Environmental policy and the direction of innovation towards products or processes: Insights from text mining techniques applied to wind power patents

In the framework of the European Green Deal, which aims to steer research and innovation toward climate neutrality, this article studies the extent to which different types of policies (direct and/or indirect) supporting renewable sources of energy can guide research and development (R&D) efforts toward process or product innovations. To this end, it proposes a new method for automatically analyzing whether a patent is a product or a process. More precisely, it proposes a semantic analysis of patent documents that generates a continuous measure of the patent’s relative position between product and process. This allows several limitations of the economic literature to be overcome, and provides insights into the mechanisms at work, notably how the use of these new techniques can help optimize environmental policies. This methodology is applied to the wind power industry, emphasizing the non-neutrality of renewable support policies in driving innovation.JEL classification: O31, C81, C89.