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Better Bang for the Buck?

Just as the scorecard spotlights cases like Incyte’s in which patents and technological strength are rising, it raises the alert for companies whose numbers are mixed or have fallen. In the automotive sector, General Motors is up 12 percent in tech strength in 1999 compared to its previous five years but slipped 4 percent in patent numbers.

Vice president for R&D and planning Larry Burns says GM has made no major policy changes that would account for the patent downturn. But the CHI figures can be broken down by specific categories. This detailed analysis shows significant falloffs in patenting in such areas as motor vehicle parts and machinery over the past five years. These declines are not totally offset by gains in other areas-including a whopping 600 percent rise in telecommunications patenting, where GM now claims more than 200 inventions. The pattern fits with Burns’ strategy of focusing on hot growth areas and integrating technologies from several fields-and not on creating individual components.

A prime example is OnStar, which combines telecom with computer systems to track cars and enable drivers to get directions or even order flowers. GM expects to see the service in one million vehicles this year. “We judge our innovation success not just by counting patents, not that we ignore that,” Burns says. “We really measure ourselves in terms of how well we prepare the company for the future.”

3M is another company that has seen some erosion in the quantity of patents. And along with its 14 percent drop in patent numbers comes an estimated 17 percent falloff in technological strength, although even with that decline it ranked second in the chemical industry, behind only Procter & Gamble. At the same time, 3M’s science linkage improved some 50 percent-an indication that in concert with its improved focus, the company is working closer to the cutting edge.

Case in point: the company’s advances in multilayer optical films, which are being applied to everything from PalmPilot screens to decorative bows, ergonomic lighting and temperature control for offices and cars, and even fiber optics. Since the first key breakthroughs in 1993, researchers have filed roughly 140 patent applications around this technology-covering its basic composition, functionality and uses. Officials estimate that in the next five years, this field-nonexistent at 3M less than a decade ago-could account for more than 10 percent of company sales, a figure that could reach as high as $2 billion annually.

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