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Signals for emerging Technologies in Paper and

Packaging Industry

The original paper under the same name by M.Karvonen & T.Kässi published in

internet, publishing pending

•The International theretical and practical conference •”THE XXXIX WEEK OF SCIENCE AND ACADEMIC RESEARCH AT SPBPU” •Lecture by Professor Tuomo Kassi

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Themes of presentation

• 1) Introduce one special case of technological change concept of convergence the stage of convergence

• 2) Provide insights to the future competition between paper/printing and electronics How technological competencies are evolving in

convergent environments

• 3) Using patent data in the industry analysis

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Using patent data in industry analysisAdvantages and

OpportunitiesLimitations and

Challenges

- Include citations to previous patents and to the scientific literature

- Possibility too study spill-overso evaluate the value of innovationso evaluate the “originality” and “generality”

of innovations- Possibility (regardless of the challenges)

to integrate data with other complementary information (financial data, alliance data etc.)

- Highly detailed information on the invention- Homogenous measure of technological novelty

and available for long time series- Largely available stock of patents- Data contained in patents are supplied in

voluntarily basis

- Not all innovation are patentedo not meet patentability criteriao strategic decision to patent vs. other means

of approbriability- Inter-industry and inter-firm differencies in

the propensity to patent - Filing patents under different names (eg.

subsidiaries) - Differences across countries in economic costs

and benefits of patents- “Truncation“ problem (especially forward

citation data)

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Types of convergence and evolutionary phases

Substitutes Complements

Technology-based

convergence

Product-based

convergence

Technology

substitution

Product

substitution

Product

complementary

Technology

integration

Supply Side

Technological

Convergence

Knowledge

Technology

Applicational

Industry

Demand Side

Product

Convergence

•Adapted Stieglitz, 2003; Hacklin, 2008

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Types of convergence

Industries/Firms(Supply)

Needs(Demand)

Technology

ConvergingMarkets

ComplementaryConvergence

CompetitiveConvergence”Coopetitive

paradigm”

”CooperativeParadigm”dominating

”Substitutiveparadigm” dominating

”Established vs. Entrants”

Examples of convergent developments (book ch.)

•Pulp and paper industry

•Process engineering, chemicals,•logistics

•Information technology

•Electronic tagging, identification, •item intelligence

•Intelligent

•packaging

•Paper/printing industry

•Mechanical engineering (R2R), •material development, chemicals

•Electronics industry

•Silicon electronics, display •technologies

•Printed

•intelligence

•Telecom industry

•Messaging, radio, phones

•Camera technology

•Optics, precision, processing•Camera

•phones

•Food industry

•Food, beverages, catering

•Life sciences

•Medicals, drugs, biotechnology•Functional

•foods

•Adapted Hacklin, 2008

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Convergence process

IndustryA

IndustryB A B

Before convergence

AB

Industry convergence

A BAB

?

After convergence

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Phases of convergence

Scientific/knowledge convergence

Distinct scientific disciplines beginningto cite each other and collaborate

Possible indicators:

Scientific articles; Science dominated emergence

Technology convergence

Distance between applied science andtechnology development decreases

Patent data and literature; Technology dominated emergence

Market/applicational convergence

New product-market combinations

General (business) media

Industry convergence

Fusion of firms or industry segments

Application dominated emergence

Market dominated emergence

•Curran & Leker, 2008

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Patent classification, the IPC system- Hierarchical classification system of technologies- 8 sections- 120 classes- 628 sub-classes- approximately 70000 subdivisions (main groups

and subgroups)

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Example of patent classificationG06K19/067; H05K3/38

“The present invention relates to a label to be attached to a surface, the label comprising a transponder. The label comprises a non-adherent flap which contains the transponder. The invention also relates to a web comprising a backing web and labels, and to a system comprising a surface and a label...”

Section Class Sub-class Group

G 06 K 19/00

19/067

main group

sub-group

Section G Physics

Class G06 Computing; calculating; counting

Sub-class G06K Regognition of data; presentation of data; record carriers; handling record carriers

Main group 19/00 Record carriers for use with machines and with at least a part designed to carry digital markings

Sub-group 19/067 ... with conductive marks, printed circuits or semiconductor circuit elements, e.g. credit or identity cards

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Patents and citations

•

Time

Generation -1

Backward citations/Citations made

Generation 0 Generation +1

Patent

Patent

Patent

Patent

Patent

Patent

Patent

Patent

Forward citations/Citations received

Citing Cited

Knowledge spillovers Value of innovations

Citations and future competition

Patents

Patents

Patents

Patents

Patents

Citing”Backwards”Self-

citations

Withinindustry

Beyondindustry

Patents

Patents

Patents

Patents

Cited”Forwards” Self-

citations

Withinindustry

Beyondindustry

Generation 0Generation -1 Generation +1

- Self-citations indicating CAPABILITY- Distinguishing within and cross-industry citations

