Innovation in times of Covid-19

Torsten Heinrich and Jangho Yang
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Torsten Heinrich: Department of Economics and Business Administration, Chemnitz University of Technology
Jangho Yang: Institute of New Economic Thinking at the Oxford Martin School, University of Oxford

No 58, Chemnitz Economic Papers from Department of Economics, Chemnitz University of Technology

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.

Keywords: Innovation; Covid-19; Patent applications; Technological change (search for similar items in EconPapers)
JEL-codes: I18 O31 O32 O33 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2022-12
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Published in Chemnitz Economic Papers, December 2022, pages 1-23

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https://www.tu-chemnitz.de/wirtschaft/vwl1/RePEc/d ... /CEP058_Heinrich.pdf First version, 2022 (application/pdf)

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