Innovation and Crisis: An Analysis of its Impact on the Greek Patenting Activity

Abstract

Creative destruction may be painful, but is also useful, as it fosters innovation and progress by discarding the old and familiar for the new and better. In this perspective, economic and financial crisis could be a source of opportunities for both innovators and innovation systems. From the private sector point of view, the crisis has had different types of effects. These can affect innovation performance and investments and based on them the implications for innovation can both be positive and negative. Obviously, the crisis greatly affected Greece and examples of its effects include entrepreneurship, firm creation, venture capital financing and innovation. In this context the paper that follows examines the impact of economic and financial crises on the Greek innovation activity, considering patents as proxies of innovation. The paper is structured as follows: The first part discusses the existing literature on this field, namely the concept of economic and financial crisis and its features and the role of innovation in the crisis environment. The second part deals with patent statistics and its use in economic analysis. The third part describes the main points of methodology. Quantitative methodology based on statistical data analysis has been chosen for this study. The choice of methodology was motivated by data availability from a variety of reliable sources, as well as availability of comprehensive statistical and time series analysis that allow assessment of interdependence, and, even, causality between economic conditions and patenting activity. The forth part of the paper presents the presents the main econometric results, which are based on time series, regression and test for Granger causality between economic and patenting data. Last but not least, the fifth part further discusses the relationship between economic and patenting data, referring to the limitations of the study and also indicating possible future research in this field.