|MORIKAWA Masayuki (Vice Chairman & Vice President, RIETI)
|April 2014 14-J-024
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This paper, using Japanese firm-level data, presents findings about innovative activities in the service sector and the role of patents and trade secrets on innovations. According to the analysis, first, service firms have less product innovations than do manufacturing firms, but the productivity of innovative service firms is very high. Second, service firms have a low propensity of holding patents, but the holding of trade secrets is comparable to that of the manufacturing firms. Third, patents and trade secrets have positive relationships with product innovations, and the effects are quantitatively similar in magnitude both in the manufacturing and the service sectors. On the other hand, a positive relationship between trade secrets and process innovations is found only in the manufacturing sector. These results suggest a pivotal role of the patent system and trade secret law on innovation and productivity growth of the service sector.
The English version of this paper is 14-E-030.