Switzerland’s Inventor Demographic Could Boost its Global Competitiveness
April 2024 by Dragan Filimonovic and Christian Rutzer
About
The analysis is part of Innoscape. The project is conducted by the Center for International Economics and Business | CIEB of the University of Basel and aims to investigate the Swiss innovation landscape from an economic perspective.
The aging of the workforce is a major challenge. The demographic shift could have a profound impact on how countries innovate. We examine the evolution of inventor demographics across countries and technology fields over the past 30 years. Our results show that Switzerland stands out with a more favorable demographic composition of its inventors than other leading innovation hubs. This raises a number of interesting questions: What factors contribute to this unique demographic structure, and how could Switzerland leverage it to strengthen its position as a global innovation leader?
We’ll start by exploring how the average career age of inventors in Switzerland compares to those in other major countries. By “career age,” we mean the difference between the year in which a given patent was filed and the year in which an inventor filed his or her first patent. Figure 1 unveils a striking trend: While inventors age globally, Switzerland’s inventors age more slowly.
Figure 1: Inventor pools are aging worldwide. But the Swiss are aging more slowly
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Our own calculations of the CIEB based on patent data from PATSTAT. For details, see DATA/METHODOLOGY BOX.One could argue that this is due to the country’s industrial composition, which may be skewed towards technologies that traditionally attract younger professionals. However, as Figure 2 shows, in 2020, Swiss inventors across all major technology fields maintained a lower average age than the global benchmark, indicating that the phenomenon isn’t just about the fields they work in but reflects a genuinely younger inventor demographic. In Information Technology (IT), the age discrepancy between Swiss inventors and their global counterparts is especially stark, suggesting that Switzerland’s IT industry is particularly attractive or accessible to younger talent. In more traditional fields like Chemical or Mechanical Engineering, this age gap somewhat narrows.
DATA/METHODOLOGY BOX: Click here to get more information on the data sources and calculations
In the following, we describe the procedure for calculating the average career age. We use data on docdb patent families from PATSTAT, focusing on patents filed between 1950 and 2020. Career age is defined as the time between the year of patent filing and the first patent ever filed by an inventor. In both cases, we use the priority year of a patent family and the unique inventor ID provided by PATSTAT to track inventors over their careers. Specifically, an inventor’s career age starts at zero in the year of the inventor’s first patent application. For each subsequent patent, the career age is determined by calculating the interval between the year of the first patent and the year of the patent under consideration.
Given the methodology for calculating career age, we need to impose a censoring mechanism on our dataset. We exclude data from earlier years to ensure that the initial career age values are plausible, thus limiting our analysis to patents filed since 1990. Furthermore, to maintain the integrity of our data, we exclude inventor IDs with unrealistic career age values, defined as those above the career age of 50. In addition, to focus on individuals with a demonstrable commitment to innovation, we eliminate inventors with a single patent from our dataset. Assigning inventors to specific countries is facilitated by using PATSTAT records of an inventor’s place of residence at the time of the patent application.
Finally, we calculate the average career age of inventors in a country and year by taking the average of all career ages of patents and inventors in a given year assigned to a country. The results are shown in Figure 1. For Figure 2, we do the same, but aggregate the career ages of patents and their inventors by country, year, and technology field.The trend across technology fields suggests that Switzerland’s markedly younger inventor demographic is not just an incidental result of an industry structure tending toward youth-centric fields like IT. It points to a fundamental characteristic of the country’s innovation landscape, in which immigration may play a key role. The World Immigration Report 2022 highlights Switzerland’s leading position in terms of immigrant population at 29%, followed by other European countries and the United States, which typically have immigrant populations of around 15 percent. This is in stark contrast to the lower rates in Japan, South Korea, and China, which stand at 2.2%, 3.4%, and 0.1%, respectively. These significant differences in immigration rates are also reflected in the aging patterns of the inventor populations. Taken together, these two observations suggest that in Switzerland, as in other Western European countries and the United States, the influx of younger immigrants into the innovation workforce may be contributing to a more gradual increase in the average age of inventors than in countries with minimal immigration.1
Figure 2: Average age shift of Swiss inventors in various technologies lower than global average
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Our own calculations of the CIEB based on patent data from PATSTAT. For details, see DATA/METHODOLOGY BOX.What effects could the less pronounced ageing of inventors in Switzerland have?
Research suggests that as individuals age, their cognitive abilities to generate new ideas may change (see, e.g., Yu et al. 2023 or Belbase et al. 2015). On one side, as inventors get older, they gain more knowledge and experience from their careers. On the other side, they might find it harder to learn new things or process information quickly.
A study by Kaltenberg et al. (2023) looked at US inventors to investigate this change in gains/losses over their careers. They found that aging can have mixed effects: older inventors tend to file more patents, but the quality of these inventions might not be as high. The study also pointed out an interesting aspect about older inventors: they tend to create innovations that extend existing knowledge rather than break radically new ground. They used the so-called CD index, created by Funk and Owen-Smith (2017), to measure whether a patent is rather consolidating (C) or disruptive (D). If an invention has a high CD index, it means it’s quite disruptive. The findings show that older inventors score lower on this index, suggesting their inventions are less likely to shake up the status quo compared to those of younger inventors.
Combining these findings with the demographic trends outlined above leads to two key conclusions. First, the global pattern of an aging inventor population implies a potential decline in breakthrough innovations—a development of particular concern given current global challenges that demand innovative solutions more urgently than ever. Consider, for example, the need for novel approaches to combat climate change, speed up energy transition, remove carbon emissions from the atmosphere etc.
Second, it could also affect the competitive advantage of countries. As we have shown in Figure 1, we see heterogeneous aging trends across countries. This could mean that countries with a more rapidly aging inventor pool may find it increasingly difficult to produce breakthrough innovations in the future. Given that innovation is fundamental to a country’s sustainable competitive advantage, this dynamic could profoundly affect economic performance relative to other countries (Redding, 1999, Grossman and Helpman, 1993, and Porter, 1990). As a result, Switzerland could strengthen its global competitiveness in the coming years thanks to its comparatively favorable inventor demographics.
How can Switzerland maintain the demographic advantage of its inventors?
As we argued before, one reason for Switzerland’s comparatively favorable aging trend of inventors may be due to its higher rate of immigration. The NCCR on the move project shows that more than half of the working-age immigrants in Switzerland hold a tertiary degree. A significant number of these highly educated immigrants likely engage in basic and applied research, playing a pivotal role in enhancing Switzerland’s innovation landscape. This could be a competitive advantage in the coming years. In the long run, therefore, a straightforward solution may be to continue to attract young, talented individuals from overseas, either as students who choose to stay post-graduation or as seasoned professionals. However, with many regions of the world (with the notable exception of Africa) facing aging and shrinking workforces (see, for example, Demografik, last accessed April 10, 2024), this strategy alone may prove unsustainable in the long run, even for a small country like Switzerland.
Instead, it may be crucial for Switzerland to focus on other measures as well. A promising option for Switzerland may be to increase the involvement of its women in inventive roles, where their representation remains significantly low compared to other countries (Niggli & Rutzer, 2021). In addition, Switzerland has a persistently higher attrition rate for women than for men over the course of their inventive careers, also among younger cohorts (Niggli & Rutzer, 2023). Implementing targeted policies to address these disparities could be an additional tool to effectively counteract the aging of Switzerland’s inventor workforce and maintain the country’s innovation leadership.
This article was written using R Markdown, R shiny, and Plotly. The University of Basel’s sciCORE was used to calculate the average career age.