Modelling of technology lifetime based on patent citation data and segmentation

Stakeholders faced with decisions on whether or not to invest in Research & Development (R&D) are increasingly in need of R&D supporting information. As such, the social demand for reliable methods to collect and assess such data continues to grow. In terms of technology appraisal and valuation, the economic life span is a particularly important factor that affects the size of the profit resulting from that technology. Here, we propose a new methodology for quantitatively estimating the technology lifetime based on patent citation data and segmentation. Using the proposed methodology, we are able to estimate the mean or median patent lifetime at both the technology group level and the individual patent level. The estimated technology lifetime may be used as an index for supporting decision‐making on strategic investments related to R&D activities and for managing technology throughout its lifecycle, including R&D planning, development, and application. We have applied the proposed methodology to US patent data for the period 1976–2004 for four communications areas.