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This paper examines the potential application of trademarks as a complementary
indicator of innovation. Recent innovation literature finds a correlation between
innovation and usage pattern of trademarks. Especially for the service
industry this new approach offers potential since R&D and patents indicators
do not capture innovation in these sectors. To understand the relationships
between trademarks and innovation the German pharmaceutical and ITservice
industries were studied. As a proxy for innovation sales and employment
growth were introduced. The impact of filing a trademark was then compared
with a control group and correlations with patents examined. The results
show that trademarks indeed can be used as an indicator of innovation;
however, with some limitations. While IT-service companies show a strong
relationship between trademarks and growth, the results for the pharmaceutical
industry are ambiguous and need to be further examined.