How “Open” is Innovation in the US and Japan?: Evidence from the RIETI-Georgia Techinventor survey

John P. Walsh (john.walsh@pubpolicy.gatech.edu)
School of Public Policy, Georgia Institute of Technology
Sadao Nagaoka (nagaoka@iir.hit-u.ac.jp)
Institute of Innovation Research, Hitotsubashi University1

May 15, 2009
ABSTRACT
While individual inventors are key to technological progress, it is becoming increasingly
necessary for inventors and their firms to exploit information and capabilities outside the firm inorder to combine one’s own resources with resources from the external environment. To better
understand the collaborative process in inventions, we collected detailed information on a sampleof triadic patents, focusing on the invention process, sources of ideas, and collaboration (theRIETI-Georgia Tech inventor survey), with over 1900 responses from the US and over 3600
responses from Japan. Our results suggest that in both countries, just over 10% of inventions
involved an external co-inventor and about 30% involved external (non-co-inventor)
collaborators (with the rate of collaboration somewhat higher in Japan). Cross-organizational coinventions increase as firm size declines, especially in Japan. In both countries, verticalcollaborations (both co-inventions and other collaborations) with users and suppliers were themost common. The most important knowledge sources were similar in the two countries: patents,
customers, publications, and information from other parts of the firm, although their relative
rankings varied somewhat. In particular, patent literature is a relatively more important
information source in Japan and scientific literature is relatively more important in the US. Since
our evidence suggest that inventors see literature globally, such difference does not seem to be
driven by the difference of the disclosed literature (for an example, more early patent disclosurein Japan) as suggested by earlier literature but by that of the incentive and capability of theinventors. While in both countries most R&D funding is provided internally, venture capital andgovernment funding play a greater role in the US than in Japan, with venture capital funds
especially important for the smallest US firms. On the other hand, industry funding plays agreater role for university researchers’ inventions in Japan. There is some evidence that “openinnovation” through collaborations enhances not only the technical significance of the invention,
but also the probability of its commercialization through, for an example, vertical collaboration
facilitating better matches between the needs of customers or the capabilities of suppliers.

1

We would like to thank Alfonso Gambardella, Dietmar Harhoff, Wesley Cohen, Akira Goto, Kozo
Oikawa and Masahisa Fujita for the advice and support to the inventor surveys in Japan and the US. We
would like to thank for the comments we received at the RIETI international conference and seminar,
including those by Richard Nelson, Bronwyn Hall and Fumio Kodama, as well as at the International
Schumpeter Association Meeting in Brazil 2008. We would like to thank for the invaluable administrativeand research assistance by the RIETI staff and for the excellent research assistance by Naotoshi Tsukada,
Wang Tingting, Hsin-I Huang, Taehyun Jung, Yeonji No and YouNa Lee.

1. Introduction
While individual inventors are key to technological progress, it is becoming
increasingly necessary for inventors and their firms to exploit information andopportunities outside the firm in order to combine one’s own capabilities and resources
with those from the external environment. While such collaborative innovation strategies
have been sometimes considered a hallmark of the Japanese innovation system(Branstetter and Sakakibara, 1998), increasingly, the US system is seen as moving toward
an open innovation model (Chesbrough, 2003). Thus, inventing is increasingly seen as acollaborative activity. Furthermore, the conditions under which firms organize theirinvention process, the extent to which they collaborate with other organizations, and theiruses of extramural sources are all expected to differ by country and by technology sector.
To better understand the invention process, we collected detailed information on a sampleof patented inventions, focusing on the invention process, sources of ideas, andcollaboration. The data come from a unique set of matched surveys of US and Japanese
inventors of triadic patents (the RIETI-Georgia Tech inventor survey). We have over1900 responses from the US and over 3600 responses from Japan, stratified over the 2
digit NBER technology classes.
Using these data, we develop a detailed narrative of the invention process in the US
and Japan. We focus on the extent to which invention is an open/collaborative activity,
similarities and differences across the two countries, and how the process varies byindustry and by organization type. Our results suggest that invention draws heavily onoutside sources and is often a cooperative activity. In addition, we find that the invention
process, and especially, the degree of inter-organizational cooperation, is broadly similar
across the two countries, much more similar than we might expect based on bibliometric2data such as patent co-assignment for the US (Hagadoorn, 2003, Hicks and Narin, 2001).
In addition, we find that collaboration tends to enhance the value of an invention and thechance of commercialization, in particular, through increasing the exploitation of external
information.
2. Data and Method
There has been substantial empirical work on inter-organizational cooperation,
especially, that on the invention process. Much of this work uses patent document datasuch as co-inventorship, co-assignee, or citations, as measures of cooperation and uses ofoutside information (Narin, et al., 1997, Hicks, 1993, Hagedoorn, 2003, Hicks and Narin,
2001, Jaffe, et al., 1993). Another stream of research uses licensing data, joint ventures
or formal R&D collaborations or consortia as the measure of cooperative innovation,
generally collecting data from government documents, press releases and similar archival
sources (Arora, et al., 2001, Branstetter and Sakakibara, 1998, Sakakibara, 2002). While
this work has provided important insights into the relations between collaboration andinnovation, these data sources have important limitations, the most important of which isthat they depend on a formalized codification of the cooperation and information flows.
However, informal cooperation may be an important component of cooperative R&D andof uses of outside information (von Hippel, 1988, Sattler, 2003). In addition, firms may
generate codified information that only weakly reflect the underlying activities. For
example, inventions that involve inventors from multiple organizations might be assigned
to a single organization in order to simplify the property right (Hagedoorn, 2003, Fontana
and Guena, 2008).

3In order to capture this broader notion of cooperative R&D and information flows
in a comprehensive manner, we make use of a recently conducted inventor survey in the
US and in Japan. These survey data allow us to collect information on information flows
and on R&D cooperation that does not depend on the existence of a publicly accessible
formal agreement or codified information (such as a co-assigned patent, publicly
announced cooperative R&D project or citation to a prior patent or publication). The
design of our survey questionnaire, while depending on the recently implemented
European inventor survey (PatVal survey, see Giuri, et al. (2007)), adds new dimensions
such as distinguishing vertical and horizontal collaborations, which allows us to analyze
the collaboration in R&D from new perspectives (see the Appendix 1 for the key aspectsof the survey method). The data come from a survey of inventors on triadic patents(patents filed in Japan and the EPO and granted by the USPTO), We received data on
over 3600 Japanese inventions (21% response rate, 27% after adjusting for ineligible,
undeliverable, etc.). We also received responses from over 1900 US inventors (24%response rate, 32% adjusted).2 For details of the survey, see Appendix 1. Because ofdifferences in the technology sector composition in each country, when we report overall
2

For the US data, comparing respondents and non-respondents based on bibliometricindicators found few differences that were either statistically or substantively significant.
In particular, measures of collaboration (solo inventions: 27% for respondents, 26% for
non-respondents; average number of inventors: 2.71 for respondents, 2.80 for nonrespondents), links to universities (citations to non-patent literature: 2.4 for respondents
v. 2.7 for non-respondents) and measures of patent value (forward citations: 2.2 forrespondents and 2.4 for non-respondents) are all similar (none are significantly different,
p<.05 [though some significant at .10], N=7933). The only significant differences arethat inventors for which we only had a company address are less likely to respond (4% of
respondents had a company address v. 6% for non-respondents, p<.001) and thoseinventors with more patents are more likely to respond, although the absolute differenceis quite small (an average of 1.18 triadic patents for respondents, 1.13 for nonrespondents, p<.001).

