Innovation and Revenue: Deep Diving into the Temporal Rank-shifts of Fortune 500 Companies

TL;DR

This paper investigates the dynamic relationship between innovation activities, measured through patent metrics, and the revenue rankings of Fortune 500 companies over time, revealing key trends and causal insights.

Contribution

It provides a comprehensive analysis of patent-related parameters and their correlation with company rankings, offering new insights into innovation-revenue dynamics over time.

Findings

Patent applications and citations correlate with Fortune 500 ranks.

Trends in patent metrics vary over years, indicating evolving innovation strategies.

Causal explanations for patent activity shifts are proposed.

Abstract

Research and innovation is important agenda for any company to remain competitive in the market. The relationship between innovation and revenue is a key metric for companies to decide on the amount to be invested for future research. Two important parameters to evaluate innovation are the quantity and quality of scientific papers and patents. Our work studies the relationship between innovation and patenting activities for several Fortune 500 companies over a period of time. We perform a comprehensive study of the patent citation dataset available in the Reed Technology Index collected from the US Patent Office. We observe several interesting relations between parameters like the number of (i) patent applications, (ii) patent grants, (iii) patent citations and Fortune 500 ranks of companies. We also study the trends of these parameters varying over the years and derive causal explanations for these with qualitative and intuitive reasoning. To facilitate reproducible research, we make all the processed patent dataset publicly available at https://github.com/mayank4490/Innovation-and-revenue.