Rewarded for Past Performance, Not for Potential

In the world of innovation, a patent is irrefutable proof of value that should guarantee recognition to its creator. However, analyzing data for male and female inventors reveals a more nuanced reality.

Together with my colleague Karin Hoisl of the University of Mannheim, I conducted a study covering over 10,000 inventors in 22 countries. What we discovered reveals that there is a substantial difference between rewarding a past achievement and betting on a person's future potential. And such difference is correlated with the gender of the person who patented the invention.

The data we were able to process show that, when it comes to a “one-off bonus,” i.e. a cash prize rewarding a specific past invention, there's no significant gender gap. For the same invention, women are just as likely as men, if not more likely, to receive that kind of bonus. The market, or rather, the company, willingly pays for what it's already gotten. It's a backward-looking calculation: value produced is then rewarded.

The problem is the salary gap

The problem arises when we consider permanent rewards, namely salary increases and job promotions. Here, women are systematically disadvantaged. Even when producing inventions of equivalent quality, female inventors are 2.3% less likely than their male colleagues to see that success translate into career or salary advancements. This might seem like a small difference, but on a baseline probability of 6.9%, it represents a significant disadvantage, approximately 30%. 

Why does this happen? Because raises or promotions aren't just rewards for a job well done; they represent bets on the future. They are "forward-looking" incentives that signal the company's belief in an employee's potential to generate value tomorrow, or have leadership skills (in research) in the future. And it's where gender disparity emerges, confirming the economic literature suggesting that men are often evaluated on the basis of their potential, while women are evaluated on their consolidated results. Signals coming from female performance are perceived as more "noisy," more difficult for executives to interpret, often due to gender stereotypes or the simple scarcity of female role models in top positions.

The Case of Unplanned Inventions

However, there's one aspect of our research that offers a further perspective. We've isolated cases of "unplanned inventive activity," that is, inventions born out of serendipity or sudden inspiration, not the result of structured research projects to which the inventor was assigned. Well, in these cases, the female disadvantage in permanent rewards disappears. This tells us that the problem arises, at least in part, from the process of selecting and allocating male and female inventors to research projects with different characteristics and potential. Women are likely assigned to (or self-select themselves for) less "visible" or risky projects, those that offer fewer springboards for career advancement. When the "project assignment" factor is missing, female talent is recognized as much as male talent.

Why Letting Potential Go Unrecognized Is A Waste

If women get only one-off bonuses but no structural salary increases, the gender pay gap widens exponentially over time, since any future raise will be based on a lower base salary. Furthermore, failing to recognize potential means wasting human capital, thus risking demotivating and losing brilliant female inventors.

Transparency in bonuses, therefore, is not enough. It's necessary to critically examine the awarding of prizes for inventions and, above all, take a step back and examine the process of allocating people to ambitious research projects.