oecd science, technology and industry outlook 2012 · grc hun irl ita jpn lux nld prt pol svn swe...

OECD Science, Technology and Industry

Outlook 2014

Sandrine KERGROACH

Country Studies and Outlook Division (DSTI/CSO)

OECD Directorate for Science, Technology and Innovation

Outline

• STI Outlook: a few words

• Finland: some structural aspects of national innovation system and performance

• Particular focus on public support to business R&D and innovation

– Two major global trends : globalisation and economic recovery…

– … that are shaping innovation policies worldwide

2

OECD STI Outlook: 20-year tradition

• “What’s new in the field of science, technology and innovation policy? “

• International review of key recent trends in STI for the STI policy community and analysts

• Based on latest STI policy information and indicators

• OECD Flagship publication

3

Drawing on a unique policy questionnaire

4

Country coverage of the STI Outlook

from 2008 to 2014

5

Covering the full scope of innovation

policy

Complexity!

The three components of the STI Outlook 2014

6

COUNTRY PROFILES

POLICY PROFILES

OVERALL STI PERFORMANCE AND POLICY TRENDS

Finland: structural features and performance

7

COUNTRY PROFILES

Benchmarking performance

8

Normalised index of performance relative to the median values in the OECD area (Index median = 100)

Finnish STI actors perform well by

OECD standards

BERD is primarily performed by HT

manufacturing and large domestic firms

9

Business R&D expenditure, % total or sub-part, 2011

Benchmarking performance

10

Normalised index of performance relative to the median values in the OECD area (Index median = 100)

Finland’s position in international STI

cooperation is mixed

Selected key messages

11

POLICY PROFILES

OVERALL STI PERFORMANCE AND POLICY TRENDS

Selected trends for STI and national STI

policies

12

Trend 1 • Shifts in global STI landscape

Trend 2 • A modest recovery

Trend 3 • Persistent „grand‟ challenges

Trend 4 • The promises of technology

Trend 4 • Adjustments in STI policies

Trend 5 • Public support to firms

Trend 6 • Public research policy

The rise of Global Value Chains (GVCs)

13Economies participate to GVCs both as users of foreign inputs and as suppliers of intermediate goods and services

Multinationals (intra-firm trade

+ FDI)

Fragmentation of production processes

globally, including R&D, design

14

Increasing sophistication of production

becoming more knowledge-based

Automotive manufacturers view leadership in control software as vital

Chevrolet Volt has 10,000,000 lines of code.

GVCs have changed the nature of global

competition

• Competitive advantage increasingly driven by innovation….

• … in turn driven by investments in intangibles (KBC beyond R&D)

16

Computerised information

• Software• Databases

Innovative property

• Patents• Copyrights• Trademarks• Design

Economic competencies

• Brand equity• Firm-specific

human capital• Business

networks• Organisational

know-how

Reach segments with higher valued added (and job creation) in GVCs

4%

6%

8%

10%

12%

14%

16%

18%

1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011

Inve

stm

ent (

% o

f adj

uste

d GD

P)

Investment in KBC

Investment in tangibles

Business investment in KBC and tangible assets in the United States, % GDP, 1972-2011)

17

Investment in KBC is growing in importance

The need to develop KBC has

changed global R&D landscape

18

GERD, million USD 2005 PPP, 2000-12 and projections to 2024

Source: OECD estimates based on OECD MSTI database, June 2014.

R&D intensity, % GDP (2012)

EU28 = 1.97%China = 1.98%

Innovation for strategic positioning in

GVCs

19

• Growing worldwide competition/availability for talent and knowledge-based assets (increasingly mobile).

• Attracting foreign direct investments (FDI) and integrating SMEs into global supply chains

• Emergence of innovation hubs based on strong local “knowledge triangles” and globally interconnected .


policies

20








Innovation in the crisis

21

Annual growth rate of GDP and GERD, OECD, 1993-2013 and projections to 2014 and 2015

Source: OECD Economic Outlook no95 Database, May 2014; OECD Main Science and Technology Indicators (MSTI) database, June 2014.

The buffer effect of public R&D

expenditure has faded

22

Annual growth rate of GDP and GERD, constant prices, 1993-2013 and projections to 2014 and 2015

Source: OECD Economic Outlook no95 Database, May 2014; OECD Main Science and Technology Indicators MSTI database, June 2014.

