Product Development Innovation Productivity Is Declining (.PDF Download)

Over the past decade numerous studies and research efforts have consistently found that R&D productivity, a synonym for efficiency, is declining—across all industries. Indicators come from a number of sources across several different domains.

Eroom’s Law: From our daily life experience, many of us have already heard about the woes of the pharmaceutical and biotechnology industries. The decline is so prolific that a study published by Nature coined a new law, “Eroom’s Law.” Eroom’s Law is the opposite of the well-known Moore’s Law, which describes the geometric growth of computing power over time. Thankfully, the Eroom trends are not as alarming in other industries.

Intellectual Property Indicators: Patents are one measure of innovation productivity. Thomson Reuters’ 6th State of Innovation Report in 2015 showed a slowing in the growth of global patent filings from 20% in 2012, to 17.7% in 2013, to 3.3 % in 2014. The absolute number of filings is increasing, but the growth is slowing. Thomson spun out Clarivate Analytics and their 8th State of Innovation Report in 2017 showed growth at 8%. The news is possibly better in the U.S. and Europe. China now accounts for six of every 10 patented inventions and has slowed disproportionately.