4

averages, we weight each country’s responses by the (inverse) of the relative common
frequency (the average of the US and Japanese frequencies) of that NBER technology
class, so that that differences in the overall averages are net of the compositiondifference. However, when we do detailed breakdowns within country (for example,
comparisons across firm size classes, or types of projects), we use the unweighted
averages, since here the focus is on within country differences.
We asked respondents to tell us about a specific patented invention (named on the
cover of the survey). For the target invention, we asked the surveyed inventor how many
inventors are on the patent, and which type organization each of the inventors works for(supplier, customer, university, etc.). These were recoded as a set of dummy variables
with a value of one if there was an external co-inventor from that type of organization,and zero otherwise. We also asked if, in addition to co-inventors, there were any formal
or informal collaborations and what types of organization these collaborators represent.
Again, these were recoded as a set of dummy variables representing types of external
collaborators. We also asked how important various sources of information (publisheddata, patents, information from customers, suppliers, universities, etc.) were forsuggesting the project and for contributing to completion of the project. We asked thesources of finance for the R&D projects yielding the invention. We also asked theinventor for an estimate of the economic value and (for the US survey) the technologicalsignificance of the patent. We also asked whether the invention is commercialized either
through internal use, license or startups. We will use these measures to analyze thecollaborations in the creation of inventions in each country and across different sectors
and their effects.

5Table 1 gives basic descriptive statistics for our sample. We see that about 80% of
the inventors are employed in large firms (over 500 employees), with somewhat morelarge firm inventors in Japan (84% v. 77%). The US sample contains more inventors
from very small firms (less than 100 employees), with about 12% of the US inventors(versus 5% of Japanese inventors) from very small firms. Only 2% of the inventors on
triadic patents are from universities, with little difference between the US and Japan. We
also find that about 90% of the inventors in each country have at least a college degree,with 45% of the US inventors having a doctorate (12% for Japan). The average age of
inventors in Japan is just under 40, while in the US, the average age is 47 years old. Five
percent of the US sample is female, compared to less than 2% in Japan.
3. Co-invention, Co-assignee and Collaboration
Cooperative R&D can take many forms, including co-inventing (which has a legal
meaning and can affect the validity of a patent), co-assignment (which involves sharing
the property right in the invention) (Fontana and Geuna, 2008) and informal or formal
collaboration but less than co-invention and co- assignment,. Bibliometric measures ofco-assignment capture only one of these forms (Hicks and Narin, 2001, Hagedoorn,2003). We can use our inventor data to estimate the relative incidence of different typesof cooperative R&D.
Co-invention and Co-assignee
First, we compare the size of the research teams in each country. We find that the
average Japanese patent has 2.78 inventors and the average American patent has 2.71.
Thus, we see very little difference in the size of inventor teams in each country. Figure 1
gives the percent of solo inventions overall and by firm size. Again, we see that these are6very similar across the two countries, with about 30% of the inventions having a single
inventor, and the rates of solo inventions being very similar across firm sizes, except for
the very small firms, which have higher rates of solo invention in both countries (about
40%).
Figure 2 gives the percent of external co-inventions (that is, co-invention with ainventor affiliated with an external organization), by country, and broken out by theorganizational affiliation of the co-inventors. We see that, in both the US and Japan,
about 13% of triadic patents have an external co-inventor. However, when we examine
the patent documents, we find that while about 10% of these patents (10.3%) have coassignees in Japan, less than 2% of US patents (1.8%) have co-assignees (consistent withprior work on US patents by Hagedoorn, 2003 and Hicks and Narin, 2001, and on
European patents by Giuri, Mariani, et al., 2007). For the US data, we find that coassignment is higher (in the range of 5-6% of patents) in drugs, biotech 3 andsemiconductors. In Japan, co-assignment in these technology classes is close to theoverall average. On the other hand, in Japan, co-assignment is highest in earth moving
equipment, agriculture/food/textiles, measuring/testing instruments, receptacles, andsurgical/medical devices, all of which have no co-assigned patents in the US sample. A
closer examinations of the ownership structure shows that in Japan one third of the coassigned patents are jointly owned by the parent and subsidiary firms, partiallyaccounting for its high frequency of co-assignment. In addition, in the US, a coassignee
can freely license his right to use the invention to a third party, while in Japan a coassigned patent can be licensed only if all co-assignees agree. These findings suggest that3

Consistent with the findings of Hicks and Narin (2001).
7

there may be important country-level institutional differences in the drivers of coassignment of patents, such as more diffused ownership of patents within a group of
related firms in Japan. This finding requires additional research to uncover what aspects
of invention lead to a co-assigned patent.
Figure 2 also shows that, in both countries, vertical links (to suppliers andcustomers) are most common among all types of co-inventors. If we add the coinventions either with suppliers or with the users, they amount to more than 7% (9%) in
Japan (the US). In the US, these vertical links (with both customers and suppliers) aremost common in materials handling and measuring/testing patents, while in Japan, resins
patents tend to have above average vertical linkages. Materials processing patents in the
US also tend to have above average rates of collaboration with competitors, noncompetitors in the same industry, and with universities, suggesting that this industry, inparticular, has embraced open innovation. Co-inventions with university inventors
represent about 2.5% in each country. Co-invention with competitors or others in thesame industry is rare, each accounting for about 1% of patents.
Figure 3 gives the rates of having any external co-inventor, by firm size with which
the inventor is affiliated. We see that it decreases with firm size, which is consistent witha view that the efficiency gain for combining internal and external resources is larger fora smaller firm, given its more limited internal resource. The rate of external co-invention
is much higher for Japanese SMEs than for American4, even though the rate of multiinventor patents is very similar. The most important driving force for high incidence of
external co-inventor is vertical linkage as shown in Figure 4. Here we see that, in Japan,
4

Even if we focus on the sample without co-applications between parent and subsidiaries
in Japan, the incidence of external co-inventions is substantial for SMEs in Japan.
8

co-inventions with suppliers and customers are most common for small firms. In the US,
however, the rate of co-invention with suppliers or customers is largely the same acrossfirm size. Since co-invention in SMEs is only slightly more common in Japan (see Figure1), what this fact suggests is that if they co-invent, the invention is more likely to be withan external inventor (compared either to large firms in Japan or to similar sized US
firms). On the other hand, there is only a small cross-national difference in the rates ofmulti-inventor patents and in the rates of external co-invention for large firms. In fact,
external co-invention is slightly more frequent in the US than in Japan (see Figure 3).
Collaboration other than co-inventions
If we expand our definition of cooperative R&D to include formal and informal
collaborations other than co-invention, we find even more cross-organizational
cooperation. As shown in Figure 5, overall, 23% of US patents and 28% of Japanese
patents involved collaboration with members of outside organizations. Since there are no
significant overlaps between co-inventions and the formal and informal collaborations
other than co-invention, almost 40 % of the inventions involve external capabilities on
the average (somewhat higher in Japan than in the US). Thus, invention is a very open
process and co-inventions data significantly underestimate the actual R&D collaborations.
Again, most of these formal and informal collaborations are with suppliers (10-15%) andcustomers (about 7-9%). In both countries universities were involved in about 4% of
inventions. And, again, firms report very little horizontal cooperation in both countries.
Even if we add co-inventions and formal or informal collaborations, the sum adds up
only to 1-2% of the inventions, which is a very small share. Difficulty of managing R&D
collaboration among competitors may account for very low incidence of horizontal

9

collaboration (See Nelson and Winter (1986) for the difficulty of monitoring the activities
of competitors and prevent free-riding, especially in R&D). It is also possible thatconcerns about anti-trust regulations may have dampened either the activity or thereporting of the activity, or both. Interestingly, while Japan is often viewed as engaging
in substantial amounts of cooperative R&D (through consortia and other suchmechanisms), there is virtually no difference across the two countries in the amount ofcollaboration with competitors (coinvention or the other collaboration) or noncompetitors in the same industry.
Co-inventions and collaborations with university researchers by sectors and by firm
size
Universities and government labs are seen as playing a key role in facilitating
innovation, especially in the US context (although recent reforms in Japan have focusedon encouraging Japanese universities to play a more active role in technology transfer,
see Walsh, et al., 2008). Figure 6 gives the detailed breakdown of the incidence ofuniversity co-invention by technology for 12 major sectors. The level and the pattern isvery similar between the two countries. We see that in both Japan and the US, biotech is
the most active in terms of university co-invention, with 19% of biotech patents having auniversity co-inventor in Japan and 14% in the US. Drug patents are also especially likely
to have university co-inventors (9% in Japan, 7% in the US). Note that in both cases,
Japan and the US have approximately the same rate of university-industry links. Besides
these two, in Japan, organic compounds has an above average rate of university coinvention (6%), while in the US, material handing patents are above average with about
6% of patents having university co-inventors.

