Prepared for the IIPS Symposium on

Globalization andJapan’s Science and Technology Strategy
19 – 20 November 2007
TokyoSession 2Monday, 19 November 2007

The Major Characteristics of Inventors and Inventing Firms inJapan: Findings from the RIETI Inventor Survey

Sadao Nagaoka
Hitotsubashi University

The Major Characteristics of Inventors and Inventing Firms in Japan:
Findings from the RIETI Inventor Survey1
Sadao Nagaoka
Research Counselor, Research Institute of Economy Trade and Industry
Professor, Institute of Innovation Research, Hitotsubashi University
November 2007
1. Introduction
Japan's economic growth depends heavily on high-quality research and development(R&D) performed by corporations, universities, and other institutions, combined with
their effective commercialization. However, we have very limited social scienceknowledge of innovation process, including R&D objectives and motivations,knowledge sources, spillover, funding constraints on implementing R&D, constraints on
utilizing results, and the inventor motivations. By directly gathering information fromthe inventors working on the frontlines of R&, we can deepen our understanding of thestructural characteristics of Japanese R&D and this will aid in policy research. With thisgoal in mind, the Research Institute of Economy Trade and Industry (RIETI) undertooka survey on the inventions and the R&D projects that created them, as one componentof the research project on the “Characteristics and Future Issues for Japanese Corporate
Research and Development”. It was conducted from January to June of 2007. Thesurvey yielded close to 5,300 responses and marked the first such systematic survey on
R&D projects in Japan.2
In this paper, we report the initial findings from the survey on the major
characteristics of the inventors and inventing firms in Japan. The sample used in theRIETI Inventor Survey consists of three categories. Approximately 70% of the sample
consisted of the inventions, the patents for which have been filed trilaterally—applying
for them in Japan, the United States, and in Europe through the Europe Patent
Office—and who have been granted a patent in the United States (“triadic patents”
hereafter). Some 30% of the sample is composed of non-trilateral patent filings(Japanese patents for which the examination has been completed, “non-triadic patents”
This paper relies entirely on the RIETI discussion paper “Japan’s Innovation
Process from the Perspective of Inventors: Summary findings of the RIETI
Inventors Survey” (in Japanese, 2007)
2While the RIETI Inventors Survey relied on the PATVAL-EU survey undertaken inEurope from 2003 to 2004, at the same time, the survey also added a number oforiginal questions, some of which are included in this paper. For the Europeansurvey, please refer to Paola Giuri, Myriam Mariani, et al, 2007, “Inventors andinvention processes in Europe: Results from the PatVal-EUsurvey”, Research policy,Vol. 36, Issue 8, 1107-1127
11hereafter), and with a very small sample (roughly 120 instances) collected fromimportant patents in important new technology fields3, such as nano-technology or newmaterials, or the essential patents of the standards. The majority of the patents claimed apriority year, or filing year, of between 1995 and 2001.
2. Profiles of the inventors who responded and their organizational of affiliationsFirst, we will take a look at the age, gender, academic background, and theorganizational affiliations of the inventors who responded to the RIETI Inventor Survey.
The first point that should be noted is that this survey was carried out based upon arandom sampling of the patents, not a random sampling of the inventors. As such, theseresults do not depict a representative sample of inventors. In Table 1, results aredisplayed in comparison with European survey results (targeting the six countries ofGermany, France, England, Italy, Spain, and the Netherlands).
The academic background of inventors is diverse. Of the inventors with trilateral
patents, some 86% were university graduates, while 14% did not have a university
degree, when they made the inventions. In addition, 12% had doctoral degrees(including the degrees obtained based only on the dissertations). Among those withtrilateral patents, the ratio of respondents with doctoral degrees was much higher thanamong those with non-trilateral patents. 29% of the inventors for important patents instandard and key technology sectors had doctoral degrees. Thus, a positive correlation
between the quality of an invention and the educational background of an inventor isobserved. In Europe, the percentage of university graduates was 77%, significantly
lower than Japan, while the percentage of doctoral respondents was higher at 26%,
indicating more diverse academic backgrounds in Europe. However, in all samples, theratio of female inventors was significantly lower than their male counterparts (fortrilateral filings it was 1.5%), which is extremely low even compared to the percentage
of female researchers in Japan (approximately 10%, according to the Survey of
Research and Development in Japan by Ministry of Internal Affairs andCommunications).

