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Finland is the world's most innovative economy. So here's the secret! To patent or not to patent? An innovation-level investigation of the propensity to patent This study seeks to shed new light on the complex relationship between patents and innovations that has remained extremely elusive thus far. This study seeks to shed new light on the complex relationship between patents and innovations that has remained extremely elusive thus far. The objective of the present study is to contribute to our understanding of which innovations are patented - and which are not - by analyzing the patenting decision for circa 800 Finnish innovations. The data sample of 791 Finnish innovations used in the study is drawn from the Sfinno database compiled at VTT Innovation Studies (formerly VTT Group for Technology Studies). In an effort to compile the Sfinno database, a systematic review of 18 carefully selected trade and technical journals from the period 1985-1998 has been complemented with a review of annual reports of large firms from the same period as well as with expert opinion-based identification of innovations. Since the Sfinno approach heavily relies on public sources in the identification of innovations, it is clearly more conducive to studying product than process innovations. Hence innovations only developed for the firm's internal use are not included in the Sfinno database. The results show....first,...that larger, i.e. more novel and significant, innovations are patented more frequently than smaller ones. Second, technologically very complex innovations appear to be patented less often than others, while the fragmentation of intellectual property rights to cumulatively developing technology seems to entail high propensities to patent (Very iNTERESTING) . Third, the results indicate that the propensity to patent varies across technology classes and declines with product market competition. Fourth, collaboration with scientific institutions appears to have a positive impact on the propensity to patent, while the estimations fail to produce evidence that public R&D support or collaboration with other types of partners would affect the propensity to patent. Finally, there appears to be a U-shaped relationship between firm size and the propensity to patent, which can be attributed to a relatively large extent to economies of scale in the patenting activity as well as to the relatively important role of patenting in start-up ventures. The "

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