The tiny island country of Iceland has long punched above its weight in innovation, cracking the top 20 countries for per-capita patent applications in 2004. At the same time, its economy and inventors were in the midst of a rapid phase of growth. Since that year the country has gone through one of the most disastrous financial crises in history. Now the government is working hard to bring the economy back to its previous levels of growth, and is doing so by fostering innovation.
The first decade of the millennium saw a drastic increase in the activity of Icelandic inventors. Accounting for patent applications filed both at home and elsewhere by Iceland residents, the number grew from 68 in 2000 to 425 in 2009. It would appear that innovation was not stymied by the bank failure as the peak number came right in the middle of the financial crisis! The growth was driven by “abroad” patents, meaning that inventors in Iceland were looking to protect their products in other countries. In a geographically isolated country like Iceland, this is truly a measure of progress. Patenting in faraway places means that the technology and products at hand are of a certain level of quality that they might be in demand around the world.
For the quality of protection, Iceland had been steadily improving until 2011. What caused the decline is not clear (that level of detail is not printed in the International Property Rights Index annual report), but after the incremental progress of the previous years, it could simply amount to a single-year aberration.
An interesting note: the Iceland Patent Office outsources its much of its IP work to the Danish Patent & Trademark Office. The DKPTO also does work for Turkey and Singapore.
The Ultimate Innovation Economy
Following the financial crisis, the government took on a whole new focus. It created a new ministry devoted to ideas and innovation, and simultaneously many grassroots efforts by inventors and entrepreneurs cropped up. Iceland even crowdsourced its new constitution! This focus on innovation catapulted Iceland to #4 on a BusinessWeek list of innovative countries, and was the subject of many news reports and a SXSW presentation in 2010. All this effort is relatively new. As more years of IP data becomes available, it will become obvious whether or not these policies translate to a vibrant IP economy.
Already a growing patent power, it will be exciting to see how much further Iceland will be able to go with top-down and bottom-up initiatives working in harmony to foster innovation.
For more Developing IP Economies posts, check out our International section.