Such patents are identified by the experts in fields such as IT, nano-technology,
and new materials in the Japan Patent Office’s Sectoral Surveys of Technological
Trends and Patent Applications
32

Table 1 Basic profile of the surveyed inventors and their organizational affiliations

trilateral non
patents trilateral
patents

Academic
background

Important Europe
patents instandard
and keytechnology
sectors

Sample size
University graduate (%)

3,658

1,501

119 9,017

85.9

86.7

94.2

76.9

Doctorate (%)

12.4

8.7

28.6

26

1.5

1.8

1.7

2.8

39.5

38.6

39.7

45.4

87.8

87.0

85.6

70.6

8.7

10.2

3.4

22.5

2.3

1.4

4.2

3.2

0.7

0.8

4.2

2.2

0.5

0.7

2.5

Female (%)
Age (years old)
Employed at large corporation (251 ormore employees) (%)
Employed at small or medium-sized
Organizational corporation(%)
Institutions of higher education(%)
affiliation
National research institutes or othergovernment organs (%)
Foundations and other organizations(%)

Source: Japan RIETI Inventor Survey, Europe’s PatVal-EU (targeting the six countries ofGermany, France, England, Italy, Spain, and the Netherlands).
Note: Individual inventors who have no organizational affiliations are extremely low in number.

Next, the survey data showed that at the time of creating their inventions, 97% ofinventors were employed by the organizations so that all most all inventions were“employee inventions”. The percentage of individual inventors, such as self-employed
or student inventors was extremely low. As indicated in Table 1, by place of
employment the data shows that employees of the corporations with more than 250
employees made up nearly 90% of all trilateral and non-trilateral patents, while
employees at small to medium-size corporations were responsible for approximately
10%.

3The percentages of trilateral patents stemming from higher educational
institutions such as universities, national research institutions and other governmentalorganizations, and foundations and other organizations were responsible for 2.3%, 0.7%
and 0.5% of such patents, respectively. A comparison of trilateral and non-trilateral
patents shows similar patterns prevailing in terms of organizational affiliations.
However, for important patents in standard and key technology sectors, the sharecomposed by large corporations is roughly the same, but the small to medium-sizedcorporation share falls off and those held by universities and national researchorganizations increase significantly. In Europe the organizational affiliation for large
corporations is on average 70%, implying that the corresponding figure is much larger
for Japan. In contrast, in Europe small and medium-sized companies are responsible forroughly 20% of the patents, which is more than twice that of Japan. For universities thepercentage is slightly lower in Japan.
In Japan, it is often thought that inventors are drawn from a broad base, including
the manufacturing shops, but it is not clear that this is in fact the case. The RIETI
Inventor Survey covers the functional affiliation of inventors, the results of which arereported below in Figure 1. For trilateral patents, the ratio of inventors affiliated with anindependent R&D unit is close to 70%, by far the highest share. A distant second arethose affiliated with R&D units affiliated with the other organizations such as amanufacturing unit, which logged a ratio of 14%. The remaining 16% was composed ofinventors affiliated with a manufacturing unit, a software development unit, and theother units (such as from a design unit, etc.) not specialized in R&D. For non-trilateral
patents, the independent R&D units account for a slightly lower proportion at 64%, withthe units not specialized in R&D conversely recording a relatively larger share of 20%.
However, the underlying structure is essentially the same. For the important patents instandard and key technology areas, the independent R&D sector composed a high 80%of the total patents.

4Figure 1 Inventor functional affiliation

90
Trilateral patent
79

80
70

non trilateral patents

70
64

Important patents instandard and key
technology sectors

60
50
40
30
20

14 15
8.7

10

6.0 7.2
2.5

2.5 4.00
IndependentR&D unitR&D units
Manufacturing
affiliated withmanufacturing
unit

7.4

9.4 9.3

0.0

Softwaredevelopment

otherNote: The “Other” category includes design and engineering sectors.