- External citations within industry COMPETITION-External citations beyond (cross-industry) DIVERSIFICATION

Citations and future competitive area

“Within industry” “Beyond industry border”

“Convergence beyond industry border”

Backward citations

Spill-over within industry

Spill-over from extra industry

Spill-over effects from extra industry increases

Self-citation Capability developmentin own fields

Capability diversification

Gradual capabilitymerging

External citation Competition Diversification Diversification to the new fields

Forward citations

Value of within industry inventions

Value of beyond industry inventions

Value of technology

Self-citation Core competence Competence in new fields

“Strategic duality”

External citation Technology dominance within industry

Technology dominance in new fields

Value of within and beyond industry technology

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Upstream Electronics Players-26

Downstream Software Players-17

Paper and Printing Players-18

Vertically

Integrated

Electronics

Players-23

Data from PATSTAT

We analyzed the RFID value chain

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Empirical analysis: DescriptivesIndustry /

IPC groupPaper & Printing

(N=18)Upstream electronics

(N=26)Vertically integrated

(N=23)Downstream players

(N=17)

Patent count 1978-2006

77 963 124 184 218 560 43 518

TOP50 IPC (%/all)

84.7% 87.6% 91.7% 98.0%

I Electrical engineering- Electronics & electrics (1,5,8)- Computer & Communication

(2,3,4,6,7)

22.3%

(7.2 %)(15.1 %)

80.8%

(46.1%)(34.7%)

88.7%

(24.3%)(64.4%)

95.8%

(2.2%)(93.6%)

II Instruments- Optics- Measurement- Control

16.5%(13.4%)(1.8%)(1.2%)

16.2%(4.7%)(5.4%)(5.4%)

6.9%(3.3%)(2.5%)(1.1%)

3.3%(0.4%)(1.1%)(1.8%)

III Chemistry - Macromolecular chemistry,

polymers- Basic material chemistry- Surface technology, coating

18.5%

(3.9%)(2.8%)(11.4%)

0.5%

--

(0.5%)

1.6%

(0.5%)-

(0.8%)

0.0%

---

IV Mechanical engineering- Handling- Paper machines- Other special machines

41.4%

(15.0%)(20.7%)(5.7%)

2.5%

(0.8%)-

(1.2%)

2.9%

(0.4%)(2.1%)(0.4%)

0.9%

(0.2%)(0.4%)

-

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Paper/printing patents distribution

Paper & Printing firms patents distribution 1978-2006 (N=18)

0 %

20 %

40 %

60 %

80 %

100 %

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Electricalengineering

Instruments

Chemistry

MechanicalEngineering

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Citations made (”backwards”) Industry /

IPC group

Paper & Printing (N=18)

Upstream electronics

(N=27)

Vertically integrated

(N=24)

Downstream players (N=18)

Citations made

42 743

212 010

381 655

66 768

Citations (average) 0.55 1.71 1.75 1.53

TOP50 IPC (%/all)

76.9% 85.9% 85.3% 93.9%

Self citations

- Within industry - Beyond industry

4232 (9.9%) 70.4% 29.6%

16006 (7.5%) 85.4% 14.6%

48319 (12.7%) 89.8% 11.2%

5736 (8.6%) 95.1% 4.9%

External citations - Within industry - Beyond industry

38 511 (90.1%) 63.1% 36.9%

196 004 (92.5%) 82.7% 17.3%

333 336 (87.3%) 84.1% 15.9%

61 032 (91.4%) 90.7% 9.3%

Focusedresearch

Cabability diversication

Knowledge spill-overdiversication

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Citations received -”forwards”

Industry /

IPC group

Paper & Printing (N=18)

Upstream electronics

(N=27)

Vertically integrated

(N=24)

Downstream players (N=18)

Patent count (citations received)

56,237 214,670 657,072 70,900

Citations received (average)

0.72 1.73 3.01 1.63

TOP50 IPC (%/All)

75.1% 84.1% 87.2% 95.3%

Self-citation count (%)

- Within industry - Beyond industry

4,740 (8.4%)

71.4% 29.6%

21,530 (10.0%)

86.0% 14.0%

70,051 (10.7%)

89.3% 10.7%

7,704 (10.9%)

95.8% 4.2%

External citations - Within industry - Beyond industry

51,497 (91.6%) 59.0% 41.0%

193,140 (90.0%) 79.9% 20.1%

587,021 (89.3%) 84.6% 15.4%

63,196 (89.1%) 91.9% 8.1%

New fieldsCapabilitydevelopment

Traditional fieldscapabilities

Market power

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Paper & printing firms forward citations

Patent distribution, forward citations

0 %

20 %

40 %

60 %

80 %

100 %

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Electricalengineering

Instruments

Chemistry

Mechanicalengineering

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Paper & printing self citations

PPI sef citations, forward

0 %

20 %

40 %

60 %

80 %

100 %

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Other

Electrical eng.

Instruments

Chemistry

Mechanical eng.

