1. OECD Science, Technology and Industry Outlook 2012From the higher education perspective Dominique GUELLEC (DSTI/CSO) Sandrine KERGROACH (DSTI/CSO) Directorate for Science, Technology and Industry Country Studies and Outlook Division (DSTI/CSO)
2. What’s innovation for? Oslo Manual: “Implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a neworganisational method in business practices, workplace organisation or external relations”. 2
3. Innovation to strengthen growth(OECD Innovation Strategy 2010)• Factor of productivity and job creation• Engine of growth in both advanced and emerging economiesCurrent macroeconomic context• Sluggish labour productivity growth for several years• Growing competitive pressure by emerging economies on knowledge-intensive segments of markets => need to climb the value added ladder• Economic crisis hit innovation and R&D and conditions for recovery are still fragile => Restoring growth and competitiveness => New sources of growth 3
4. Innovating for social and global challengesGreen innovation• Urgent need to address climate change and tackle natural disasters• Greening of innovation policy in most OECD countriesAgeing society• Innovation can help the elderly remain healthy, autonomous and active (e.g. biomedicine, robotics, and IT)• Still, declining workforces pose a risk for long-term innovation capacityInnovation for development• Engine for economic and social development (e.g. health, food/water, education, social inequalities, etc.)• Tech, non-tech, incremental and social innovation => New market and learning opportunities!
5. Why does education matter for innovation?• Process of knowledge creation, absorption and adaptation• Requires a pool of technical and soft skills (e.g. green skills?)• A broad innovation culture (e.g. public understanding of S&T, entrepreneurial spirit) to value the contribution of S&T and innovation to society• Lifelong Learning to ensure a permanent upgrade of human capital and to help elderly to remain active => formal education• Exploit new pockets of skills (e.g. women) => Empower new ways of thinking, preserve diversity, and ensure equity.• Education is an area of innovation too : increased attention paid by innovation policy makers to the role public sector may play to stimulate/diffuse innovation (new public services delivery, new organisational arrangements, etc.) 5
6. Outline• The OECD STI Outlook 2012• Impact of the crises on innovation : focus on highly skilled employment and future skills demand• Country responses to the crises: recent changes in innovation policy and particular attention paid to education• Innovation and innovation policy outlook: how may higher education institutions (HEIs) be affected? 6
7. The OECD STI Outlook : What’s new in the field of STI policy?• + 20 year tradition• Review key Science, Technology and Innovation (STI) trends• Biennial event for the STI policy community and analysts around latest policy information and indicators• OECD Flagship publication 7
8. 43 countries participatingto the STI Outlook policy survey 2012… 8
9. Drawing a unique inventory of major recent national STI policy developments Overall STI Governance strategy Innovation policy Science governance base Green Businessinnovation R&D and innovation Competences New and capacity challenges Recent to innovate Entrepre- shifts in neurship national innovation policy Public-sector innovationCulture forinnovation Human resources for innovation Interactions ICTHR policies infrastructures Clusters and Globalisation Education regions Open IPRs Commercialisation science 9
10. The four components of the STI Outlook 2012 CRISIS AND COUNTRY OUTLOOK PROFILES SOCIAL AND POLICY GLOBAL PROFILES CHALLENGES 10
11. Innovation in the crisis and beyondCRISIS AND OUTLOOK 11
12. The 2008 financial crisis and the subsequent public debt crisis…• Business cycle downturn: retraction of industrial production and world GDP, trade collapse, raising unemployment Reduction in the demand of products (e.g. higher-quality innovative products) Raise uncertainty about future demand• Credit crunch: deleveraging of banks and large firms and reduction in liquidities in the financial system => Restrict innovation investments, consumption, firms‟ financing opportunities (e.g. SMEs that rely more on external financing)• Market speculation on the sustainability of sovereign debts Pursue fiscal consolidation in a context of growing pressure on pension and health budgets Limit public financial intervention 12
13. … had a strong negative impact on business innovation and R&D Index 2006 = 100 Business R&D expenditures PCT patent applications TrademarksSource: Highlights of the OECD STI Outlook 2012, based on OECD, Main Science, Technology Indicators (MSTI) 13Database, June 2012 and World Intellectual Property Organisation (WIPO), Statistics on the PCT system, July 2012.