3. Business objectives of R&D
The importance of focusing on the core competency of a firm has often been argued inJapan in recent years. There is a question of how the R&D project of a firm is related toits scope of business, in particular, whether it is for strengthening R&D in its corebusiness or for diversification.4 It is also important to clarify what kinds of tradeoffs thefirm faces in such choice. As shown in Figure 2, “Strengthening existing businesses”
accounted for 70% of the responses by the inventors belonging to firms, “Starting new
In the survey, “Core Business” is defined as that business in which a company has
a competitive advantage in the market in this field, and that forms the core of thesales and profits of the company.
45businesses,” for roughly 20%, and “Strengthening the corporate technological base notlinked to the current business” accounted for the remaining 10%. The results fortrilateral patents and for non-trilateral patents are very similar. Therefore, when researchfor starting new business is included, it becomes apparent that 90% of the corporate
R&D projects under the survey is closely related to the current business strategy of afirm. In addition, roughly 50% of the total R&D projects are undertaken with theobjective of strengthening existing core businesses. However, it may be important tonote that 40% of the R&D projects resulting in the important patents in standard andkey technology areas stems from the R&Ds designed to generate new business, while
20% is for enhancing the corporation’s technology base level over the long term.
Figure 2 Business objectives of the research which yielded the inventions (%)
80%
70%

68%

trilateral patents

70%

non trilateral patents
60%

Important patents in standard and key
technology sectors

50%

50%

46%
41%

39%

40%
31%
30%
23%

21%

19%

18%

20%
14%

13%
9%

10%

7%

0%
Strengthening
existing businesses

123

4

core businesses

non-core businesses

new businesses

Strengthening thecorporate
technological baseNote: Responses are limited to inventors belonging to corporations. A small number ofresponses said that the distinction between core business and non-core business was not clear.

64. R&D tradeoffs by business objective
The R&D project directly related to the core business of a firm would have anadvantage that their results can be used easily utilized by a firm, since a firm has thecomplementary assets. Thus, even the research results that are relatively minor
technological improvement could easily find the profitable applications. At the sametime, since such R&D project aims at using the existing complementary assets, such as
manufacturing facilities, it can be potentially inhibited from making a technologicalleap. Following this line of thought, we would expect that there is a tradeoff involving
in-house utilization ratio and the use of new scientific and technological knowledge inthe choice of R&D projects. In fact, as shown in Figure 3, in R&D catered for corebusiness, the utilization ratio of the results for in-house is the highest (63%). At thesame time, it is clear that the level of the use of scientific and technological knowledge
for the conception of inventions is lower for such R&D than that for R&D for newbusinesses, or for strengthening the technology base (For the conception for inventions,only 15% of respondents answered science and technology papers were extremely
important for R&D catered for core business, while the corresponding figure was 21%
for R&D targeting the generation of new business). In addition, the R&D new businesshas substantially more valuable patents than the R&D targeting the core business, interms of the share of top 25% inventions.

7Figure 3

Distinguishing characteristics of R&D for core business and that for the otherbusiness objectives (triadic patents)

70%
63%
60%

57%
52%

50%
41%
40%
34%34%

30%

28%

27%
21%

20%

15%

23%

13%

10%
0%
core businesses

non-corebusinesses

new businesses

In-house utilization ratio (%)

Strengthening
the corporate
technologicalbase

Top 25% in economic value (%)
Importance of science and technology papers in the conception ofinventions

Note: “In-house utilization" indicates the ratio of inventions used in the products orproduction processes of the firm in question. “Top 25% in economic value” refers to the ratio
judged by the inventors to fall in the nation’s economic top quarter of the technology
accomplishments. “Importance of science and technology papers in the conception of invention”
refers to the responses stating that such papers are very important in inspiring the invention.

