Competition, Patents and Innovation

The roundtable focused on recent theoretical and empirical findings. It addressed the issue of whether competition stifles innovation or promotes it. Although there seems to be no universally-applicable relationship, in many industries moderate levels of competition seem to be most highly correlated with more innovation. A connection between competition and innovation also appears when the national regulatory environment is considered. Empirical studies by the OECD have found a substantial, negative correlation across national economies between the level of anti-competitive product market regulation and innovation. The roundtable also addressed the relationship between patent right and innovation, which varies considerably from industry to industry. Some sectors rely heavily on patents to protect the value of their inventions, while others rely more on alternative means such as secrecy and lead time. Many delegates believe that competition authorities can successfully collaborate with patent agencies to improve the patent process.