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Patents and citations of converging areasIndustry /

IPC groupPaper & Printing

(N=18)Upstreamelectronics (N=27)

Verticallyintegrated

(N=24)

Downstream players (N=18)

Patents (IPC4)

1978–2006

Computer technology 15,314 44,196 175,965 55,915

Audio-visual technology 18,958 21,720 82,857 8,099

Semiconductors 12,065 126,732 131,428 767

Optics 30,999 14,457 21,619 375

Citations made/patent

(average) 1978–2006

Computer technologySelf-citations (%)

0.37(8.3%)

1.61(8.6%)

1.18(21.4%)

1.36(5.6%)

Audio-visual tech. Self-citations

0.62(10.3%)

2.51(5.4%)

1.82(13.1%)

3.25(1.6%)

SemiconductorsSelf-citations (%)

0.59(5.6%)

2.10(9.5%)

1.83(15.9%)

3.60(1.3%)

OpticsSelf-citations (%)

0.47(16.0%)

2.19(6.2%)

2.10(9.8%)

3.33(2.9%)

Citations received / Self-citations (%)

Computer technology 0.55(5.2%)

1.73(10.0%)

2.24(14.8%)

1.41(12.8%)

Audio-visual technology 0.86(8.7%)

1.98(7.7%)

3.05(9.2%)

2.41(5.1%)

Semiconductors 0.82(4.0%)

1.89(13.3%)

3.19(11.9%)

5.99(1.8%)

Optics 0.63(10.3%)

1.88(7.2%)

3.44(5.9%)

3.39(6.8%)

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Computer technology patents

0 %

20 %

40 %

60 %

80 %

100 %

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Downstream

Integrated

Upstream

paper &printing

Forward citations; computer technology

0 %

20 %

40 %

60 %

80 %

100 %

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Downstream

Integrated

Upstream

Paper & printing

Computer technology, citations made

0 %

20 %

40 %

60 %

80 %

100 %

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Downstream

Integrated

Upstream

Paper & printing

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Case: Paper/printing and electronics

PaperIndustry

ElectronicsIndustry

”CompetitiveConvergence”

”ComplementaryConvergence”

Substitution effectsdominate

1978 2000 2018

Complementary / Substitution effects(# Technological Convergence)

ElectronicsIndustry

2008

”PaperElectronics”

PrintedIntelligence/

RFID

PaperIndustry

Complementaryeffectsdominate

”Spill-overeffects”

Value chaindeconstruction/ disintegration

Consolidation /Vertical integration

- Value chain reconfiguration- Incentives for collaboration (alliances, joint ventures, mergers)- Competence-enhancing

- New players (offensive)-Incentives for defensive vertical and horisontal mergers- Creative destruction andbusiness model collision- Importance of complementary assets (Electroninics industry)- Horisontal integration

Value chain convergence

PATSTAT Central Database

•APPLICATION

•Classes

•Applicants / •Inventors

•Publications•Citations

•Prioritities

•Families

•- Application Authority•- Application number•- Kind of application•- Filling date of application •- Type of intellectual • property rights•- Title of application •- Abstract of application

•- Applicant / Inventor name•- Applicant / Inventor address- Applicant / Inventor country code•- DocDB standard name

•- Identification of claimed priority•- Identification of designating • international application•- Identification of parent application•- Identification of technically • related application

•- IPC classification symbol•- National classification symbol

•- Publication Authority•- Publication number•- Publication kind •- Publication date

•- Identification of cited patent publication•- Cited non-patent literature text•- Category of the citation•- Origin of the citation

•INPADOC•legal status

Disscussion & Conclusions• Summary

– Assessment of overlapping technologies of distinct industries on the basis of patent data– Exemplary results (citations made and received) demonstrate partial convergence between

paper/printing and electonics industries– If monitoring can be achieved automatically from the patent data and without expert

knowledge, then should be interesting for also analysing other industry settings

• Limitations– Mostly evaluating technology development in ”converging environments”– Difficulties to combine IPC citations analysis and market evolution directly – Choice of database important– Country and industry spesifics need to be taken account

• Future views– If independent firm and technology field analyses, search-term, could be conducted from

patent data, approach should be unique - at least to our knowledge – Further testing of IPC-based analyses and possible proxies for convergence– Analyses of other areas of potential convergence

Disscussion & Conclusions

Knowledge spillovers from electronics to paper & printing firms suggests that industries are becoming more technologically convergent (backward citations)

- Challenging to evaluate exact competitive consequences only based on patent data– Paper & printing companies play a part in the competition (coopetition) with

electronics fields ( Complementary convergence)– Will paper/printing players come tomorrows electronic giants?– Business models collision in next 3-5 years?– Mergers and aqcuisitions of giant electronics industry players?

- Using patent and citation data in industry analysis

– Possibility to get an idea of the stage and effects of convergence phenomenon– Recognising trends early important– Patent and citations analysis can help

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