14. A deep drop followed by a fragile recovery Patent Filings are hit by the crisis PCT Filings; 5 months moving average; yearly growth rates (%)15 US EU World10 5 0 -5-10 Collapse of Lehman Brothers-15 14Source: WIPO.
15. The crisis and the recovery have been uneven across industries… Sales, R&D and employment growth for firms in high-, medium-high and low-technology industries, 2008-09 and 2009-10 (%) 2008-09 2009-10 Companies in high-tech industries Companies in medium-tech industries Companies in medium-tech industries Companies in low-tech industries Companies in low-tech industries (N. 475) (N. 359) (N. 359) (N. 103) (N. 103)% Sales Sales R&D Employment Sales Sales R&D Employment Employment Sales Sales R&D Employment1510 9.9 9.4 5.5 5.6 4.5 3.9 4.4 4.3 3.8 5 3.0 1.5 0.6 0 -0.6 -1.4 -5 -2.9 -3.8 -6.5-10-15 -16.3-20 15 Source: OECD STI Outlook 2012 based on EU (2011), EU industrial R&D investments Scoreboard.
16. Certain countries have better resisted the crisis than others: China, Korea Business funded R&D, yearly growth rate (%) 35.0 30.0 25.0 20.0 15.0 Korea Total OECD 10.0 China 5.0 0.0 -5.0 -10.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 16Source: OECD STI Outlook 2012 based on OECD Main Science and Technology Indicators (MSTI) Database, June 2012.
17. The ‘creative destruction’ process broke down Creation of new businesses Bankruptcies Australia Finland Germany Australia Japan Finland Denmark United States Germany Netherlands150 150 Collapse of Collapse of140 140 Lehman Brothers Lehman Brothers130 130120 120110 110100 10090 9080 8070 7060 6050 50 17 Source: OECD STI Outlook 2012 based on OECD (2012), Entrepreneurship at a Glance.
18. Unemployment of highly skilled has increased Quarterly unemployment rate for high-skilled workers for selected countries, 2005-11 France United Kingdom Canada Spain Estonia Greece Ireland% Italy Netherlands % Norway Portugal United States16 1614 Collapse of Collapse of 14 Lehman Brothers Lehman Brothers12 1210 10 8 8 6 6 4 4 2 2 0 0 Source: OECD STI Outlook 2012 based on OECD Main Economic Indicators Database and national Labour Force Surveys, March 2012. 18
19. In response, governments introduced short- term measures and longer-term reforms- Recovery plans (2009) were heavily loaded in S&T and innovation related expenses (infrastructures etc.)- Resilience of government R&D budgets that partly offset drop in business R&D- Provision of financial resources to businesses (e.g. direct funding, collateral, tax reliefs, VC funds), especially SMEs- Emphasize on smart specialisation- Structural reforms (labour market, framework conditions for entrepreneurship, reform of universities, etc.) Clear priority given to education and public research institutions 19
20. Main innovation policy trends POLICY PROFILES 20
21. High priority and increased resources allocated to Higher Education• New Higher Education strategy / plan (Estonia, Ireland, Israel, Netherlands, New Zealand, Slovenia) or high policy priority given to HE (Denmark)• Increased budgets for higher education and universities (India, Israel, Poland, Sweden, Switzerland, etc.)• Development of HE capabilities including infrastructures (Canada, Colombia, France, India, etc.)• Maintained or increased hiring of researchers at university during economic downturn (Italy) 21
22. Changes in the governance of HEIs• Reform of HEIs management and funding: confirmed trend in many countries towards greater autonomy and more competitive grant funding (away from „block‟ funding) – introduction of performance- and indicator-based allocation mechanisms• Strengthen evaluation of HEIs : enforcing HEIs evaluation by law (Hungary), establishing contracts/performance agreements with central government (Finland), building evaluation capacity, e.g. new methodology/guidelines/standards, SciSIP initiatives, etc.• Agencification: e.g. introduction of accreditation agency (Slovenia, Switzerland, etc.), independent funding agency (France, etc.), evaluation and coordination agencies (Argentina, etc.)• Shifts towards more thematic research in many countries 22
