsung truly dominates in Mobile Telephony with 228 percent more activity than the nearest European competitor (Ericsson) and 95 percent more activity than the nearest US competitor (Qualcomm).

The US leads with 90 percent of the most impactful Telecommunications scholarly research organizations, the top three of which are Rice University, University of California Berkeley and University of Texas Austin. The only non-US institution in the top 10 is Switzerland’s Federal Institute of Technology Zurich. It’s worth noting that despite the fact that Asia leads in having the most top innovators in Telecommunications, the leading scholarly research organizations do not hail from there, but rather primarily come from the US. Microsoft is the only corporate organization to make it to the list of most impactful Telecommunications organizations.

“ The Telecommunications space is evolving at warp speed. Clients want faster connectivity. Increased security. Lighter weight gadgets. Global access to the Internet and their content. And so on. It’s the backbone supporting many other industries and market opportunities. 5G is the next frontier to conquer, which will drive an entirely new wave of advancements. It’s an exciting time to be in the space and paving the way for future generations.” —Bob Schukai, Head of Applied Innovation, Thomson Reuters


2016 State of Innovation stateofinnovation.com Conclusion 79REUTERS/CARLO ALLEGRI

“ We can never rest, never let ourselves get comfortable. The world is constantly changing, and those that don’t adapt don’t stay on top for long. That really raises the bar on our teams, and it drives us to think differently about how we bring innovation to life in our markets, or in other words, how we commercialize it.” —John Tracy, Chief Technology Officer, Boeing


2016 State of Innovation stateofinnovation.com Conclusion 80

SOLUTIONS FOR INNOVATION SUCCESS

Derwent Patents Citation Index For identifying possible partners, threats and ways to evolve a technology area

Derwent Patents Citation Index (DPCI) is a value-added citation database with both patent and scholarly literature citations. These trace historical references on which an invention is built, as well as an invention’s impact and future technologies that advance it.

Updated weekly, there are more than 11 million patent families and unique inventions that have been editorially enhanced for following forward and backward citations. With this insight, users can identify potential licensing partners, competitive threats and ways to evolve core intangible assets.

Within Thomson Innovation, DPCI is combined with the Derwent World Patents Index (DWPI) to provide the widest perspective of an invention and its impact and influence.

Derwent World Patents Index For validity and infringement insight, unearthing existing prior art, identifying white space and performing competitive-landscape research

Derwent World Patents Index (DWPI) is the world’s most trusted and authoritative source of global patent information, covering 50 patent-issuing authorities. Bibliographic patent information is translated into English and editorially enhanced to bring clarity to a patent’s true intentions.

A team comprising hundreds of editors, most with advanced degrees in their areas of specialization, incorporate value-added insight alongside original patent content to accurately understand the scope of an invention.

The world’s first and only such patent-search resource, with over 50 years of longevity and trusted by nearly 40 of the world’s patent offices, DWPI is a unique and unparalled resource for patent research.

Web of ScienceFor tracing the development of an area of study and identifying top authors, institutions and publishers while following the citation trail

The Web of Science is the world’s most trusted citation index covering leading scholarly literature. It is the gold standard for research discovery and analytics, including the world’s founding scientific citation database, covering interdisciplinary fields such as the arts, humanities, sciences, and social sciences.

The Web of Science platform is the search and discovery choice for 7,000+ academic and research institutions, national governments, funding organizations and publishing organizations in 100+ countries worldwide.

Thomson InnovationFor turning research results into actionable intelligence and collaborating across the innovation process

Thomson Innovation is the industry’s leading intellectual property intelligence and collaboration platform for global research and analysis. It incorporates patents, scholarly literature and news information, alongside robust reporting, visualization and work-file management tools, making it the most comprehensive patent workflow solution available.

Featuring data from around the world, including the coveted DWPI patent collection, Web of Science content and Reuters news information, Thomson Innovation is a one-stop solution for research and analysis.


stateofinnovation.com

Methodology & ReprintsData in this report was compiled using Derwent World Patents Index®, the world’s most trusted and authoritative collection of editorially enhanced patent information for more than 50 years; and Web of Science, the gold standard for research discovery and analytics, including the world’s founding scientific citation database, covering interdisciplinary fields such as the arts, humanities, sciences, and social sciences.

Special thanks to our partners at STN for their assistance in providing access to DWPI on STN for work done to determine the top assignees in each technology area.

Analysis was conducted by the Thomson Reuters PR & Thought Leadership team, providers of expert insight and analysis for corporations, law firms and governments around the world.

Report author: Laura Gaze, Thomson Reuters Patent researcher: Bob Stembridge, Thomson Reuters Scientific literature researcher: Christopher King

S022449


State of innovation Thomson Reuters 2016

Technology

Transcript of State of innovation Thomson Reuters 2016