10Figure 7 gives the results for cross-organization inventions between firms anduniversities, by firm size. While we might expect large firms to have closer links touniversities, we find, on a per-invention basis, university co-inventors tends to increase as
firm size declines, except for very small firms and are most common in small firms (100250 employees) in both countries. In the US, the rate of university co-inventors forstartups (less than 100 employees and less than 5 years old) is 2.3% (about the same as
overall average). If we compare formal or informal collaboration other than co-invention,
we get a similar picture. Collaboration tends to increase as firm size declines, as shown in
Figure 8. It is the SMEs, especially the smallest Japanese firms, that are most likely tocollaborate with universities (on a per-invention basis). Thus, although the US is wellknown for its university-industry links, and the strength of its small firm sector, our datashows that very small firms are more likely to co-invent or collaborate formally or
informally with university researchers in Japan than in the US, although startups based onuniversity inventions are far more active in the US (see Nagaoka and Walsh (2009b)).
4. Sources of Information
In addition to cooperative R&D and external funding, we are also interested in theextent to which inventions draw on outside sources of information, the role thisinformation plays in the invention process, and whether the information is coming frompublished sources or through personal channels. We asked our respondents to tell us how
important were each of several sources of information for suggesting the research that led
to the patented invention. In addition, we asked how important these sources were forcontributing to the completion of the research (cf., Cohen, Nelson and Walsh, 2002). The
information sources were scientific and technical literature, patent literature, fairs or

11exhibitions, technical conferences and workshops, standards documents for literaturesources, and your own firm (excluding co-inventors), universities, government researchorganizations, customers or product users, suppliers, competitors (for example, by reverse
engineering) for non-literature sources. Each source was rated on a 0 to 5 scale, from“did not use” to “very important”. Figures 9A and 9B summarize the results, showing
the percent of respondents that rated each source as important (4 or 5) for suggesting the
project and then for contributing to project completion.5 While Japanese inventors seemto make much more use of outside sources than do American inventors, we should becautious in interpreting these results in this way, since there are significant country
differences in the distribution of the responses of the US and Japanese inventors over the
choices on a Likert Scale.6 In order to avoid the risk of mis-interpretation, we will docross country comparisons of the relative rankings of the different sources of information.
We find that the patent literature is more important than the scientific literature in
Japan, where the importance is reversed in the US, and that this is true for bothsuggesting new projects and contributing to project completion.

These results are

consistent with prior work (Cohen, et al., 2002a) that finds that the Japanese firms rely
more heavily on the patent literature than do American firms. The question is why. While
Cohen, et al., 2002a emphasize the difference of the usefulness of disclosed patent
literature due to the difference of patent system between the two countries, such as first to
file in Japan vs. first to invent in the US, the automatic disclosure in 18 months in Japan
vs. disclosure upon grant in the US, our research suggest that the main explanation would

5

Note that these percentages include “did not use” in the denominator.
As shown in the appendix 2, the Japanese inventors choose 4 significantly more often
than the US inventors.

612

be found more in the difference of the capability or the incentive of the inventors to use
patent and scientific literature than in the difference of the disclosed literature between
the two countries. The Japanese inventors appreciate foreign scientific or patent literaturesignificantly more than domestic science and patent literature, as shown in Figure 10. Our
survey does not limit the scope of the literature to domestic literature and the Japanesesurvey specifically asked the relative evaluation of the domestic and foreign science
literature, finding that 49% of the inventors regard them equally important and 34%
regard foreign literature more important and 17% regard domestic literature more
important. The corresponding shares for patent literature are 53%, 30% and 17%7. Thus,
we have some evidence that inventors in both countries are looking at the same scientific
literature (US patents and US/international publications), suggesting that the differencesin the uses of this information may be due to the incentives and capabilities of inventors
in each country.
One credible explanation for higher appreciation of scientific literature relative topatent literature in the US than in Japan is the greater share of PhDs among US inventors,
and hence a greater familiarity and absorptive capacity for scientific literature. Figure 11
shows the uses of patents and of scientific literature, by country, broken out by educationlevel of the inventor. We find that those with PhDs, in both countries, are more likely to
use the scientific literature, supporting the above interpretation. However, we also findthat, within education classes, Japanese respondents rely more (or, at least as much) on
patents than publications, for all education levels except PhDs. In the US, we find the
opposite, with inventors of all education classes relying more (or, at least as much) on
7

If we focus on the inventors who see patent or science literature very important ( thehighest score in the Likert Scale), the difference in favor foreign literature is much larger.
13

publications than patents for all education classes except for those with only a highschool education. Thus, the difference in the relative uses of patents versus publications
does not seem to be solely due to the differences in education levels across countries.
Another related explanation is that the Japanese R&D focuses relatively more on
improvement of existing inventions than on “pioneer” patents. Such R&D would makeinventors study more closely the existing patents. Consistent with this view, scientific
literature is more used in the R&D projects for seeds creation and for new business thanthose for existing business both in Japan and the US.8 In addition its usefulness is moreclosely related to the high performance of the R&D project in terms of the value of theinvention and the number of patents from the project than that of patent literature is inJapan. 9 That is, there are not many high value patents when patent literature is very
important for the conception of the inventions. One additional explanation might be the
US penalties against “willful infringement” (treble damages), which might discourage
inventors from examining rivals’ patents lest they be accused of knowingly infringing.
There is also some evidence that Japanese authors of science and technical literature are
more likely to withhold important competitive information from their publications thanare American authors (Walsh and Huang, 2007), although the Japanese inventors
appreciate foreign science literature more than domestic science literature as pointed out
above.
In both countries, the scientific literature is more important for drug, biotech, andorganic compounds inventions. Again, this result is consistent with prior work that has
shown that these industries are especially close to science (Cohen, et al., 2002b). In both89

See Nagaoka and Walsh (2009).
See Nagaoka and Walsh (2009).
14

countries, compared to patents and publications, other public sources (conferences,
standards documents and trade fairs) are relatively less important. However, trade fairs
are relatively more important in Japan, on par with technical conferences, while in theUS, technical conferences are much more important than trade fairs.

Standards

documents are relatively more important in the US (ranking above trade fairs), while inJapan, they are the least important of the public sources.
When we turn to non-literature information source by kind of organization, we findthat the most important source of information, in terms of percent giving a“high” score to that source (4 or 5),10 both for suggesting projects and contributing tocompletion, is the inventor’s own firm. In both countries, the second most importantsource is customers/users. Again, these results are consistent with prior surveys of R&D
managers (Cohen, et al., 2002a). In Japan, information from competitors (for example,
from reverse engineering) is almost as important as information from customers, while
US inventors report less use of this knowledge source (note that collaboration with
universities is not different across countries). Universities are relatively more importantin the US, ranked at about the level of suppliers or competitors (for suggest), while inJapan, these industry sources are ranked much more highly than university research. In
both countries, however, drug and biotech inventions tend to rely most heavily on
information from universities (while customers are considered a less important source inthese sectors). Thus, while university inventors, university co-inventors and university
collaborators are about equally likely in both countries, the US relies (relatively) more on

