Transcript Workshop on Productivity Bern 16-18 October 2006 Productivity Growth and Innovation in Switzerland: an International perspective Dominique Guellec Economic Analysis and Statistics Division Directorate for Science,

Workshop on Productivity
Bern 16-18 October 2006
Productivity Growth and Innovation in
Switzerland: an International perspective
Dominique Guellec
Economic Analysis and Statistics Division
Directorate for Science, Technology and Industry
Productivity and Innovation in Switzerland
 This presentation will compare productivity
patterns of Switzerland with other countries;
it will analyse the determinants of productivity
related to innovation, and in turn the
economic and institutional conditions which
influence innovation.

Structure of the presentation:
1) Productivity
2) Innovation
3) Framework conditions
2
Productivity and Innovation in Switzerland
Major source of information for this presentation:
The OECD Compendium of
Productivity Indicators 2006
3
Productivity and Innovation in Switzerland
Graph 1.1. Catch-up and convergence in OECD income
levels, 1950-2005, US = 100
140.0
120.0
100.0
80.0
60.0
France
40.0
20.0
Germany
Sweden
Switzerland
Finland
19
50
19
53
19
56
19
59
19
62
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
0.0
4
Percentage gap with
respect to UD GDP per
Productivity
capita
Effect of labour
utilisation
and Innovation in
Percentage gap
with US GDP per
hour worked
Switzerland
d
erl an
Swi tz
ds
erl an
Neth
Graph 1.2. Income and
a rk
Denm
productivity levels, 2005
da
Cana
rali a
Aus t
ria
Aus t
en
Swed
iu m
Bel g
dom
Ki ng
d
e
t
i
Un
nd
Finl a
n
J apa
ce
Fra n
any
G erm
D
O EC
Ital y
9 (3)
EU-1
Spa in
-40
-30
-20
-10
0
-40
-30
-20
-10
0
10
-40
-30
-20
- 10
0
5
10
20
=
Growth of GDP per capita
Growth of GDP per hour
worked
+
Growth in labour
1995-2000
2000-2005
utilisation (1)
Finland
Australia
United
Kingdom
Sweden
Spain
Canada
United
States
Japan
OECD19 (2)
Denmark
EU15
Belgium
Austria
France
Netherlands
Germany
Switzerland
6
Italy
-2
0
2
4
6
-2
0
2
4
6
-2
0
2
4
6
Sw
ed
e
Fi n
nl
an
d
Ja
Sw
p
itz an
Un e
ite r lan
d
d
St
a
G te s
er
m
a
De ny
To nm
ta ark
lO
EC
D
Au
st
ria
Fr
an
c
Ca e
na
Be da
lg
iu
m
Un
ite EU
d
Ki -1 5
n
Ne gd
th om
er
la
n
Au d s
st
ra
lia
Sp
ai
n
%
Productivity and Innovation in Switzerland
Graph 2.1: GERD as a % of GDP - 1995-2004
(source OECD - MSTI database)
4.0
3.5
1995
2004
3.0
2.5
2.0
1.5
1.0
0.5
0.0
7
Ko
re
a
Ja
p
Sw an
Sw ed e
n
it z
er
la
nd
G
Un er m
ite
an
d
y
St
at
e
Fi s
nl
an
Be d
lg
iu
De m
To nm
ar
Un tal
k
ite OE
d
C
Ki
D
ng
do
m
EU
-1
Fr 5
Ne a n
c
th
er e
la
nd
Au s
st
ria
Sp
a
Ca in
na
da
%
Productivity and Innovation in Switzerland
Graph 2.2: BERD as a % of GERD - 1995-2004
(source OECD - MSTI database)
80
70
1995
60
2004
50
40
30
20
10
0
8
Sw
ed
e
Fi n
nl
an
d
Un Fra
ite
nc
d
e
St
at
e
Au s
s
G tria
er
m
a
Au ny
st
ra
De lia
To nm
ta ark
lO
EC
Ca D
Sw na
itz da
er
la
nd
Ne EU
Un th e 1 5
ite rla
n
d
Ki d s
ng
do
m
Ja
