Download - Innovation and r&d
OECD’s Innovation Strategy:Key Findings and Policy Messages
Overview
• Why an “Innovation Strategy”?
• What is OECD’s Innovation Strategy?
• What are some of the implications for countries?
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Why an Innovation Strategy?
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A Pre-crisis drop in productivity...
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5
0
10
20
30
40
50
60
70
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Em
iss
ion
s (G
t C
O2)
WEO 2007 450 ppm case ETP2008 analysis
BLUE Map emissions 14 Gt
Baseline emissions 62 Gt
CCS industry and transformation (9%)
CCS power generation (10%)
Nuclear (6%)
Renewables (21%)
Power generation efficiencyand fuel switching (7%)
End use fuel switching (11%)
End use electricity efficiency (12%)
End use fuel efficiency (24%)
Source: International Energy Agency, Energy Technology Perspectives 2008: Scenarios and Strategies to 2050.
...combined with huge global challenges...
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...and the lasting effects of the crisis.
Revised OECD projections: November 2008 vs. November 2009
11/2009
11/2008
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What is OECD’s Innovation Strategy?
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A “horizontal" approachCutting across policy areas
Exploring innovation
from a wide range of policy perspectives
Development
Education & skills
Territorial developmentConsumer policy
Environment
Trade
Tax
Investment
Information and communications
Industry and entrepreneurship
Science and technology
Statistics
Public governance
Competition
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A series of products• A short Ministerial paper setting out the challenges and
priorities for action on innovation, combined with a set of policy principles
• An analytical report, providing evidence on the main innovation drivers and processes and policy recommendations
• Measuring Innovation, presenting a set of policy-relevant indicators that will enable countries to position themselves on a range of policies and innovation outcomes, and proposing a forward looking measurement agenda
• In-depth thematic reports on key issues
• The beginnings of a policy handbook, that will enable countries to examine their own performance and system, and provide tools and examples to take action.
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What are some of the implications for countries?
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Finding 1:Innovation today involves the
interaction of a system
R&D is only one element
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1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20080.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Japan
China
OECD
EU27
%
United States
R&D is critical to innovation... Gross domestic expenditure on R&D, 1994-2008
As a percentage of GDP
Source: OECD (2009), Main Science and Technology Indicators 2009/2, December.
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Direct and indirect government funding of business R&D and tax incentives for R&D, 2007As percentage of GDP
Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on NESTI 2009 R&D tax incentives questionnaire.
...and is the main focus of public support.
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But innovation is more than R&DNew-to-market product innovators, 2004-06
As a percentage of innovative firms by R&D status
Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on OECD, Innovation microdata project.
0
10
20
30
40
50
60
70
Au
stria
Cze
ch R
epub
lic
Ice
lan
d (2
002
-04
)
Luxe
mbo
urg
Irela
nd
Sw
eden
Ne
the
rlan
ds
Est
onia
Ch
ile
Ca
nad
a (2
002
-04
, m
anu
fact
urin
g)
No
rwa
y
Be
lgiu
m
Me
xico
(20
06-0
7)
De
nmar
k
Italy
Japa
n (1
999
-20
01)
So
uth
Afr
ica
(200
2-
04)
Sp
ain
Au
stra
lia (2
006
-07
)
Po
rtug
al
Un
ited
Kin
gdo
m
Ko
rea
(20
05-0
7,
man
ufa
ctu
ring
)
Innovative firms without R&D Innovative firms with in-house R&D%
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Firms collaborate with each otherFirms with national/international collaboration on innovation, 2004-06
As a percentage of innovative firms
Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on OECD, Innovation microdata project.
0
10
20
30
40
50
60
Fin
lan
d
Ch
ile
Sw
ed
en
Cze
ch R
ep
ub
lic
Ne
the
rla
nd
s
Au
stri
a
So
uth
Afr
ica
(20
02
-0
4) B
elg
ium
No
rwa
y
Est
on
ia
De
nm
ark
Lu
xem
bo
urg
Ne
w Z
ea
lan
d (2
00
6-
07
)
Ice
lan
d (2
00
2-0
4)
Un
ited
Kin
gd
om
Ire
lan
d
Jap
an
(19
99
-20
01
)
Ca
na
da
(20
02
-04
, m
an
ufa
ctu
ring
)
Ch
ina
Au
stra
lia (2
00
6-0
7)
Ko
rea
(20
05
-07
, m
an
ufa
ctu
ring
)
Po
rtu
ga
l
Sp
ain
Ge
rma
ny
Italy
National collaboration only International collaboration%
Innovation is multidisciplinary…
Green Technology
Chemical Engineering Chemistry Material
Science Physics
Agricultural and Biological
Sciences
Immunologyand
Microbiology
Biochemistry, Genetics and
Molecular Biology
Energy
Earth and Planetary Sciences
Engineering
EnvironmentalScience
17.4%10.5%
4.9%
7.5%5.7%3.7%6.6%
4.8%
10.6%
9.5%14.2%
ScientificPapers
Patents
Patent-science link via citations
(100% = all citations)
Legend:
Scientific publications cited by “green” patents
Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on Scopus Custom Data, Elsevier; OECD, Patent Database; and EPO, Worldwide Patent Statistical Database.
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…and the Internet has been a catalyst.