10

If we focus on the response of the highest score, patent literature and users are more
important than own firm in Japan and science literature is more important than own firmin the US.
15

universities as sources of information (beyond the published literature). In both countries,
customers or competitors are relatively more important for suggesting projects than forcontributing to completion, while for suppliers the reverse is true. This suggests aninnovation process where research problems come from contact with customers or
observations of competitors, while solutions come from interacting with suppliers, whichis consistent with the view of how an open innovation model works (Chesbrough, 2003,
von Hippel, 1988). Competitors are especially important (for both suggesting projects
and contributing to solutions) in motors and material handling machines in Japan, but notin the US. On the other hand, in the US, the inventors in drugs and medical devices ratecompetitors as especially important, but this is not true in Japan. In the US, we find amodest correlation at the technology class level between the use of the patent literatureand the importance of competitors as the sources of information, r=.39. In Japan, there islittle correlation (r=.06), in part because patents and competitors are both so widely used.
5. External Funding of R&D
Another form of inter-organizational cooperation in the innovation process isthrough external funding of research projects. A firm may raise external funds that are
specifically tied to an R&D project. We asked our respondents to give the breakdown, in
percentage terms, of the project funding across sources, including own firm, government,
other companies, customers, suppliers, and venture capital/angel funding. Figure 12
gives the results (with percentages of funding from different sources, weighted by thesize of the project, measured in man-months). While the vast majority of funds comefrom the firm (about 90% in each country), we find that US inventions get slightly more
funding from the government (5.2% v. 2.4%) and also more from venture capital (3.3%16v. 0.2%). Government funding is most common in the biotech sector, with over 15% offunding for biotech projects coming from government funding, both in Japan and the US.
Other sectors in the US with significant (10% plus) of the funds coming from government
funding are semiconductors, drugs and power systems. In the US, venture capital funding
is most common in medical devices (11%). Communications and software get about 4%of their funding from venture capital. Biotech and drugs in the US get only about 2-3% of
their funds from venture capital. In Japan, even these sectors get 1% or less of theirfunds from venture capital.
（Figure12）
Table 2 gives a more detailed breakdown of funding, by organization type (again,
weighted by project man-months). Here we see that venture capital funding is mostcommon in the US very small firm sector, with 18% of the funding for firms with lessthan 100 employees coming from venture capital. University-based projects in the US
received about 6% of their funds from venture capital. Outside these sectors, there is very
little VC money even in the US. In Japan, almost no sector gets significant (even 1%)
amounts of its funding from VC sources. We also see greater government funding in the
US. SMEs in the US get 4-6% of their funding from the government, with the money
distributed across all three classes of SMEs. Even the largest firms in the US get about
3% of their funding from the government. In Japan, on the other hand, government
funding is more likely in the smallest firms.
We can also use these data to examine industry funding of university research(which is another aspect of open innovation, see Chesbrough, 2003). Here, we find thatindustry funding of university inventions accounts for 9% of US university invention

17

funding (roughly comparable to the 6-7% funding coming from industry money that NSF
reports during this period, NSF, 2008). In Japan, about 22% of funding comes fromfirms, including those from users and suppliers. If we compare the incidence of getting
any money from industry, we find that about 10% of US university-based projects got
some industry money, while 39% of inventions by Japanese university-researchers got
some industry money. Thus, industry sponsorship of university invention-oriented
research is about twice as much in Japan in terms of the share of university funding, but
four times more frequent in Japan. In Japan, much of this might have taken the form ofdonations or other informal or semi-formal sponsorship of research projects which are notwell counted in the official statistics of industry funding of university research (Kneller,
1999, Walsh, et al., 2008). Note that (in both countries) the number of university
researchers includes faculty who are participating in industry projects (for example, as aconsultant or in collaborative research) that resulted in an invention that the included theprofessor. We also find that 83% of these university researchers’ inventions in Japan are
not assigned to the university, consistent with this system of industry sponsorship leading
to professors (or seconded researchers) transferring their inventions to firms before therecent incorporation of Japanese universities11. Even in the US (which has long had asystem of professors’ inventions being assigned to their universities), we find that 36% ofprofessor inventions are not assigned to their university (cf. Thursby, et al., 2009, where
they find that 26% of professor patents were not assigned to the university). Thus,
studies of university-industry linkages based on university-originated licenses are likely

11

The incorporation of the Japanese national universities in 2004 has increased the shareof patents assigned to Japanese universities.
18

to significantly under-estimate the amount of collaboration between university personnel
and firms, especially in Japan.
6. Collaboration, Patent Value and Commercialization
Our results suggest substantial collaboration in producing these triadically patented
inventions. Much current work on innovation strategy emphasizes collaboration amongfirms as a key to successful innovation (Chesbrough, 2003, Arora, et al., 2001).
Collaborative inventions draw on a wider knowledge base and so should be of higher
value. They should also be more commercializable since collaboration enables a better
match between available technology opportunities and the user needs for the invention.
And yet, multiparty collaboration creates significant barriers to success (Walsh andMaloney, 2007, Cummings and Kiesler, 2007), including higher coordination costs,
communication barriers (distance and cultural barriers, lack of shared understanding),
information asymmetry and free rider problem (Nelson and Winter, 1982) anddisagreements over invention and innovation strategy. Thus, we have offsetting
predictions about the likely outcome of collaborative inventions. Using our survey data,
we will examine the relation between collaboration, patent value and commercialization.
We envisage the following simple model accounting for these relationships. Here q
is the technical significance of the invention, θ is the level of matching of the invention
for market requirements, Pr is the probability of commercializing the invention either
through internal use, license or startups, EV the (expected ) value of the patent and v forthe value of the invention once commercialized.
q = f (Collaboration, Information, Controls )(1)

Pr = g (q,θ (Collaboration, Information), Controls ) (2)19EV = Pr(q,θ ) × v(q,θ ) = h(Collaboration, Information, Controls ) (3)Thus, collaboration can affect the (expected) patent value though affecting the technicalsignificance of the invention (q) as well as the commercialization probability, which
depends both on the technical significance of the invention and on the level of matchingof the invention for market requirements ( θ ). We evaluate these channels by estimating
the above equations: the technical significance equation, the commercialization
probability equation and the (expected) economic value equation in a reduced form. We
control for technology class (6 broad classes), firm size (three classes), inventor humancapital (PhD or not), and project size and type (whether it is an upstream invention fromthe project dedicated only to basic or applied research, not development).

Collaboration and technical Significance of the invention
We begin with models predicting the technical significance of the invention, where
we expect that collaboration is associated with higher technical significance.

Wemeasure the technical significance of patents, using the survey item that asked theinventor, compared to other inventions in his field during the same year as the patented
invention, how he rated the technical significance of the invention, compared to othertechnical developments in his field in his home country that year (this item was notincluded in the Japan survey).12 We asked the inventor to rank his invention as being
either in the top 10%, top 25% but not top 10%, top half but not top 25%, or bottom half.

12

For Japan, we estimated an equation, for which technical significance was measured
by the number of forward citations received from the references by the inventors in thetechnical description of the inventions. However, most explanatory variables, except for
man-months, are found to be insignificantly related to this measure of technicalsignificance.
20

We focus on the collaboration in terms of the heterogeneity of those with whom theinventor (or the team of inventors) had a formal or informal (non-co-inventor)
collaboration for the research, where heterogeneity in this case is an index of the types ofexternal organizations with which the inventor collaborated (supplier, customer,
university, competitor, etc.). In Japan, almost 30% of the inventions made by theinventors affiliated with firms involve such collaborations, 80% of which involve a single
type of collaborating organization (see Table 3) and the rest involve more heterogeneoussets of organizations. In the US, 23% involve some collaboration, with 34% involving
multiple external partners. Thus, while collaboration is somewhat more common in
Japan, multiple collaborators are more common in the US.13 This measure reflects theimportance of bounded rationality in research, constrained search model of information
access (Simon, 1947, Nelson and Winter, 1982, Cohen and Levinthal, 1990), where, inthis case, the search space is structured by the position of an organization in an
organizational field (DiMaggio and Powell, 1983). Each type of organization (focal firm,
suppliers, customers, universities, etc.) has better access to certain types of informationand more difficulty getting unmediated access to other types of information (due to its
localization, its tacit nature, or the limited absorptive capacity of the focal firm for thattype of information). Therefore, collaboration with other kinds of organizations forresearch can increase the richness of the search space, and therefore the probability of ahigh-value discovery (Nelson and Winter, 1982). In order to identify the effects of two
main sources of collaborations (vertical collaborations and collaborations with

