Innovation in times of Covid-19

Heinrich, Torsten and Yang, Jangho (2022): Innovation in times of Covid-19.

Abstract

Did the Covid-19 pandemic have an impact on innovation? Past economic disruptions, anecdotal evidence, and the previous literature suggest a decline with substantial differences between industries. We leverage USPTO patent application data to investigate and quantify the disturbance. We assess differences by field of technology (at the CPC subclass level) as well as the impact of direct and indirect relevance for the management of the pandemic. Direct Covid-19 relevance is identified from a keyword search of the patent application fulltexts; indirect Covid-19 relevance is derived from past CPC subclass to subclass citation patterns. We find that direct Covid-19 relevance is associated with a strong boost to the growth of the number of patent applications in the first year of the pandemic at the same order of magnitude (in percentage points) as the percentage of patents referencing Covid-19. We find no effect for indirect Covid-19 relevance, indicating a focus on applied research at the expense of more basic research. Fields of technology (CPC mainsections) have an additional significant impact, with, e.g., mainsections A (human necessities) and C (chemistry, metallurgy) having a strong performance.

• Item Type: MPRA Paper
• Language: English
• Keywords: innovation; Covid-19; patent applications; technological change
• Subjects: I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy ; Regulation ; Public Health; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O32 - Management of Technological Innovation and R&D; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes

References

Agarwal, R. and Gaule, P. (2022). What drives innovation? lessons from covid-19 r&d. Journal of Health Economics, 82:102591.

Alexopoulos, M., Lyons, K., Mahetaji, K., and Chiu, K. (2021). Evaluating the disruption of covid-19 on AI innovation using patent filings. In 2021 IEEE International Symposium on Technology and Society ISTAS), pages 1–6. IEEE.

Amore, M. D. (2015). Companies learning to innovate in recessions. Research Policy, 44(8):1574–1583.

Archibugi, D., Filippetti, A., and Frenz, M. (2013). Economic crisis and innovation: is destruction prevailing over accumulation? research Policy, 42(2):303–314.

Arrow, K. (1962). Economic Welfare and the Allocation of Resources for Invention, pages 609–626. Princeton University Press.

Bachmann, P. and Frutos-Bencze, D. (2022). R&d and innovation efforts during the covid-19 pandemic: The role of universities. Journal of Innovation & Knowledge, 7(4):100238.

Berkes, E., Deschenes, O., Gaetani, R., Lin, J., and Severen, C. (2020). Lockdowns and innovation: Evidence from the 1918 flu pandemic. Working Paper 28152, National Bureau of Economic Research.

Bloom, N., Davis, S. J., and Zhestkova, Y. (2021). Covid-19 shifted patent applications toward technologies that support working from home. AEA Papers and Proceedings, 111:263–66.

Brem, A., Nylund, P., and Viardot, E. (2020). The impact of the 2008 financial crisis on innovation: A dominant design perspective. Journal of Business Research, 110:360–369.

Brem, A., Viardot, E., and Nylund, P. A. (2021). Implications of the coronavirus (covid-19) outbreak for innovation: Which technologies will improve our lives? Technological forecasting and social change, 163:120451.

Dahlke, J., Bogner, K., Becker, M., Schlaile, M. P., Pyka, A., and Ebersberger, B. (2021). Crisis-driven innovation and fundamental human needs: A typological framework of rapid-response covid-19 innovations. Technological Forecasting and Social Change, 169:120799.

Florio, M. (2021). Patents for covid-19 vaccines are based on public research: a case study on the privatization of knowledge. CIRIEC International, Université de Liège Working Paper, (WP2021-03).

Florio, M. (2022). To what extent patents for covid-19 mrna vaccines are based on public research and taxpayers’ funding? a case study on the privatization of knowledge. Industrial and Corporate Change, 31(5):1137–1151.

Gaudry, K. and Gianola, A. (2020). Technology-specific patent filing trends during the pandemic. ipwatchdog.com. https://www.ipwatchdog.com/2020/11/01/technology-specific-patent-filing-trends-pandemic/id=126901/.

Gross, D. P. and Sampat, B. N. (2021). The economics of crisis innovation policy: A historical perspective. AEA Papers and Proceedings, 111:346–50.

Guderian, C. C., Bican, P. M., Riar, F. J., and Chattopadhyay, S. (2021). Innovation management in crisis: patent analytics as a response to the covid-19 pandemic. R&D Management, 51(2):223–239.

Han, H. and Qian, Y. (2020). Did enterprises’ innovation ability increase during the covid-19 pandemic? evidence from chinese listed companies. Asian Economics Letters, 1(3).

Huber, P. J. (1973). Robust regression: Asymptotics, conjectures and monte carlo. The Annals of Statistics, 1(5):799–821.

Jarque, C. M. and Bera, A. K. (1980). Efficient tests for normality, homoscedasticity and serial independence of regression residuals. Economics letters, 6(3):255–259.

Kim, B., Kim, E., Miller, D. J., and Mahoney, J. T. (2016). The impact of the timing of patents on innovation performance. Research Policy, 45(4):914–928.

Lafond, F., Greenwald, D. S., and Farmer, J. D. (2020). Can stimulating demand drive costs down? world war ii as a natural experiment. INET Working Paper 2020-02, University of Oxford.

Nelson, R. R. (1959). The simple economics of basic scientific research. Journal of Political Economy, 67(3):297–306.

Sampat, B. N. and Shadlen, K. C. (2021). The covid-19 innovation system. Health Affairs, 40(3):400–409. PMID: 33539184.

Seabold, S. and Perktold, J. (2010). statsmodels: Econometric and statistical modeling with python. In 9th Python in Science Conference.

U.S. Patent and Trademark Office and European Patent Office (2017). Guide to the cpc (cooperative patent classification), revision 4.00.Available online, https://www.cooperativepatentclassification.org/publications/Miscellaneous, Accessed 27 Dec 2022.

Wen, J., Wang, S., Yang, X., and Zhou, X. (2022). Impacts of epidemics on innovation: An empirical analysis. Technovation, page 102634.

Yamashita, N. (2021). Economic crisis and innovation capacity of japan: Evidence from cross-country patent citations. Technovation, 101:102208.

Yoon, C. (2021). How does covid-19 affect digital innovation and transformation? KDI School of Pub Policy & Management Paper SSRN, (4054290).

Zerhouni, W., Nabel, G. J., and Zerhouni, E. (2020). Patents, economics, and pandemics. Science, 368(6495):1035–1035.