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Policy Message 1: Policies need to be upgraded to reflect
that innovation is a system
Strong innovation performance relies on a well-functioning system:
• Involving both “push” (supply R&D and HRST) and “pull” (demand) factors (markets, consumers; standards;
public procurement);
• Linking the elements of the system (labour mobility; University / Industry; diffusion; MNE & SME).
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Policy Message 1 bis: Governments should foster platforms
and markets that strengthen the system
• ICT as a platform that lowers the barriers to innovation, network formation and collaboration (Broadband);
• Provide access to public data (e.g. Maps, weather, publicly funded research data);
• Develop markets and networks for knowledge that can service many actors (e.g. market for patent licenses).
Finding 2: The mix of actors is changing
• Need to broaden our perspective from:– Multinational enterprises;– Public research organisations & universities; – The G7.
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33.5 13.5 4.5 4.2 3.0 2.8 1.6 1.6 0.9 0.7 0.7 0.4 0.3
0
5
10
15
20
25
Un
ited
Sta
tes
Ge
rma
ny
Fra
nce
Ne
the
rla
nd
s
Un
ited
Kin
gd
om
Sw
ed
en
Fin
lan
d
Italy
De
nm
ark
Be
lgiu
m
Au
stri
a
Sp
ain
No
rwa
y
%Share of patents filed by firms under 5 years old
Share of countries in PCT filed by firms (%)
Patenting activity of young ( <5 years) firms, 2005-07PCT patent filings by young firms as a percentage of filings by firms in each country
Note : Data refers to patent applications filed under the Patent Co-operation Treaty (PCT) with a priority in 2005-07. Patent counts are based on the country of residence of the applicants. The share of young firms is derived from the set of patent applicants successfully matched with business register data.
New firms are very important to innovation...
Source: OECD based on OECD, HAN Database, October 2009 and ORBIS© Database, Bureau Van Dijk Electronic Publishing.
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...and job creation.
0
20
40
60
80
100
120
140
160
Share of Employment Share of Net Growth
Perc
en
t
Contribution of business start-ups to overall employment and the net employment growth (US, 1992-2005)
Source: “Who Creates Jobs? Small vs. Large vs. Young” (Haltiwanger, Jarmin and Miranda, February 2010).
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Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on Scopus Custom Data, Elsevier, December 2009.
Scientific collaboration with BRIC countries, 1998 and 2008As a percentage of total international co-authored articles
North America Europe Far East & Oceania (excluding China)
China0
3
6
9
12
15
18
1998 2008%
And new players are emerging, spreading innovative capabilities...
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Patents per million inhabitants, Europe, average 2005-07
...but innovation is not “flat.”
Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on OECD REGPAT Database and OECD, Regional Database.
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Policy Message 2: Develop a Strategy for Innovation
• A “horizontal” approach:– Leadership & long-term vision;– Co-ordination via the budget;– Seek coherence: young ≠ small;– Division of labour with regions: build on indigenous
strengths; seek a critical mass.
• Evaluate & monitor through improved measures (measurement agenda);
• Strengthen multilateral co-operation of STI.
Finding 3: Innovation is already a fundamental economic investment...
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Investment in fixed and intangible assets as a share of GDP, 2006
Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on COINVEST [www.coinvest.org.uk], national estimates by researchers, EU KLEMS database and OECD, Annual National Accounts Database.
0
5
10
15
20
25
30
Slo
vak
Re
pu
blic
Italy
Cze
ch R
ep
ub
lic
Jap
an
(20
05
)
Au
stra
lia
Sp
ain
Ca
na
da
(20
05
)
Po
rtu
ga
l (2
00
5)
Au
stri
a
Sw
ed
en
Fra
nce
De
nm
ark
Ge
rma
ny
Fin
lan
d
Un
ited
Sta
tes
Un
ited
Kin
gd
om
% Machinery and equipment Software and databases
R&D and other intellectual property products Brand equity, firm specific human capital, organisational capital
intangibles
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...and a driver of growth.Innovation accounts for a large share of labour productivity growth
Percentage contributions, 1995-2006, in %
0
1
2
3
4
5
6
7
% Contribution from intangible capital Contribution from tangible capital Labour productivity growth
Source: OECD, based on research papers, 2009.
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21st Century Innovation: the iPod
Distribution of the value added
• 299 US$– 75$ profit to US (Apple)– 73$ wholesale/retail US
(Apple)
The Apple iPod = 299$ of Chinese exports to US
http://blogs.computerworld.com/node/5724
• iTunes Music Store (2003)– 70% digital market share– Big 5 recording companies
– 75$ to Japan (Toshiba)– 60$ 400 parts from Asia– 15$ 16 parts from the US– 2$ assembly by China
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Policy Message 3:Innovation: “Now more than ever”
• “Stay the course”: continue to support long-term investments in innovation (basic R&D);– Not an “on / off” incremental investment, but accumulative– Cutting spending could limit growth and the ability to address
global challenges
• Not all policies require large public investment– Reform and streamline existing policies; remove barriers; – Use demand-side measures (procurement, standards);– Inject innovation into the public sector (e-Gov).
• Better understand the broader role of innovation and its impact on economic growth
Conclusion or “What are some of the take-aways?”
• Innovation – Now more than ever.
• Innovation is broader than R&D – it is a system. Policies for innovation, not a narrow set of innovation policies;
• Innovation policy is more than budget allocations.
• Better measures to reflect the central role of Innovation to the economy. New data that: Confirm some of our intuition (collaboration) Challenge some priors (small vs. young; drivers of growth) Set out an important measurement agenda.
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