5 Clusters matter

Innovative activity is not evenly distributed within countries. It largely follows the concentration of industrial activity. Consequently, patent data is helpful data in identifying regional industrial strengths (clusters). The advantage over other types of data is that patent data is available for concrete locations (the address of the applicant), with a narrowly categorised technology description (the IPC code).

Innovation in technologies is clustered in only a few regions

Figure 5.1: Inventor locations of patent applications, Note: The concentration of low-carbon research activity in particular countries/regions appears even stronger than in the RTA maps. This is mainly because before we plotted the specialisations (RTA) of countries, which implies that a country can be good at a certain low-carbon technology even if it does not produce many patents in this technology class, just because it does produce very little patents overall (so its specialisation in this low-carbon technology is nevertheless high), Source: Bruegel based on EPO PATSTAT (EPO 2016).

Innovation in individual technologies is typically clustered in only a few regions. Regional clusters of patenting activity in certain technology areas are not just a result of clustered industrial activity. They also point to innovation spillovers (the most fascinating example being Silicon Valley).

Figure 5.2: Geographic distance to cited patents, Source: Bruegel based on EPO PATSTAT (EPO 2016).

The four technologies benefit from different types of knowledge-spillovers. We can observe important technological clusters for batteries and solar panels, while this is less evident for electric vehicles and wind turbines. Solar panels represent the technology with the highest geographical concentration of citations.

At the same time, solar PV and electric vehicles are more relying on related technologies while batteries and wind turbines mostly cite patents within the same technological class.