Transcript OECD’s Innovation Strategy: Key Findings and Policy Messages Andrew Wyckoff, OECD Overview • Why an “Innovation Strategy”? • What is OECD’s Innovation Strategy? • What are.

OECD’s Innovation Strategy:
Key Findings and Policy Messages
Andrew Wyckoff, OECD
Overview
• Why an “Innovation Strategy”?
• What is OECD’s Innovation
Strategy?
• What are some of the implications
for countries?
2
Why an Innovation Strategy?
3
A Pre-crisis drop in productivity...
4
4
...combined with huge global
challenges...
70
CCS industry and transformation (9%)
Baseline emissions 62 Gt
Emissions (Gt CO2)
60
CCS power generation (10%)
Nuclear (6%)
50
Renewables (21%)
40
Power generation efficiency
and fuel switching (7%)
30
End use fuel switching (11%)
20
End use electricity efficiency (12%)
BLUE Map emissions 14 Gt
End use fuel efficiency (24%)
10
0
2005
WEO 2007 450 ppm case
2010
2015
2020
ETP2008 analysis
2025
2030
2035
2040
2045
2050
Source: International Energy Agency, Energy Technology Perspectives 2008: Scenarios and Strategies to 2050.
5
...and the lasting effects of the crisis.
Revised OECD projections: November 2008 vs. November 2009
11/2008
11/2009
6
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What is OECD’s Innovation
Strategy?
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A “horizontal" approach
Cutting across policy areas
Education & skills
Industry and
entrepreneurship
Environment
Development
Tax
Competition
Science and
technology
Exploring
innovation from
a wide range of
policy
perspectives
Investment
Information and
communications
Statistics
Public governance
Trade
Consumer policy
Territorial
development
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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 policyrelevant 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
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provide tools and examples to take action.
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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R&D is critical to innovation...
%
4.0
Gross domestic expenditure on R&D, 1994-2008
As a percentage of GDP
Japan
3.5
3.0
United States
2.5
OECD
2.0
EU27
1.5
China
1.0
0.5
1994
1996
1998
2000
2002
2004
Source: OECD (2009), Main Science and Technology Indicators 2009/2, December.
2006
2008
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...and is the main focus of public support.
Direct and indirect government funding of business R&D and tax incentives for R&D, 2007
As percentage of GDP
13
Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on NESTI 2009 R&D tax incentives questionnaire.
But innovation is more than R&D
New-to-market product innovators, 2004-06
As a percentage of innovative firms by R&D status
Innovative firms without R&D
%
70
Innovative firms with in-house R&D
60
50
40
30
20
Korea (2005-07,
manufacturing)
United Kingdom
Portugal
Australia (2006-07)
Spain
South Africa (200204)
Italy
Denmark
Mexico (2006-07)
Belgium
Norway
Canada (2002-04,
manufacturing)
Chile
Estonia
Netherlands
Sweden
Ireland
Luxembourg
Iceland (2002-04)
Czech Republic
Austria
0
Japan (1999-2001)
10
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Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on OECD, Innovation microdata project.
Firms collaborate with each other
Firms with national/international collaboration on innovation, 2004-06
As a percentage of innovative firms
%
National collaboration only
International collaboration
60
50
40
30
20
Italy
Germany
Spain
Portugal
Korea (2005-07,
manufacturing)
Australia (2006-07)
China
Canada (2002-04,
manufacturing)
Japan (1999-2001)
Ireland
United Kingdom
Iceland (2002-04)
New Zealand (200607)
Luxembourg
Denmark
Estonia
Norway
Belgium
South Africa (200204)
Austria
Czech Republic
Sweden
Chile
Finland
0
Netherlands
10
Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on OECD, Innovation microdata project.
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Innovation is multidisciplinary…
Scientific publications cited by “green” patents
Chemical
Engineering
Material
Science
Chemistry
Physics
Legend:
14.2%
9.5%
Engineering
10.6%
17.4%
10.5%
4.9%
Green
Technology
Energy
6.6%
Biochemistry,
Genetics and
Molecular Biology
3.7%
Agricultural
and Biological
Sciences
Patent-science link
via citations
(100% = all citations)
Scientific
Papers
7.5%
4.8%
Immunology
and
Microbiology
Patents
5.7%
Earth and
Planetary
Sciences
Environmental
Science
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.
…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).
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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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New firms are very important to innovation...
Patenting activity of young ( <5 years) firms, 2005-07
PCT patent filings by young firms as a percentage of filings by firms in each country
%
3.0
2.8
1.6
1.6
0.9
0.7
0.7
0.4
0.3
Belgium
Austria
Spain
Norway
4.2
Denmark
4.5
Italy
13.5
Finland
33.5
Sweden
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United Kingdom
Share of patents filed by firms under 5 years old
Share of countries
in PCT filed by firms (%)
20
15
10
5
Netherlands
France
Germany
United States
0
Source: OECD based on OECD, HAN Database, October 2009 and ORBIS© Database, Bureau Van Dijk Electronic Publishing.
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.
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...and job creation.
Contribution of business start-ups to overall employment and the net employment
growth (US, 1992-2005)
160
140
120
Percent
100
80
60
40
20
0
Share of Employment
Share of Net Growth
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Source: “Who Creates Jobs? Small vs. Large vs. Young” (Haltiwanger, Jarmin and Miranda, February 2010).
And new players are emerging, spreading
innovative capabilities...
Scientific collaboration with BRIC countries, 1998 and 2008
As a percentage of total international co-authored articles
1998
%
18
2008
15
12
9
6
3
0
North America
Europe
Far East & Oceania
(excluding China)
China
Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on Scopus Custom Data, Elsevier,
December 2009.
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...but innovation is not “flat.”
Patents per million inhabitants, Europe, average 2005-07
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Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on OECD REGPAT Database and
OECD, Regional Database.
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.
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Finding 3: Innovation is already a
fundamental economic investment...
Investment in fixed and intangible assets as a share of GDP, 2006
%
Machinery and equipment
Software and databases
R&D and other intellectual property products
Brand equity, firm specific human capital, organisational capital
30
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intangibles
20
15
10
5
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.
United Kingdom
United States
Finland
Germany
Denmark
France
Sweden
Austria
Portugal (2005)
Canada (2005)
Spain
Australia
Japan (2005)
Czech Republic
Italy
Slovak Republic
0
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...and a driver of growth.
Innovation accounts for a large share of labour productivity growth
Percentage contributions, 1995-2006, in %
%
Contribution from intangible capital
Contribution from tangible capital
Labour productivity growth
7
6
5
4
3
2
1
0
Source: OECD, based on research papers, 2009.
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21st Century Innovation: the iPod
The Apple iPod = 299$ of Chinese
exports to US
Distribution of the value added
• 299 US$
– 75$ profit to US (Apple)
– 73$ wholesale/retail US
(Apple)
– 75$ to Japan (Toshiba)
– 60$ 400 parts from Asia
– 15$ 16 parts from the US
– 2$ assembly by China
• iTunes Music Store (2003)
– 70% digital market share
– Big 5 recording companies
http://blogs.computerworld.com/node/5724
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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
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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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