Product Life Cycles and R&D Intensity by Sector (L. Kamran Bilir, 2013)

L. Kamran Bilir (2013),  in an effort to explain how patent law enforcing and product life cycle length affect multinationals’ decision process, created a table (Table below) where the product life cycle length and the R&D Intensity is compared. Normally the product lifecycle is determined by the average retail duration of individual product varieties, however the approach used by Bilir consider the economic durability of an embedded technology. Bilir used the length of time in which a given patent continues to be cited by subsequent patents, considering that if it is still being cited it keeps a certain economic value. Regarding the relationship between the life cycle and the R&D intensity, reasoning would suggest that an industry with a short product cycle length would invest more in R&D in order to be up to date with competition. This R&D intensity and product life cycle length will drive a more complex and dynamic market.  Given the values below, the product life cycle length with Bilir approach and the R&D intensity have a weak correlation (-0.297554). However, its sign is still aligned with the  the inference above; allowing to maintain the initial assumption.

Reference:

[1] L. Kamran Bilir, 2013. Patent Laws, Product Lifecycle Lengths, and Multinational Activity. Department of Economics, University of Wisconsin.