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(Ongoing) Pandemic and its
Impact on (ICT) Innovation
Tomáš Pitner
PV226 Lasaris Seminar – Sep 29, 2022
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Goals & Outline
̶ Pandemic as a game-changer
̶ Channels for impact on
economy
̶ Impact on economic growth, on
supply chains
̶ Innovation affected by
pandemics
̶ Research productivity
̶ Innovation determinants
̶ Short-term effects
̶ Long-term effects
̶ Impact on innovation
̶ Differences between countries
and sectors
̶ Policy response
̶ R&D investment
̶ Effects and limitations
̶ Responses in critical sectors
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Impact on economic growth
Channels COVID-19 pandemic has negative effect:
1. decreased consumption of goods and services
2. indirect influence through the shock of financial markets
3. impact on the supply-side, which consists of supply chains,
labor demand and employment
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Impact on economic growth
̶ older models of pandemic impact do not sufficiently describe the
COVID-19 pandemic
̶ they predicted the impact of pandemic for big economies such as
EU to 2-4% GDP decline while eventually it was around 7%
(almost 6% decline for Czechia in 2020 with a 3% growth in 2021).
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Impact on supply chains
̶ over 80% of global sectors: disruptions in supply chains during
pandemic
̶ 64% of companies across the manufacturing and industrial sectors
are likely to bring production and sourcing back
̶ Javorcik (2020): COVID-19 experience – the coronavirus “will not
end globalization, but it will change it” which requires innovation
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Research productivity
̶ Economic growth = number of researchers × research productivity
̶ Bloom et al (2020):
̶ research productivity declines by a couple of percent each year
in the long-term run – halving in 13 years
̶ to maintain the growth pace - increase # of researchers
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Innovation determinants
̶ determinants of corporate innovation – domestic credits,
̶ financial development, institutional quality, stock market
development, and trust, uncertainty shocks
̶ significant + factors promoting innovations – operation
profit, total exports, management efficiency, and
government subsidies
̶ insignificant + factors: state ownership, value-added
productivity, firm age
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Short-term effects
̶ one cannot expect to return to previous business and
working habits
̶ remote online work: 75% plan to convert 5% permanent
on-site jobs to remote ones while 25% businesses convert
nearly 20%
̶ better employee experience, larger talent acquisition base
̶ larger freedom and reach work-life balance
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Differences between countries and sectors
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R&D investment
̶ pandemics (increased infection and death toll) increase
real wages for survivors in the long run but are less likely
to improve their research productivity,
̶ increased R&D investment may not be able to represent
an increased innovative ability during and after pandemic
episodes
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Responses in critical sectors
̶ pandemic threat to research productivity in the long-run,
̶ policies that reduce the effect of the “Great Lockdown”
needed
̶ results vary by country and sectors of economic activity
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Responses in critical sectors
̶ Fund and build trust in first-rate science
̶ Emphasize high-frequency monitoring
̶ Be predictive and implement measures well before
̶ Strengthens supply-chain resilience
̶ De-globalization must be limited
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Conclusion
̶ Slow down in innovations during pandemic (ICT) sector
=> drop in economic growth
̶ Governments should
̶ primarily support innovators
̶ speed up patent application processing
̶ continue to support open science (“ideas are not rivals”)