p
Be an
lg
iu
m
Sp
ai
n
Productivity and Innovation in Switzerland
Graph 2.3. Government funded R&D as a % of GDP - 2004
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
9
Productivity and Innovation in Switzerland
Graph 2.4. Share of the pharmaceutical sector in total BERD (2004)
40
35
30
25
20
15
10
5
0
Sw
i tz
er
la
n
D
U
en d
ni
te
m
ar
d
K
in k
gd
o
Be m
lg
iu
Sw m
ed
e
Fr n
an
ce
EU
-1
5
S
N
et pai
n
he
r
To lan
d
ta
lO s
EC
C D
an
U
ni
te ada
d
S
ta
te
s
Ja
pa
G
er n
m
an
Au y
st
Au ria
st
ra
li
Fi a
nl
an
d
%
Source: OECD - MSTI data base
10
Productivity and Innovation in Switzerland
Graph 2.5. Patenting intensity by technical fields (number of
patent families over GDP, 2002)
4.5
4.0
Biotech
3.5
ICT
3.0
Other technical
fields
2.5
2.0
1.5
1.0
0.5
F
Sw inla
itz nd
er
la
nd
Ja
p
Sw an
e
G d en
e
Ne r ma
n
th
Un erl y
a
i
Eu ted nd s
ro St
pe ate
an
s
U
ni
o
Fr n
an
Be ce
lg
i
Un De um
ite nm
d
Ki ark
ng
do
m
Au
st
r
Ca ia
n
Au ada
st
ra
lia
Ita
ly
Ire
la
nd
Sp
ai
n
0.0
11
Graph 2.6. Share of countries in EPO patent
Productivity
and Innovation in Switzerland
applications,
2003
35%
30%
Nanotech
25%
Total
20%
15%
10%
5%
l
ae
Is
r
Be n
lg
iu
m
ed
e
da
Sw
an
a
C
It a
ly
s
et
he
r
er
la
N
it z
la
nd
nd
ea
Ko
r
Sw
G
er
Ja
pa
n
m
an
y
U
Fr
ni
an
te
ce
d
Ki
ng
do
m
U
ni
te
d
St
at
es
0%
12
Productivity and Innovation in Switzerland
Graph 2.7. Contribution of ICT manufacturing to value added
per person engaged, in % points
1.0
0.8
1990-95
1995-2002*
0.6
0.4
0.2
la
nd
Ire
d
la
n
n
Fi
n
ed
e
Sw
ni
te
d
St
at
es
pa
n
Ja
U
e
nc
Fr
a
Be
lg
i
um
nd
it z
er
la
om
Sw
Ki
ng
d
st
ria
d
m
an
y
k
G
er
en
m
ar
da
D
an
a
C
Au
ni
te
U
N
et
he
r
-0.2
It a
ly
la
nd
s
0.0
13
Productivity and Innovation in Switzerland
Graph 2.8. International co-inventions
(Share of domestic inventions with at least one foreign resident as coinventor)
40
30
20
2000-02
10
0
Be
lg
iu
m
Sw Irel
i tz an d
er
la
n
C d
an
ad
a
U
ni Au
te
d s tria
Ki
ng
do
m
Sp
D a in
en
m
Au a rk
st
ra
Sw li a
ed
e
Fr n
an
N
et
he ce
rl a
nd
s
F
U
ni inl a
te
d nd
St
a
G te s
er
m
an
y
Ita
ly
Eu
ro
pe EU
an 15
U
ni
on
O
EC
D
Ja
pa
n
%
1990-92
14
Productivity and Innovation in Switzerland
Graph 2.9. Domestic ownership of foreign inventions
(share of inventions owned by domestic residents which have been invented
abroad)
60
%
50
40
1990-92
30
2000-02
20
10
Sw
i tz
er
la
nd
N Irel
a
et
he n d
rl a
n
Be ds
lg
i
Sw u m
ed
e
Au n
st
r
C ia
an
ad
Fi a
nl
an
U
ni Fra d
te
n
d
Ki ce
ng
d
D om
U en
ni
m
te
ar
d
St k
O
a
EC te
D s
To
G
er tal
Eu
m
ro
pe Au any
an s t
U ra
Eu nio li a
ro
n
pe
(1
an 5 )
U
ni
on
Sp
ai
n
Ita
ly
Ja
pa
n
0
15
Productivity and Innovation in Switzerland
Graph 2.10. Foreign ownership of domestic inventions
(share of domestic inventions owned by foreign residents)
50
40
1990-92
2000-2002
%
30
20
10
Be
lg
iu
Ire m
la
Un
nd
A
ite
u
d
s
Ki tria
ng
d
Ca om
na
d
Sp a
Au ain
st
ra
lia
Sw Fra
itz nce
er
De land
Ne nm
th ar
er k
la
n
Sw d s
ed
en
Ita
O ly
EC
