Working from home will outlast the pandemic—at least, that’s what US patent applications suggest. The lockdowns triggered by the COVID-19 pandemic set off a significant shift in new patent applications toward technologies that support working remotely, according to Stanford’s Nicholas Bloom, Chicago Booth’s Steven J. Davis, and Booth PhD candidate Yulia Zhestkova.

The researchers parsed the text of US patent applications to spot any trends in innovation related to working from home. Through a review of news articles, they built a dictionary of relevant terms and phrases including telework, video conferencing, telecommuting, flexible workplace, distance work, virtual office, nomadic employee, and working from anywhere. They then created an algorithm to analyze the more than 3.5 million patent applications filed from January 7, 2010, through September 3, 2020.

If a patent application included at least one relevant term in its description or main-features section, the researchers marked the application as a working from home (WFH) invention.

WFH-related patent filings began rising in 2020, just a few weeks after Chinese authorities imposed a lockdown in Wuhan to limit the spread of the novel coronavirus, Bloom, Davis, and Zhestkova find. As the virus began to spread across the United States, patent filings referencing the key terms surged. The share of patent applications related to advancements in remote work rose from 0.53 percent in January to 0.74 percent in February to 1.07 percent in July.

A surging share of patent applications

Bloom et al., 2020

“We find clear evidence that COVID-19 has shifted the direction of innovation toward technologies that support WFH,” the researchers write.

They note another indication that the pandemic sparked innovation in this area: even before these patent filings began climbing, COVID-19 started driving up stock prices of companies focused on cloud computing, telecommunications, and semiconductors—key components of the WFH economy.

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By spring 2020, more than half of paid work in the US was being done from home, according to research by Jose Maria Barrero, of the Mexico Autonomous Institute of Technology, along with Bloom and Davis. And WFH is showing its mettle: during the COVID-19 crisis, the market looked favorably on companies whose operations required less physical contact and whose employees could easily work from home. These companies’ stock prices outperformed those of their counterparts whose operations made them less resilient to social-distancing rules, according to research by University of Naples Federico II’s Marco Pagano and Vienna University’s Christian Wagner and Josef Zechner. Plus, their expected rate of return was lower, as investors seemingly perceived them to be less risky going forward, the same research finds.

Says Davis, “The average person was positively surprised by their ability to be productive at home. We can anticipate the technology, platforms, and products that support working from home will get better over time.”

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