Impacts of COVID-19 on R&D and Patenting Activities in Japan: Demand shocks, application delays, and patent option value

Author Name YAMAUCHI Isamu (Research Associate, RIETI) / NAGAOKA Sadao (Faculty Fellow, RIETI) / MIYAZAKI Daisuke (Japan Patent Office)
Creation Date/NO. May 2022 22-P-013
Research Project Building innovation capability and incentive: evidence from micro data
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This paper investigates the impact of the COVID-19 pandemic in Japan on R&D and patenting activities. The results show a strong correlation between changes in sales and R&D expenditures across industries, suggesting the importance of demand shocks as R&D drivers under the pandemic. In contrast, the level of the ratio of examination requests for the inventions made before and after the pandemic did not change significantly and the speed of filing such requests accelerated on average. These findings indicate that patenting has significant option value, which could help protect the R&D from negative demand-side shocks. Furthermore, we found that no significant delay in the average timing of patent applications in 2020 even though the pandemic waves significantly affected the individual monthly numbers of applications. Nearly 100% online filing rate in Japan might have helped in this regard. However, international applications from and to Japan based on priority filings (mostly inventions filed before the pandemic) declined significantly due to the pandemic, probably due to additional processing and costs required for these applications.

Published: Yamauchi, Isamu, Sadao Nagaoka, and Daisuke Miyazaki, 2023. "Impacts of COVID-19 on R&D and patenting activities in Japan: Demand shocks, application delay, and patent option value," Resilience and Ingenuity: Global Innovation Responses to Covid-19 (2023), Chapter 9, 121-134.