13

For co-invention, only 10% of patents with external co-inventors involved more than
one external partner, while in the US, 25% of external co-invention involved multiple
partners.
21universities), we also tested models using the dummy variables for these two types ofcollaborations. We also test for co-inventor collaborations (any external co-inventor anda heterogeneity index). Since our argument depends in part on the information accessprovided through collaboration, we also measure the effects of the use of external
information to suggest projects to see if that explains some of the effects of collaboration.
Based on a factor analysis of our information sources, we create three indices, one
measuring information flows from other firms (customers, suppliers, competitors); onefor patents and publications; and one for universities, government labs and standards
documents. We also control for the inventor having a PhD or not, as well as number ofman-months used by the project, firm size (large and very small, with medium/small as
the excluded category), technology class (one digit NBER classes).
Table 4 shows the results of an ordered logit regression predicting the technicalsignificance of the patent for the US We find that inventions that were based on a moreheterogeneous collaboration (more kinds of organizations represented) are ofsignificantly higher technical significance (1% significance), on average (controlling fortechnology class, firm size, inventor human capital, and project size and type). This result
is robust to our other measures of collaboration (any collaborator, any external coinventor, heterogeneity of co-inventors). When we add the use of outside information, we
find that the effect of collaboration decreases, and that information from universities andgovernment labs has a significant effect on the technical significance, while informationfrom spillovers from other firms (customers, suppliers, competitor) does not have asignificant effect on technical significance, controlling for other predictors. Finally,
inventors with PhDs are associated with inventions with greater technical significance.

22

Part of the influence of published literature is picked up by the PhD dummy variable.
Dropping this variable increases the effect of publications/patents. Also, the averageinvention for very small firms is of higher significance, while for large firms, the average
is of lower significance.

“Open v. Closed” Innovation for Commercializing the Invention
Open innovation implies both openness in the invention process and in thecommercialization process. In another paper, we examine the incidence of in-licensing
and out-licensing of inventions (Nagaoka and Walsh, 2008). We find that the overalllevel of commercialization is quite similar between Japan and US, although the licensing
is more active in Japan and the startups are more active in the US.
As noted above, we have offsetting predictions on the effects of collaboration oncommercialization, net of the higher value such patents are likely to have. On the one
hand, they may benefit from more customization of the invention process due to better
match between technological opportunities and the user needs and fine-grained
information transfer that can facilitate commercialization. On the other hand,coordination costs, transaction costs and disagreements about how best to develop atechnology may retard commercialization. Thus, we are left with the empirical questionof how open innovation in the invention process relates to commercialization of thatinvention.
If we look at the predictors of whether or not the invention was commercialized asfunction of the level of collaboration (Table 5), we find that, in both the US and Japan,
controlling for the technical significance of the invention (the level of inventor citation
for the Japanese patents), vertical collaboration has a positive effect. This effect is

23

attenuated somewhat when we add information flows, although still there is a significant
positive relationship between vertical collaboration and the likelihood of the invention
being commercialized for the US. In Japan, it is not significant. For commercialization,inter-firm spillovers have a strong positive effect, while the use of published literatureand patent information has a negative effect on commercialization. These results suggestthat vertical collaboration increases the chance of commercialization through customizing
the type of invention as well as the other collaborative mechanism , net of the technicalsignificance of the invention. This may be due to the links between, for example,
customers and suppliers allowing a ready market for the technology.
Technical significance has a significantly positive effect on the probability ofcommercialization as expected. The dummy of the upstream invention (which is purebasic, pure applied research or the combination of the two, i.e., no development) has asignificantly negative coefficient, which is not surprising since such research likely
requires additional R&D before commercialization. Phd has a negative coefficient(probably due to a selection effect due to Phds working on project that are more upstream
even net of the upstream dummy). Man-months has a positive coefficient on thecommercialization possibility.

Collaboration and value of the patent
We then test models using self-reported economic value as the measure of patent value,
which would reflect the effects of collaboration both on the technical significance and thecommercialization probability. We use the survey item that asked the inventor, comparedto other inventions in his field in his home country during the same year as the patented
invention, how did his patent rate in terms of economic value. We asked the inventor to24

rank his invention as being either in the top 10%, top 25% but not top 10%, top half but
not top 25%, or bottom half.
Table 6 shows the results of an ordered logit regression predicting the economic
value of the patent for the US and Japan.14 We find that inventions that were based on amore heterogeneous collaboration (more kinds of organizations represented) are on
average of higher value (1% significance for Japan and not quite significant (p<11%) for
the US), controlling for technology class, firm size, inventor human capital, and projectsize and type). This result is robust to our other measures of collaboration (anycollaborator, any external co-inventor, heterogeneity of co-inventors). When we
introduce separate dummies for vertical collaborations and for collaborations with
universities, we find that in Japan the coefficient of university collaboration is twice aslarge as that for vertical collaboration. In the US, we find a similar difference (althoughneither coefficient is significant). When we add the use of outside information, we findthat the effect of collaboration decreases, and that information from universities andgovernment labs has a significant effect on the economic value of the patent, consistent
with the above findings, while information from spillovers from other firms (customers,
suppliers, competitor) does not have a significant effect on economic value, controllingfor other predictors. We do see that the information spillovers from other firms have apositive correlation with the economic value in the US, consistent with the effects oncommercialization probability (but not in Japan). Use of information from patents and14

We would expect the measure of economic value to be less closely related to
information sources (heterogeneity and uses of outside information), since economic
value is likely a combination of the technical significance of the invention and also suchfactors as demand characteristics, competitive conditions, complementary capabilities,
strength of patents, and other factors that influence the ability of a firm to generate rents
from its inventions.
25

publications is also not associated with higher value patents. Finally, inventors with
PhDs are associated with inventions with greater economic value. Part of the influence of
published literature may be picked up by the PhD dummy variable. Dropping thisvariable increases the effect of publications/patents somewhat. Also, the averageinvention for very small firms is of higher economic value, while for large firms, theaverage is of lower economic value (although the differences are not significant in theUS). In Japan, the dummy for upstream invention has a significantly positive coefficienton economic value only if the information sources are not included, indicating that the
upstream invention of a firm has a premium value only if it has a significant information
input from university in its conception. In the US, the upstream dummy has little effecton economic value, controlling for other factors.
Thus, we have some evidence that collaboratively produced inventions are more
likely to be of greater technical significance value, and, furthermore, that this effect ispartly due to better access to outside information from public sources (but not from otherfirms). Vertical collaboration tends to increase the probability of commercialization while
collaboration with a university tends to enhance the technical significance of theinvention.

These results are consistent with predictions from the open innovation

perspective, which suggests that firms can benefit by cooperating in technology
development (Chesborough, 2003).

7. Conclusions
Adding to the debate on open innovation, our results suggest several importantsimilarities across the two countries, as well as some interesting differences. First, wefind that just over 10% of patents have external co-inventors in both countries, despite the26significantly larger incidence of co-assignment in Japan. These results suggest that coassignee data is not a good predictor of cooperative R&D and understate that in the US
and in Europe (cf. Giuri, et al., 2007). The results also show that most co-invention iswith vertically related firms (suppliers or customers/users); co-invention with competitors
is very rare in the two countries. However, if we break out the results by firm size, we
see that external co-invention increases as firm size declines significantly more in Japan,
so that Japanese SMEs engage in significantly more external co-inventions than do either
American SMEs or larger firms in Japan or the US.
We also find that in both countries about 30% involved external (non-co-inventor)
collaborators (with the rate of collaboration somewhat higher in Japan). In both countries,
vertical collaborations with users and suppliers are the most common. On the other hand,co-invention or collaboration with university personal was quite uncommon in bothcountries, though such links were at least as common in Japan as in the US. They tend toincrease as firm size declines. Venture capital and government funding play a greater rolein the US than in Japan, especially for the smallest firms. Industry funding is more
broadly distributed among university inventions in Japan, although the overall level isabout the same in the two countries. These results suggest that, while the bulk of funding
for R&D comes from the firm itself, there are a few segments of the innovation systemthat are involved in more externally funded research. In the US, very small firms get asignificant portion of their funding from venture capital, and this is largely the only sector
that gets substantial VC funding, in either country. Government funding, on other hand,
is more concentrated in the smallest firms in Japan, while in the US government money isspread more evenly across firm size classes. University research is funded by industry at

27

about the same level in both countries, but in the US it seems to be concentrated in larger
projects, while in Japan the funding is spread across many smaller projects.
The most important knowledge sources were similar in the two countries: patents,
customers, publications, and information from other parts of the firm, although theirrelative rankings varied somewhat.