G
Un er D
ite ma
d
n
St y
at
Eu
es
ro
pe EU
an 15
U
n
Fi ion
nl
an
Ja d
pa
n
0
16
Productivity and Innovation in Switzerland
Graph 3.1. Graduation rates at doctoral level, 2002
3.0
Other fields
2.5
2.0
Science and
Engineering
1.5
1.0
0.5
Ja
pa
n
Ca
na
da
De
nm
ar
k
Sp
ai
n
Be
lg
iu
m
Au
s
Ne tra l
ia
th
er
la
Un
nd
ite
s
d
St
at
es
Un
Fr
an
ite
ce
d
Ki
ng
do
m
Au
st
ria
Fi
nl
an
d
G
er
m
an
Sw
y
it z
er
la
nd
Sw
ed
en
0.0
17
Sw
Sw ed
itz en
er
la
n
Fi d
nl
Un De and
ite nm
d
Ki ark
n
Ne gd
th om
er
la
Au nd s
st
ra
l
Un Ca ia
ite na
d
d
St a
at
Be e s
lg
iu
Au m
st
ria
EU
1
G
er 5
m
an
Fr y
an
c
O e
EC
D
Ja
pa
Ire n
la
nd
Sp
ai
n
Ita
ly
Productivity and Innovation in Switzerland
Graph 3.2. Scientific articles per million population - 2001
1 200
1 000
800
Other fields
Life sciences
600
400
200
0
18
Productivity and Innovation in Switzerland
Graph 3.3. Venture capital investment flows as % of GDP
1995-2002
0.6
0.5
0.4
Buy-outs and others
Expansion
Early stage
0.3
0.2
0.1
IR
L
FI
N
BE
L
SW
E
G
BR
NL
D
CA
N
US
A
IT
A
CH
E
DN
K
ES
P
DE
U
FR
A
JP
N
AU
T
AU
S
0.0
19
Productivity and Innovation in Switzerland
Graph 3.4. Overall product market regulation 2003 (Source: OECD 2005)
2
1.5
1
0.5
ly
Ita
Fr
an
ce
Sw
it z
er
la
nd
O
EC
D
an
y
G
er
m
Ja
pa
n
Ca
na
da
US
A
UK
0
20
Productivity and Innovation in Switzerland
Graph 3.5. Patents applications files by Public Research
Institutions as a % of total patents, 2001-2003
14
12
10
8
6
4
2
U
ni Au
te
d stra
Ki
ng lia
do
Be m
lg
iu
C m
an
ad
Fr a
an
ce
U
E
ni
te U1
d
St 5
at
es
Sp
ai
n
O
E
D CD
en
m
ar
k
It a
ly
K
Sw or
it z ea
er
la
nd
J
N
et apa
he
n
rla
G nds
er
m
an
Au y
st
r
Fi ia
nl
a
Sw nd
ed
en
0
21
a
Be ny
Sw lgiu
it z m
er
la
Ca nd
na
da
S
Ne
p
th ain
er
la
nd
s
To EU
ta -1
lO 5
EC
Un
D
ite Fin
l
d
Ki and
ng
do
Sw m
ed
Au en
Un
s
ite tra
lia
d
St
at
e
Au s
s
De tria
nm
ar
k
Ja
pa
Fr n
an
ce
G
er
m
%
Productivity and Innovation in Switzerland
Graph 3.6. Share of University research funded by
business - 2004
14
12
10
8
6
4
2
0
22
Productivity and Innovation in Switzerland
Conclusions (1)
 Switzerland features very well in terms of
GDP per capita. It is due to its high labour
utilisation, while the productivity of labour
is in the OECD average.

Productivity growth has been slow in
Switzerland over the past decade.
23
Productivity and Innovation in Switzerland
Conclusions (2)
 Switzerland is strong in knowledge
intensive industries (pharma, finance)
and its has all factors needed to be
innovative: High R&D expenditure, skilled
labour force, strong university system,
high internationalisation of R&D.

BUT: Switzerland is relatively weak in
emerging technology fields, where
entrepreneurship is the key factor.
24
Productivity and Innovation in Switzerland
Policy recommendations
=> Facilitate entrepreneurship in
emerging technology fields
 Reduce barriers to domestic competition
 Improve efficiency of public support for
R&D
 Raise efficiency of bankruptcy
procedures
25