Patent-based company-level analytics for thematic investing : clustering companies along their technology profiles

Jaggi, David; Posth, Jan-Alexander; Guderian, Carsten C.

Publication type:	Conference paper
Type of review:	Peer review (abstract)
Title:	Patent-based company-level analytics for thematic investing : clustering companies along their technology profiles
Authors:	Jaggi, David Posth, Jan-Alexander Guderian, Carsten C.
et. al:	No
Conference details:	31st Innovation & Product Development Management Conference (IPDM), Dublin, Ireland, 5-7 June 2024
Issue Date:	6-Jun-2024
Language:	English
Subjects:	Thematic investing; Patent analytics; Technology driven classification; Artificial intelligence
Subject (DDC):	658.1: Organization and finance
Abstract:	In thematic investing, investors rely on long-term trends to detect and subsequently invest in what they assess as innovative companies with promising technologies. The established method for investors is to identify such companies via qualitative assessments or business sector classifications. Due to the established links between innovations, (new) technologies and patents, patent analytics has recently become an information source in thematic investing. However, there seems to be a mismatch between business sector- and technology-based classifications, which potentially affects (1) assessments in which technologies companies are active in and (2) the grouping of companies with supposedly similar technology profiles. With our research, we address these issues by analyzing the patent portfolios of the companies attributed to two Global Standard Classification Standard (GICS) sectors, “Health Care” and “Industrials”. We examine the patent attribution profile vector of the companies in these sector portfolios and compare them via the cosine distance metric to calculate their similarity and use clustering K-Means to group companies of high technological similarity into clusters and compare these to the S&P sector portfolios. Further, we employ artificial intelligence tools to identify names for these newly generated clusters to ease comparability and interpret the results with a Sankey diagram analysis and a network graph analysis. Our results show that the behavior of the sectors differs significantly. The technology profiles in “Health Care” are aligned more closely with the GICS sector definition than in “Industrials”. Moreover, when considering their technology profiles, companies within the “Health Care” sector have a higher degree of similarity to each other compared to companies within the “Industrials” sector. While some sector-cluster attributions are well aligned, others are not. We see a substantial migration of companies between the GICS sectors and our technology-driven clusters. These findings yield implications for various decision-makers involved in thematic investment, including investors, corporate management, and policymakers.
Further description:	The presentation slides are available at the conference website at https://s3.amazonaws.com/amz.xcdsystem.com/DE52A724-B7F9-5299-52604A3263D5412C_abstract_File17846/UploadyourPPTPresentation_179_0520041929.pptx
URI:	https://digitalcollection.zhaw.ch/handle/11475/30890
Fulltext version:	Published version
License (according to publishing contract):	Licence according to publishing contract
Departement:	School of Management and Law
Organisational Unit:	Institute of Wealth & Asset Management (IWA)
Appears in collections:	Publikationen School of Management and Law

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Jaggi, D., Posth, J.-A., & Guderian, C. C. (2024, June 6). Patent-based company-level analytics for thematic investing : clustering companies along their technology profiles. 31st Innovation & Product Development Management Conference (IPDM), Dublin, Ireland, 5-7 June 2024.

Jaggi, D., Posth, J.-A. and Guderian, C.C. (2024) ‘Patent-based company-level analytics for thematic investing : clustering companies along their technology profiles’, in 31st Innovation & Product Development Management Conference (IPDM), Dublin, Ireland, 5-7 June 2024.

D. Jaggi, J.-A. Posth, and C. C. Guderian, “Patent-based company-level analytics for thematic investing : clustering companies along their technology profiles,” in 31st Innovation & Product Development Management Conference (IPDM), Dublin, Ireland, 5-7 June 2024, Jun. 2024.

JAGGI, David, Jan-Alexander POSTH und Carsten C. GUDERIAN, 2024. Patent-based company-level analytics for thematic investing : clustering companies along their technology profiles. In: 31st Innovation & Product Development Management Conference (IPDM), Dublin, Ireland, 5-7 June 2024. Conference paper. 6 Juni 2024

Jaggi, David, Jan-Alexander Posth, and Carsten C. Guderian. 2024. “Patent-Based Company-Level Analytics for Thematic Investing : Clustering Companies along Their Technology Profiles.” Conference paper. In 31st Innovation & Product Development Management Conference (IPDM), Dublin, Ireland, 5-7 June 2024.

Jaggi, David, et al. “Patent-Based Company-Level Analytics for Thematic Investing : Clustering Companies along Their Technology Profiles.” 31st Innovation & Product Development Management Conference (IPDM), Dublin, Ireland, 5-7 June 2024, 2024.