In particular, patents were a relatively more

important information source in Japan and scientific literature was relatively more
important in the US. Since our evidence suggests that inventors see literature globally,such difference does not seem to be driven by the difference of the disclosed literature(for an example, more early patent disclosure in Japan) as suggested by earlier literature
but by that of the incentive and capability of the inventors.
“Open innovation” through more collaborations seems to enhance the value of theinvention by enhancing the technical significance of the invention as well as its
commercialization possibilities, controlling the research man-months input and educationof the inventor. Collaboration with a university is important for the technical significanceof the invention and vertical collaboration is especially important for commercialization.
One important advantage of collaboration is more information from externalorganizations leading to higher value inventions, but there seem to be the otheradvantages too. For example, this collaboration may provide information that is usefulfor guiding the development of the invention into a commercial product (so that it better
matches the needs of customers or the capabilities of suppliers).
Future research will examine the mechanism and the predictors of these differencesin the uses of external information and collaboration, and also the impact of these on
patent value and commercialization. Our initial findings suggest that collaboratively

28

produced inventions have greater technical significance and that this higher technicalsignificance is due to greater use of outside information. We also find that non-coinvention collaboration is associated with higher rates of commercialization, net of value.
We will also examine the predictors of the forms of cooperation to better understand theopen innovation process (cf., Fontanta and Geuna, 2008).

29

References
Arora, A., A. Fosfuri and A. Gambardella. 2001. Markets for Technology. Cambridge,
MIT Press.
Chesbrough, Henry. 2003. Open Innovation. Boston: Harvard Business School.
Cohen Wesley M., Akira Goto, Akiya Nagata, Richard R. Nelson and John P. Walsh.
2002a. “R&D spillovers, patents and the incentives to innovate in Japan and theUnited States.” Research Policy , 31: 1349-1367.
Cohen, Wesley M, Richard R. Nelson and John P. Walsh. 2002b. "Links and Impacts:
Survey Results on the Influence of Public Research on Industrial R&D."
Management Science 48:1-23.
Fontana, R. and A. Geuna. 2007. “The Nature of Collaborative Patenting Activities.”
Paper presented at REER Conference, Atlanta, GA.
Gompers, P., Lerner, J., Scharfstein, D.S., 2006. Entrepreneurial spawning: public
corporations and the formation of new ventures. Journal of Finance LX (2), 577–614.
Giuri, P., Mariani M.et al, 2007, Inventors and invention processes in Europe: Resultsfrom the PatVal-EU survey, Research Policy 36, 1107–1127
Hagedoorn, J., 2003. Sharing intellectual property rights—an exploratory study of joint
patenting amongst companies. Industrial and Corporate Change 12, 1035–1050.
Hicks, D., Narin, F., 2001. Strategic Research Alliances and 360 Degree Bibliometric
Indicators. In: Proceedings from an NSF Workshop on Strategic ResearchPartnerships, NSF 01-336, July. <http://www.nsf.gov/statistics/nsf01336/p1s6.htm>
Klepper, S., 2001. Employee start-ups in high tech industries. Industrial and Corporate
Change 10, 639–674.
Kneller, Robert. 1999. “Intellectual property rights and university-industry technology
transfer in Japan.” Pp. 307-347 in Branscomb, Lewis M., Fumio Kodama andRichard Florida, eds. Industrializing Knowledge. Cambridge, MA: MIT Press.
National Science Board. 2008. Science and Engineering Indicators. Washington, DC:
GPO.
Ordover, J. 1991. “A patent system for both diffusion and exclusion.” Journal of
Economic Perspectives 5:43-60.
Sattler, H., Shrader, S. and Luthje, C. 2003. “Informal cooperation in the US andGermany.” International Business Review 12* 273-295.
Thursby, J., Fuller, A., Thursby, M. 2007. “US faculty patenting: inside and outside theuniversity.”NBER Working Paper #13256.
Von Hippel, E. 1988. Sources of Innovation. Oxford: Oxford.
Walsh, J.P. and H.I. Huang. 2007. “Research tool access in the age of the IP Society:
Results from a survey of Japanese scientists”. Paper presented at Research Tools andAcademic Research: An International Symposium, Tokyo, Japan, Marh 19, 2007.
Walsh, John P., Yasunori Baba, Akira Goto, Yoshihito Yasaki. 2008. “Promoting
university–industry linkages in Japan: faculty responses to a changing policy
environment.” Prometheus 26: 39-54.

30

Appendix 1.
Japan and US Inventor Surveys
A.1 Basics of the survey
The survey in Japan was conducted by RIETI (Research Institute of Economy, Trade andIndustry) between January and May in 2007. It collected 3,658 triadic patents15, withpriority years from 1995 to 2001. The survey in the US was conducted by Georgina Tech
between June and November 2007, in collaboration with RIETI, and collected 1,919
patents, with 2000-2003 priority years. The survey used both mail and web (post-mail out
and response by post or web) and the response rate was 20.6% (27.1% adjusted forundelivered, ineligible, etc.) in Japan and 24.2% (31.8% adjusted for the deceased,
undeliverable, etc.) in the US.
A.2. The questionnaire
The questionnaire consists of the following six sections: (1) Inventor’s Personal
Information; (2) Inventor’s Education; (3) Inventor’s Employment and Mobility; (4)Objective and Scope of R&D and the Invention Process; (5) Inventor’s Motivations; (6)Use of invention and the patent. The questionnaire is downloadable at www.rieti.go.jp
for Japan and at www.prism.gatech.edu/~jwalsh6/ for the US.
A.3 The sampling strategy and procedure
The sampling frame used for the survey is the OECD’s Triadic Patent Families (TPF
patents) database (OECD, 2006) which includes only those patents whose applications
are filed in both the Japanese Patent Office and the European Patent Office and granted in
the United States Patent and Trademark Office. There are both practical and theoreticaladvantages to using the TPF patents. Practically, we could utilize the enormous databases
provided by all three patent offices. Particularly, we could extract from the EPO database
the addresses of the U.S. inventors, which are not available from the USPTO. We could
use the extensive citation information available from the USPTO, to assess the backward
and forward citation structure of the Japanese inventions. Also, the reduced home country
bias and relatively homogenized value distribution of patents enhances the comparabilityof patented inventions between patents as well as among nations (Criscuolo, 2006; Dernis
and Khan, 2004). Furthermore, focusing on triadic patents can avoid sending most15

The survey also covers 1501 non-triadic patents as well as a small number of important patents.

31

questionnaires to economically unimportant patents, given the highly skewed nature of
the value of patents, since filing in multiple jurisdictions works as a threshold. The
number of basic patents (first priority patent) of TPFs account for only 3% of thedomestic applications in Japan. One caveat here is that this characteristic of TPF may
favor large and multinational firms.16
The survey population of Japan is the TPF patents filed between 1995 and 2001
(first priority application) and having at least one applicant with a Japanese address and at
least one inventor with a non-alphabetical name (i.e. the name consists of Chinesecharacters and hiragana), given that the Japanese survey questionnaire was in Japanese.
The population satisfying these requirements amounted to 65,000 patents. We randomly
selected 17,643 patents for the final mail out, stratified by 2-digit NBER technology
class17 (Hall, Jaffe, and Trajtenberg, 2001), with oversampling for the technology sectors
such as biotechnology with a relatively small number of patent applications18. In order toincrease the response rate by reducing the respondent burden, we sent a maximum of twoquestionnaires to the same inventor of triadic patents and a maximum of 150
questionnaires to one establishment. We updated the inventor address based on the patentdocuments information of the JPO, to take into account the mobility of inventors acrossthe establishments within a firm. The survey population for the U.S. is the TPF patents
filed between 2000 and 2003 inclusive (first priority application) and having at least one
U.S.-addressed inventor. We sampled 9,060 patents, stratified by NBER technology class(Hall, Jaffe, and Trajtenberg, 2001). Then, for the first U.S. inventor of each patent wecollected U.S. street addresses, mostly from the EPO database but supplemented by othersources such as the USPTO application database or phone directories. If no address wasavailable, we take the next U.S. inventor. After removing 18 patents that are either
withdrawn or for which we could not find any U.S. inventor address, we had 9,042
patents in our sample. Taking the first available U.S. inventor as a representative inventorof each patent, we have 7,933 unique inventors. In order to increase response rate and16

Since the Japanese survey also covered non-triadic patents, we could compare the characteristics oftriadic and non-triadic patents (See Nagaoka and Tsukada (2007)). The differences in terms of applicant
structure are often small. For an example, the share of small firms (with 250 employment or less) accountfor 10.2% of non-triadic patents and 8.7% of triadic patents.
17
We separated computer hardware and software.
18
The simple averages and the averages reflecting the sampling weight give essentially identical results.