85. Cooperation in R&D: Collaboration with users, suppliers and universities
The more that a firm diversifies out from its core business area, the more it needs todeepen its understanding of the market and to acquire new technological capabilities.
Consequently, establishing cooperative relationships with external organizations in thearea of R&D will become important. Figure 4 shows the percentage of patents withexternal co-inventors as well as their types by business objective. According to this, theR&D targeting the core business has the lowest probability of having externalco-inventors (10% of inventions). The probability of having external co-inventors
increases as the R&D of a firm targets non-core business, new businesses, and thenstrengthening the firm’s technology base level, to a peak of 17%. Also, except for theR&D with the objective of strengthening a firm’s technology base level, the mostfrequent collaboration is that with clients or product users, with the collaborations withsuppliers of equipment, materials, parts, or software as the second most common. Users
play an important role for R&D related to current business lines. In contrast, whencorporations are conducting R&D with an eye to increasing their technology base level,
they most often select researchers at universities or other higher education institutions
as partners.

9Figure 4

Frequency of external co-inventors by business objectives of R&D (%) (incidence of

external co-inventors by types)
18%

External coinventor(s)involved (%)

16%
14%

Customer orproduct user

12%
10%

suppliers ofequipment,materials, parts orsoftware
Universities orhigher education
institutions

8%6%4%2%

National researchlaboratories0%
core businesses

non-corebusinesses

new businesses

Strengthening
the corporate
technologicalbase

Note: Limited to R&D engaged by the inventors affiliated with firms.

6. Inventor motivation
Finally, we will address the inventor motivations, as depicted in Figure 5 (the share ofthe inventors who regard a particular motivation to be highly important). A look at thetrilateral patents shows that the most important motivation for an inventor for theinvention was the “Interest in solving a challenging technology issue,” with 42% ofrespondents regarding this as very important. Next in importance, and representing 19%of the respondents, was the “Satisfaction of contributing to the advancement of scienceand technology.” The third most important motivation was “Improving the performanceof one’s affiliate organization,” indicating that organizational motivation (team success)is also important.

10

Those who regard personal economic motives (including improving careerprospects, increasing the opportunity of landing a better job, financial reward, honor orprestige, and issues related to improved research conditions, such as expanding researchbudgets) to be “very important” as a motivation for invention is a relatively smallminority. It is important to note that these motives do reflect the environments in whichinventors work. For example, comparing the results for important patents in standard
and key technology sectors and those for trilateral inventions, or those for trilateralinventions and those for non-trilateral inventions shows that both the “Interest insolving a challenging technology issue” and the “Satisfaction of contributing to theadvancement of science and technology” is more important in former than in the latter.
Such difference would be due to the fact that the technology level of R&D is higher for
the former patents.
Figure 5Inventor motivations (% of responses who regard each motivation to be veryimportant)42
35

Interests in solving a challenging technology issue

56
19

Satisfaction from contributing to the advancement ofscience and technology

13

Improving the performance of one’s affiliatedorganization

13
11
12

34

Trilateral patents

Improving career prospects or increasing the opportunityof landing a better job

4.5
3.7
2.6

Financial reward

3.3
3.4
1.7

non trilateral
patents

Honor or prestige

2.6
2.3
3.4

Importantpatents instandard and key
technology
sectors

2.3
2.3

Improved research conditions, such as expanding
research budgets

6.8
011

1020304050607. Summary
The major findings of the inventors and inventing firms in Japan as uncovered by theRIETI Inventor Survey can be summarized as below.
(1) Diversity is high in terms of academic backgrounds of inventors, although theinventors engaged in producing high-quality patents tend to have higher academic
backgrounds. The percentage of female inventors is extremely small.
(2) The bulk of inventions are “employee inventions”. In addition, the firms with morethan 250 employees account for approximately 90% of both triadic and non-triadic
patents.
(3) Approximately 70% of R&D aim at strengthening existing business lines,
approximately 20% to generating new business, and approximately 10% tostrengthening the firm’s long-term technology base which is unrelated to the business
operations over the short term. Therefore, when generating new business is included,
90% of R&D is closely related to the current business strategy. An R&D targeting afirm’s core business often finds the application in-house, while it involves less use of
new scientific and technology knowledge in its conception. In addition, as might beexpected, the more removed from a company’s core business the R&D project becomes,
the more important it becomes for a firm to forge cooperative relationships withexternal organizations.
(4) The strongest motivation for inventors for an invention is the “Interest in solving achallenging technology issue.” Next in importance is the “Satisfaction of contributing to
the advancement of science and technology.” Only a minority of inventors rank theother motives such as personal economic motivations as very important.

12