23. Strengthen education for innovation…Improve the teaching of STEM• Earlier STEM education (Colombia, Germany)• New teaching methods: increased hours of instruction (Germany, Ireland, Norway), new curricula, standards (Australia, Ireland, UK), new assessment practices (Austria, Norway, Poland)• Teacher training (Australia, Austria, Japan, etc.)Increase tertiary enrolment and attract more people to STEM• Financial incentives to students (Australia‟s income-contingent student loans, doctoral/postdocs fellowships etc.)• Tutoring (Sweden‟s free remedial classes, etc.)• Role models and mentorship, prizes, senior positions (e.g. attract women to S&T studies) (Flanders, Spain, South Africa, etc.) 23• Set quantitative targets increase the share of youth with higher
24. … Beyond STEMImproving the teaching of entrepreneurship• Strategy, guidelines and action plan for entrepreneurship education (Denmark, Finland, Norway, etc.)• Introduction of new learning practices, curricula and targeted school activities (Belgium, Estonia, Ireland, Norway, New Z., etc.)• Revision of the National Qualification Framework (Norway)• New teacher training (Australia, Austria, Japan, etc.)Improving entrepreneurial environment at universities and research institutions• Increase the number of business start-ups (grants, courses, etc.) (Germany, Norway)• Introduce new criteria of evaluation (number of spin- offs, patenting activity, research income from private sources, etc.) 24
25. Accelerate knowledge transfer to industry and societyImproving the conditions of technology transfer• Professionalisation and scaling-up of TTOs• Raise awareness of IPRs in the research community (courses) and the general public (e.g. China: media campaigns and education in primary and high schools)• Implement incubators, technoparks (Finland, Netherlands)• Encourage sectoral and international mobility of researchers and highly skilled (secondments, industrial PhD, grants, lower regulatory barriers, e.g. regarding grant or pension portability, or immigration laws, transferable skills, etc.)• Tax incentives for firms to contract public researchOpen science• Infrastructures to access data (Hungary), repositories/archives, open data (licenses etc.) 25
26. Internationalisation of HEIs• Higher Education Internationalisation Agenda / strategy (Netherlands)• Open up educational and research programmes, including funding mechanisms (Australia, Finland, Ireland, Norway and Slovenia)• Amended legal and framework conditions to allow foreign researchers and institutions to participate in research programmes and access research infrastructure funded by national sources.• Increased presence in foreign countries (Sino-Danish Centre for Education and Research, Germany‟s Max Planck Centres in seven countries and Fraunhofer Centres in six countries, and France‟s Institut Pasteur in Korea, etc.)• Measures to encourage international mobility of researchers and doctoral students abroad and return (grants, bi-national programmes, international collaboration on R&D projects, etc.)• Training and education (languages, intercultural skills, etc.) 26
27. Sluggish outlook for global and national innovation systems1. Uncertainties about depressed demand2. Limited access to finance (deleveraging and budgetary pressures) tends to restrain investments and consumption3. Entrepreneurship have not recovered yet : VC, start ups and SMEs have been hit the hardest.4. Shift in technological leadership towards emerging countries and relocation of innovation activities5. Austerity is now gaining in most countries and S&T budgets are also under pressure – but recognition of the central role of innovation for engineering a sustainable recovery.6. Foreseeable growth perspectives and the financial situation of most governments indicate that this downward pressure is likely to be maintained in the coming years. 27
28. Long-term unemployment rate has increased for all Persons unemployed a year or longer as a share of the population aged 25-64 28Source: OECD STI Outlook 2012 based on OECD (2011), OECD Employment Outlook 2011, OECD, Paris.
29. The crisis has negative long-run effects on skills• Depletion of skills due to long spells of unemployment, a lower exposure to technology, loss of tacit knowledge• Lack of firm creation to absorb unemployed workers• Reallocation of skilled workers to lower skilled jobs because of limited employment opportunities• May accelerate long-term trends towards a segmentation of production processes and short term assignments of highly skilled• => Permanent scars for innovation processesPolicies aimed at avoiding employment losses and supporting training are essential to avoid damage to innovation systems. 29
30. For more information…www.oecd.org/sti/outlook email@example.com firstname.lastname@example.org 30