How Patents and Innovation Procurement Can Boost Asia's Recovery

The government plays a critical role in supporting innovation at every stage—from funding research to diffusion of successful technology. Photo credit: ADB.

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Patent and public procurement systems can help promote productivity-led growth by improving technology diffusion and supporting innovative solutions.


Nurturing innovation can help developing economies leap to productivity-driven growth. Some countries however lack the resources to support creativity and the creation of new and better products and services. Invention and innovation entail know-how, taking risks, and costs.

In Asia and the Pacific, patents and innovation public procurement can be effective instruments to help countries boost innovation and make a resilient and inclusive recovery without excessive fiscal burdens. The COVID-19 crisis has led to higher fiscal vulnerability and a narrower fiscal space in many countries in the region. This situation calls for new approaches in stimulating innovation-driven growth.

The region shows great potential for innovation. According to the World Intellectual Property Organization (WIPO), Asian economy patent filings accounted for more than 66% of the world’s total in 2020. However, 92% of patent filing activities are in the People’s Republic of China, Japan, and the Republic of Korea, and most of the filing activities in other countries in the region are made by nonresidents.

This article is adapted from a policy brief from the Asian Development Bank Institute (ADBI). The experiences of advanced countries in reforming patent and public procurement systems inform recommended policy actions.

New Policy Instruments

The government plays a critical role in supporting innovation at every stage—from gestation (e.g., funding research) to technological maturity (e.g., direct purchases to diffuse successful technology). Patents and innovation public procurement are considered new policy instruments.

Patents can drive innovation not only by providing incentives for innovators with certain exclusive rights and fair returns but also by disclosing innovative information to the public.

Public procurement can promote innovation not only by purchasing innovative products and services that deliver better value for money, particularly from innovative startups, but also by providing innovative public services, including e-government.

Strengthening the Patent System

A strong patent system includes tight patent protection, fast patent examination, and effective information systems. Policy makers should intensify policies that connect existing patent systems to innovation, such as improving technology transfer and commercialization, without which patent filing cannot contribute to economic growth.

In the United States, the patent office offers accelerated patent examination, which promises final disposition of requests within 12 months. It also has inventor assistance and support programs and intellectual property commercialization (licensing) programs.

With a strong rule of law and protection environment, Singapore has developed a strong intellectual property system. Growing intangible assets and leveraging on intellectual property to spur economic growth and create jobs are at the core of its post-COVID-19 strategy.

Shifting from Efficiency-Oriented to Innovative Procurement

Governments are the major purchasers in every market. According to the Organisation for Economic Co-operation and Development (OECD), public procurement accounts for an average 12% of GDP and 30% of government expenditures in member economies. About 86% of OECD economies are implementing innovation public procurement as of 2018.

Strategic use of public procurement can enlarge policy instruments for economic recovery and sustainable growth. Innovation public procurement can promote the government as the first buyer of innovative products and services.

The transformation from efficiency-oriented to innovative public procurement is not easy. Challenges include management and coordination, skills and capacity, legal and regulatory frameworks, financial support, awareness, and measurement systems/information technology tools. OECD finds risk aversion of public officials as the biggest challenge.

These challenges can be addressed by strong political support, such as prioritizing the public procurement policy.

In the Republic of Korea, the Public Procurement Service, which adopted innovation public procurement in 2019, introduced an audit-exemption clause to lower risk aversion.


Asian Development Bank Institute. 2022. Two Strategies for Innovation and Growth in Asia and the Pacific. Tokyo.

Yongwook Lee
Former Senior Capacity Building and Training Economist, Asian Development Bank Institute

Yongwook Lee was a senior capacity building and training economist from January 2021 to September 2022 at the Asian Development Bank Institute (ADBI) and came back to the Republic of Korea (ROK) Ministry of Economy and Finance (MOEF) in October 2022.

Piyakul Somsiriwong
Capacity Building and Training Associate, Asian Development Bank Institute

Piyakul Somsiriwong is a capacity building and training associate at ADBI. She earned her PhD and MA in Development Economics from the National Graduate Institute for Policy Studies (GRIPS) in Tokyo under a MEXT scholarship.

Asian Development Bank Institute (ADBI)

The Asian Development Bank Institute provides intellectual input for policy makers in Asian Development Bank’s developing member countries. It does so by conducting research with a focus on medium- to long-term development issues of strategic importance that affects the region and through capacity building and training activities that contribute to ADB’s overarching objective of poverty reduction.

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