WHEN it comes to being awarded patents, the Japanese are world champions. Japan has more than 1,200 patents per million people—more than twice as many as Switzerland, the next most prolific country (with 500 patents per million), and more than three times as many as third-ranking America (with 350 patents per million). Does that make Japan the most innovative country in the world? Difficult to say. But something rather exceptional is at work in Japan that encourages its scientists, engineers, workers and even housewives to seek fame and fortune by patenting their brainwaves.

There's a problem, of course, with using patents as an index of national performance. Patents are awarded for something that is novel, useful and non-obvious. As such, they measure success in discovering or inventing new things. They do not measure innovation, nor the economic activity that ensues.

In the grand scheme of things, inventions are the easy part. Turning inventions or discoveries into innovations—ie, products and processes that enrich our lives or improve our well-being—is a vastly more demanding business.

Inventions and discoveries are made in the lab or on the kitchen table by a handful of individuals. By contrast, innovations absorb the energies and fortunes of large corporate teams and can take years to bring to fruition. An invention that cost $1,000 to conceive can easily cost $10m to turn into a successful innovation.

Even so, with nothing better at hand, patents are often used as a proxy for innovation. And Japan's high patenting performance says much about the country's instincts for innovation. However, Japanese patents tell a mixed story. As noted in our “At a glance” feature on inventiveness, published on Economist.com on July 30th (see article), there's a lot of multiple-counting in Japanese patent figures. The reasons are as much cultural as historical.

Although Japan is not a particularly litigious society, Japanese courts are more preoccupied with the letter than the spirit of the law, and can be extraordinarily pernickety when cases do go to trial. Until recently, when Japan's patent standards began to converge with American and European ones, that forced Japanese patent examiners to adopt a far more atomistic view of what constitutes a patentable invention. Thus, were a bicycle to be patented in Japan, it could not be defined simply as a human-powered, two-wheeled vehicle, but would have to be considered as a family of patents covering the frame, wheels, crank, pedals, handlebars and saddle.

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Dreaming up the next big thing

But even after discounting for the Japan Patent Office's multiple-counting, Japan still patents way over its weight. What was not mentioned in “At a glance” was that the Economist Intelligence Unit (EIU) white paper it was based on (which, in the interest of full disclosure, your columnist had a hand in writing) handicapped Japan by discarding one-third of its patents from the start. And still it came out top. Also left unsaid—and most intriguing of all—was that Japan achieves its stellar performance with rather mediocre inputs.

The EIU study created four indices for each of the 82 countries examined. Apart from the innovation index based on patents granted, two further indices ranked each country's direct drivers of innovation (national research effort, education standards, technical skills, broadband penetration, etc) as well as those indirect environmental factors considered conducive for innovation (such as rule of law, tax regime, economic stability, labour flexibility and patent protection). Finally, an aggregate enabling index was created from a 70/30 weighting of the direct and indirect drivers.

Despite having one of the best-educated workforces in the world, superb IT infrastructure, a well-oiled administration, good rule of law and protection of intellectual property, Japan ranks a lowly 14th in terms of its enablers for innovation. So, why does the country perform so well on the output side of the innovation equation, despite having such feeble drivers on the input side?

No one really knows. You can make educated guesses. The concentration of talent in manufacturing. The pursuit of excellence. The ferocious rivalry between Japan's large electronics firms. The lingering relic of the country's post-war catch-up mentality. Fears of economic isolation given the expansion of the European Union and the emergence of the North American Free-Trade Area. Anxiety about a rapidly ageing society facing a formidable pensions and health-care crisis.

All this may or may not play a part. But beyond the more obvious economic imperatives lie certain social factors that appear to be at work as well. In the early 1980s the Hakuhodo Institute of Life and Living (HILL) in Tokyo sought to capture the spirit of the times by looking at Japanese society through a prism of hitonami—a national tendency of wanting to be like others.

HILL argued that the old feudal habit of watching neighbours closely to see what behaviour the local war lord condoned or forbade had served modern society well. In particular, it helped explain why Japanese consumers had traditionally been quick to embrace new products. In certain ways, the customers were being even more innovative than the suppliers.

Back in Japan for his biannual pilgrimage, your columnist is beginning to feel that this tendency may explain much of the country's natural talent for innovation. Certainly, coming up with bright ideas for future products involves a lot of informal and subjective “tacit” knowledge as well as documented “explicit” know-how.

The accumulation and sharing of this tacit understanding (which is largely impossible to record) is what makes Japan tick. You only have to go into a Japanese pub in the evening to hear animated businessmen carrying on their after-hours office discussions. Perhaps it is the birru, jizake and shochu that are the real tonics for innovation.