32

reduce respondent burden, we only surveyed one (randomly chosen) patent from each
inventor. The final mail out sample was, thus, a set of 7,933 unique U.S.
patents/inventors.
Using the patent-based indicators for all patents in the sample, we tested response
bias, in terms of application year, the number of assignees, the number of inventors, thenumber of claims, and the number of different International Patent Classes. There aresome differences in application year in both countries (the responses have newer
application dates by 1 month in Japan and by 0.3 months in the US on average, bothsignificant at 5%), the number of claims in Japan (the responses have smaller number ofclaims by 0.37, significant at 5%) and the number of inventors in the US (the responses
have smaller number of co-inventors by 0.07 persons on average, significant at 10%).
These test results show that there do not exist very significant response biases.
Because the distribution of patents by technology class varies significantly
between the US and Japan, we constructed a set of weights to represent the observed
distribution relative to the population distribution across the two countries, and appliedthese weights when calculated country-level means for comparisons (for example, themean percent of patents that were commercialized). However, weighted and unweighted
means produced essentially the same results.

33

Appendix 2 Distribution of Likert Scale Responses in the US and JapanThe following figure compares the distribution of the responses of the US and Japanese
inventors over 49 common questions with the choices according to a Likert Scale (1= notimportant, 5=very important). The US responses are more evenly distributed over thefive choices (20% for each choice), while the Japanese responses are more centered on 4
(36% of the inventors choose 4). As a result, on average across all items, more that 50%of the inventors in Japan chose 4 or 5 while less than 40% of the inventors in the US
choose 4 or 5.
Appendix Figure 1

Distribution of 1-5 (excluding "didn't use" response)
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%

1

2

3

4
Japan

34

5
US

% high (4 or5)Table 1. Basic Profile of Inventors, Japan, and US, triadic patents(Common NBER Technology Class weighted)

Academic
Background

Demographics

Organizational
Affiliation

Japan

US

Sample size

3658

1919

University graduate (%)

87.6

93.6

Doctorate (%)

12.9

45.2

Female (%)

1.7

5.2

Age (mean years, std. dev.)

39.5 (9.1)

47.2 (9.9)

Large firm (500+ employees)(%)

83.6

77.1

Medium firm (250-500)(%)

5.0

4.2

Small firm (100-250)(%)

3.1

3.3

Very small firm (lt 100)(%)

4.7

12.1

University (%)

2.5

2.3

Other

1.0

1.0

35

Figure 1. Solo inventions, by firm size, US and Japan

45
39.2

40

37.0

35
30

28.5

27.7
25.4

25.5 25.7

27.9 27.4
25.0

25
20

SoloInventions-Jp%
SoloInventions-US%

15
10
5
0
Large firm (>500)

Medium firm
(250-500)

Small firm (100250)

Very small firm(<100)All (NBER wtd)Figure 2. External Co-inventors, by Organization Type, US and Japan (Common structure)
Figure 1. External Co-inventors, by Organization Type, US and Japan

13.1

External co-inventors

12.3

Government Research
Organization

0.5
0.6
2.5
2.7

University and education

2.0
2.0

Other firm(s)Non-competitor(s) within
the same industry

1.2
1.3
JP
0.4

Competitor

US

1.5

Customers and product
users

3.6
4.3
3.5

Suppliers

5.5

0

2

4

6

8

10

12

14

Note. This table adjusts fully the technology composition difference between the two countries, based on the common technology
structure. It does not display some minor sources of external co-inventions and other category.

37

Figure 3. Any external co-inventor, by firm size, US and Japan.

35
30.8

30

26.7

25
19.5

20
15
10

10.5
8.7

17.7
11.9

11.5

13.1
12.3
External CoInv-JP
External CoInv-US

50Large firm Medium Small firm Very small All (NBER(>500) firm (250- (100-250)
firm
wtd)
500)
(<100)

38

Figure 4. Co-invention with Customers and Suppliers, by Firm Size, US and Japan.
Co-invention with Customers and Suppliers, by Firm Size, US and Japan

16
14.6
14

12

10
9.0

9.3

(Large firm (>500

9.3(Medium firm (250-500

8

%

6.9
5.8

6

5.4
3.7

4

5.1

5.0

4.5
3.9

3.0

2.5

3.1

2

1.5

0
Customers-JP

Customers-US

Suppliers-JP

Suppliers-US

39(Small firm (100-250(Very small firm (<100Figure 5. Formal or Informal Collaboration with Outside Organizations, by Organization Type, US and Japan (NBER weight).

27.6

External collaboration

22.5

Government Research
Organization

1.5
1.7
4.0
4.4

University and education

JP

2.1
3.1

Other firm(s)Non-competitor(s) within thesame industry

US

1.8
1.3
0.8
0.7

Competitor

Customers and product
users

7.4
9.1
13.8

Suppliers

10.8
0

5

10

15

20

40

25

30

Figure 6. Co-invention with University Personnel, by Sector, US and Japan.
0.0
0.0Motors, Engines & Parts
Materials Processing & Handling

1.0

Communication

1.3
0.7

5.9

1.7
1.1

Computer Software
Power Systems

2.4
2.4

All

2.5
2.7

Resins2.5

1.3

Semiconductor Devices

2.0

JP

3.1

US

3.5
3.6

Surgery & Medical Instruments
Measuring & Testing

1.8

Organic Compounds

3.6
6.1

3.5

Drugs

8.7

6.8

Biotechnology

18.6

14.3
0

2

4

6

8

41

10

12

14

16

18

20

Figure 7. Co-inventions with universities, by firms size, US and Japan.
Co-inventors from University

7
Japan

5.8

6

5

US

4.6

4

3.5
3.0

3

2.5

2

1.6

1.5

1.1
1

0
Large firm (>500)

Medium firm (250-500)

Small firm (100-250)

42

Very small firm (<100)Figure 8. Non-co-invention collaboration with universities, by firm size, US and Japan
Collaboration Partners from University

10
9.1

Japan

9

US

8
7

6.4

6.3
6

5.6

5
4

3.8

4.0
3.6

3

2.6

2
1
0
Large firm (>500)

Medium firm (250-500)

Small firm (100-250)

43

Very small firm (<100)Figure 9A. Sources of Information-Suggestion New Project, US and Japan (US-JP common weight).

61.5

Your firm excluding co-inventors

37.9
52.8

Customers or Product users

26.0
27.6

Suppliers

7.5

Competitors (e.g. from products)

7.4

University

6.5

50.1
15.1
11.3

Public Research Organization

JP

2.3

US

58.1

Scientific and Technical Literature

39.1
63.5

Patent Literature

28.4
24.7

Technical conference and workshop

11.1
9.5

Standards documents

5.1
21.2

Trade Fair or Exhibition

2.4

0

10

20

30

44

40

50

60

70

Figure 9B. Sources of Information-Contribution to Completion of Project, US and Japan (US-JP common weight).
62.8

Your fi rm excl udi ng co-i nventors

40.5
43.5

Cus tomers or Product us ers

19.1

Suppl i ers

29.9

9.2
12.4

Uni vers i ty

5.2

Competi tors (e.g. from products )

4.8

34.5
9.2

Publ i c Res ea rch Orga ni za ti on

1.8
JP

51.3

Sci enti fi c a nd Techni cal Li tera ture

33.9

US

57.8

Pa tent Li tera ture

24.4

Techni ca l conference a nd works hop

20.7

8.0
12.0

Sta ndards documents

5.6
19.4

Tra de Fai r or Exhi bi ti on

2.0
0

10

20

30

40

45

50

60

70

Figure 10. Relative importance of domestic and foreign literature in Japan
60%

50%

Patent literature
40%

Scientific literature
30%

20%

10%

0%

domestic
literature much
more important

domestic
literature more
importantequally important foreign literature foreign literature
more importantmuch more
important46

Figure 11. Use of Scientific Literature and Patents to Suggest Projects, by Inventor Education, US and Japan.