Knowledge-intensive investments have

been relatively preserved

23

Source: OECD MSTI, June 2014, OECD National Accounts Database, April 2014.

recovered earlier than in physical assets

Reluctance of firms to engage profits and build new production capacity

Corporate gross fixed capitalformation

Central role of knowledge-based assets in market competition

Budgets are levelling off or receding…

24

Public R&D budgets (GBAORD), as % of GDP, 2013 compared to 2011

Source: OECD estimates based on OECD MSTI database, June 2014.

The shock of the crisis is not fully

absorbed

25

• A strong resurgence in R&D and innovation in the next years is unlikely

• Governments‟ financial capacity to intervene in the field of STI is limited due to budgetary pressure

• Future growth in innovation activities is likely to be primarily driven by business investments.

Maintaining jobs and economic growth in open economies requires greater competitiveness (48 million people unemployed in the OECD)


policies

26








A broader view of innovation policy

27

New dimension to STI policy design – appropriateness of national policy framework? (risk of leakages of public money, profit shifting strategies etc.)

Building attractive ecosystems (education, research and infrastructure)

Better access to finance for innovative entrepreneurship

Offering favourable framework conditions (marketcompetition, IPRs, tax etc.)

Strenghtening a cluster approach and smart specialisation

Features of new industrial policies

“Hot” issue: Building attractive

ecosystems

28

Source: Country responses to the STI Outlook policy questionnaire 2014.

National STI policy priorities, country self-assessment, 2012-14

Maintaining access to finance to

business R&D and entrepreneurship

29

Substantial changes in various STI policy areas, country self assessment, 2012-14

Source: Country responses to the STI Outlook policy questionnaire 2014.

Governments have increased financial

support to business R&D since 2007

30Source: OECD, MSTI Database, June 2014; OECD data collection on R&D tax incentives, 2013, and country responses to the OECD STI Outlook policy questionnaire 2014.

In most countries, 10% to 20% of business R&D is funded by public money.

As a % of total BERD

Driven by more generous R&D tax

incentives -> tax competition?

31Source: OECD, based on OECD R&D tax incentive data collection, 2013; country responses to the OECD STI Outlook policy questionnaire 2014 and OECD MSTI Database, June 2014

Reallocation of resources is crucial for

KBC investments

32

Product market regulations Bankruptcy law Employment protection legislation

AUSAUT

BEL

CAN

CZEDEU

DNK

ESP

FIN

FRA

GBR

GRC

HUN

IRL ITA

JPN

LUX

NLD

POLPRT

SWE

USA

0

0.02

0.04

0.06

0.08

0.1

0.12

0 0.5 1 1.5 2 2.5 3

PMR

KBC Investment to GDP

y = -0.031x + 0.116

T-statistics: -3.92***

AUSAUT

BEL

CAN

CZE

DEU

DNK

ESP

FIN FRA

GBR

GRC

HUN

IRLITA

JPN

LUX

NLD

POLPRT

SVN

SWE

USA

0

0.02

0.04

0.06

0.08

0.1

0.12

0 5 10 15 20 25

Bankruptcy law

y = -0.002x + 0.086



AUS AUT

BEL

CAN

CZE

DEU

DNK

ESP

FIN

FRA

GBR

GRC

HUN

IRL

ITA

JPN

NLD

POL

PRT

SWE

USA

0

0.02

0.04

0.06

0.08

0.1

0.12

0 1 2 3 4 5

EPL

y = -0.031x + 0.116



Product market regulations Bankruptcy law

Employment protection legislation

• KBC investments to GDP

• The accumulation and optimal use of KBC requires experimentation => effective reallocation of resources + well-functioning debt and equity funding systems

More targeted approach in the policy mix

for business R&D and innovation

33Source: Country responses to the STI Outlook policy questionnaire 2014.

Changing balance in the policy mix for business R&D and innovation, based on own country ranking, 2014

For further reading…

www.oecd.org/sti/outlook

34

Sandrine [email protected]

THANKS!

mailto:[email protected]





Finland maintains its RTA in ICT

35

Revealed technological advantage, % PCT patents , 2009-11

36

Labour productivity deteriorated

significantly

Source: OECD Productivity Database, May 2014.

oecd science, technology and industry outlook 2012 · grc hun irl ita jpn lux nld prt pol svn swe...

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