4.5
3.87

4.0
3.5

3.24

3.13

2.99

3.31

3.2

3.04

3.0

2.77
2.53

2.52

2.5

2.5

2.6

2.2
2.1

2.0

2.0
1.5

3.51

3.46
3.32

1.3

1.4

1.5

1.8
1.7

1.4

1.0
0.5
0.0
High school or lower

Tech college or
junior college

University

Master degree.JP: Scientific Lit Sugg
.US: Scientific Lit Sugg

.JP: Patent Lit Sugg
.US: Patent Lit Sugg

47

Ph.D.

Total

Figure 12. Finance Shares of R&D Projects, weighted by man-months, US and Japan (US-JP common weight).

Other

1.10
0.26

Funds from venture capital orangels0.19
3.25

Supplier for parts, materials,
equipments, software etc

0.83
0.53

Customers or product users

1.31
2.79

Other companies

1.41
1.21

Government Research
Programs or othergovernment fund

Japan
US

2.41
5.21

Internal funds of the patentapplication (including
subsidiaries)

92.75
86.74
0.0

10.0

20.0

30.0

40.0

50.0

48

60.0

70.0

80.0

90.0

100.0

Table 2. Mean share (%) of funding by source, by organization type, US and Japan(weighted by man-months).
Own(including
debt)
JP
US

Government User

JP

US

JP

US

Supplier

Other firms

JP

JP

US

VentureCapital andAngelsJPUSUS

Large firm 95.5

93.9

1.3

2.9

1.2

1.8

0.8

0.5

0.6

0.5

0.1

0.3

Medium
firm

96.2

90.8

0.8

4.7

2.1

4.5

0.6

0

0.2

0

0

0

Small firm 87.6

88.5

2.5

5.9

8.9

3.6

0.4

0

0.6

0.8

0.1

1.1

Smallest
firm

87.2

64.9

4

4.8

2.2

6.1

0.4

0.9

1.4

4.7

0.9

18.2

University
or college

47.8

30.1

23.6

54.5

0.3

0.6

3.3

0

18.9

8.8

0

6

Other

49.9

67.9

27.6

13.2

3.3 16.7

0

0

3.6

0

0

0

All

92.8

86.2

2.5

5.5

1.5

0.8

0.5

1.2

1.4

0.2

3.3

2.9

49

Table 3. Distribution of the heterogeneity of the collaborating organizations
Number of typesofexternalcollaborators

Japan

US

Number of typesof external coinventors

Japan

US

0

71.0%

77.2%

0

88.1%

88.5%

1

24.1%

15.1%

1

10.8%

8.6%

2

4.1%

5.7%

2

1.0%

1.7%

3

0.6%

1.5%

3

0.1%

.6%

4+

0.1%

0.6%

4+

0.1%

.6%

Total (N=)

100% (3364)

100% (1587)

100% (3395)

100% (1611)

50

Table 4. Ordered-logit regressions of technical significance on collaboration andinformation sources, US .

Ordered Logit

US(Tech. Sig.)

Collaborator
heterogeneity

0.186**(0.070)0.079(0.077)

US(Econ. Val.)JP(Econ. Val.)0.125†(0.072)0.163***(0.058)-0.010(0.079)Info-firms

0.020(0.017)0.068**(0.018)

Info-Pubs/patents

0.021(0.020)-0.008(0.020)0.071**(0.025)

0.061*(0.026)

Info-Univ./Gov.
Lab/Standards-0.013(0.011)
0.015(0.017)0.031**(0.013)0.503***(0.115)0.411***(0.122)0.008***(0.001)0.008***(0.001)-0.239(0.218)-0.074(0.131)-0.005(0.141)

0.327(0.251)0.315(0.255)0.901***(0.217)0.798***(0.244)131.43***67.53***

92.05***

127.5***

10

13

10

13

10

1287

1240

1248

1206

2443

PhD degree

0.454***(0.106)

0.355**(0.114)0.437*** 0.437**(0.110) (0.118)

Man-months

0.016***(0.002)0.014***(0.002)0.012*** 0.011***(0.002) (0.002)

Big firm (> 500)

-0.144(0.214)-0.189(0.216)-0.242(0.216)0.712**
Small firm (< 100) (0.249)

0.675**(0.252)118.90***(df)
N

LR Chi-SQ

0.142**(0.061)

Standard errors in parentheses ***p<.001 ** p<0.01, * p<0.05 †p<.10
Includes controls for 1-digit NBER

Table 5. Logistic regression of commercialization of patents, US and Japan

Logistic

US

JP

Verticalcollaboration

0.6801***(0.1854)0.4670*(0.1942)0.196*(0.096)0.160(0.101)

University
Collaboration-0.1703(0.3336)0.0736(0.3667)-0.288(0.201)-0.333(0.214)

Info-firms

0.0816***(0.0242)

Info-Pubs/patents-0.0672**(0.0257)

0.057***(0.011)0.118***(0.016)-0.0475(0.0343)

Info-Univ./Gov.
Lab/Standards

0.025†(0.013)

PhD degree-0.4203**(0.1435)-0.3057*(0.1515)-0.164(0.132)-0.094(0.138)Man-months

0.00228(0.00318)

0.00281(0.00328)

0.002†(0.001)0.003*(0.001)Big firm (> 500)

-0.7894*** -0.7598*(0.2977)(0.3032)-0.325*(0.140)-0.278†(0.148)0.479*(0.232)0.409†(0.247)-0.3494
Small firm (< 100) (0.3482)-0.3184(0.3549)

Upstream-0.6991*** -0.6567*** -0.699***(0.1915)(0.1973)(0.086)-0.630***(0.090)Technical
Significance0.4388***(0.0682)

0.4660***(0.0706)

0.273***(0.056)

0.278***(0.244)106.38***116.77***164.76***220.83

(df)

17

20

20

23

N

1068

1040

3162

3000

Wald Chi-SQ

52

Table 6 Ordered-logit regressions of economic value on collaboration and information
sources, US and Japan.

Ordered Logit

US(Econ. Val.)JP(Econ. Val.)

Collaborator
heterogeneity

0.1204(0.0735)

0.147*(0.060)-0.0117(0.0799)

Info-firms

0.0707***(0.0183)

Info-Pubs/patents-0.0115(0.0207)

PhD degree

Man-months-0.015(0.011)0.016(0.017)0.0621*(0.0259)

Info-Univ./Gov.
Lab/Standards

0.142*(0.061)0.033*(0.013)

0.4819*** 0.4844*** 0.472***(0.1141) (0.1214) (0.122)
0.0121*** 0.0106***(0.0024) (0.00246) 0.007***0.442***(0.124)(0.001)0.008***(0.001)Big firm (> 500)

-0.2687(0.2195)-0.2611(0.2222)-0.078(0.131)-0.006(0.141)

Small firm (< 100)0.3038(0.2561)0.3152(0.2594)

0.879***(0.219)0.802**(0.243)

Upstream-0.0708(0.1540)0.0425(0.1575)

0.334**(0.098)-0.117(0.086)67.62***

92.51***

127.5***

117.84***

(df)

11

14

10

13

N

1248

1206

2443

2308

LR Chi-SQ

Standard errors in parentheses ***p<.001 ** p<0.01, * p<0.05 †p<.10
Includes controls for 1-digit NBER

53