5. 5
0
10
20
30
40
50
60
70
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Emissions(GtCO2)
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 efficiency
and fuelswitching (7%)
End use fuelswitching (11%)
End use electricity efficiency (12%)
End use fuelefficiency (24%)
Source: International Energy Agency, Energy Technology Perspectives 2008: Scenarios and Strategies to 2050.
...combined with huge global challenges...
6. 6
6
...and the lasting effects of the crisis.
Revised OECD projections: November 2008 vs. November 2009
11/2009
11/2008
8. 8
A “horizontal" approach
Cutting across policy areas
Trade
Tax
Investment
Information and
communications
Industry and
entrepreneurship
Science and
technology
Statistics
Public governance
Competition
9. 9
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.
12. 12
Japan
China
OECD
EU27
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1994 1996 1998 2000 2002 2004 2006 2008
%
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.
13. 13
Direct and indirect government funding of business R&D and tax incentives for R&D, 2007
As 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.
14. 14
But innovation is more than R&D
New-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
Austria
CzechRepublic
Iceland(2002-04)
Luxembourg
Ireland
Sweden
Netherlands
Estonia
Chile
Canada(2002-04,
manufacturing)
Norway
Belgium
Mexico(2006-07)
Denmark
Italy
Japan(1999-2001)
SouthAfrica(2002-
04)
Spain
Australia(2006-07)
Portugal
UnitedKingdom
Korea(2005-07,
manufacturing)
Innovative firms withoutR&D Innovative firms with in-house R&D%
15. 15
Firms collaborate with each other
Firms 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
Finland
Chile
Sweden
CzechRepublic
Netherlands
Austria
SouthAfrica(2002-
04)
Belgium
Norway
Estonia
Denmark
Luxembourg
NewZealand(2006-
07)
Iceland(2002-04)
UnitedKingdom
Ireland
Japan(1999-2001)
Canada(2002-04,
manufacturing)
China
Australia(2006-07)
Korea(2005-07,
manufacturing)
Portugal
Spain
Germany
Italy
National collaboration only International collaboration
%
18. 18
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).
19. 19
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).
20. Finding 2:
The mix of actors is changing
• Need to broaden our perspective from:
–Multinational enterprises;
–Public research organisations & universities;
–The G7.
20
22. 22
...and job creation.
0
20
40
60
80
100
120
140
160
Share of Employment Share of Net Growth
Percent
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).
23. 23
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 2008
As a percentage of total international co-authored articles
0
3
6
9
12
15
18
North America Europe Far East & Oceania
(excluding China)
China
% 1998 2008
And new players are emerging, spreading
innovative capabilities...
24. 24
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.
25. 25
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.
26. Finding 3: Innovation is already a fundamental
economic investment...
26
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
SlovakRepublic
Italy
CzechRepublic
Japan(2005)
Australia
Spain
Canada(2005)
Portugal(2005)
Austria
Sweden
France
Denmark
Germany
Finland
UnitedStates
UnitedKingdom
% Machinery and equipment Software and databases
R&D and other intellectual propertyproducts Brand equity, firm specific human capital, organisationalcapital
intangibles
27. 27
...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.
28. 28
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
29. 29
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
30. 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.
30
Editor's Notes
But not all innovation is comes directly from R&D – other type of innovative activity is important as well – design, marketing, organisational change.
Collaboration among within a country and across borders is increasingly common.
The “cloud” is another example:NYT made use of a cloud service provided by Amazon S3 (Simple Storage service) where they uploaded all articles from 1851 to 1980 – 11m, 4TB of data in 24 hours at a cost of 240$.
KNM: knowledge is non-rival – one piece of K does not prevent the simultaneous use of the same piece by another party – thu steh need for IPRs are important because ; need to protect to reward the inventor, but this needs to be balanced against to socially optimal situation where as many agents have the K as possible (“spillover”)
Need to treat like our finnacial system – better data, and better international coordination
Tapping into a global innovation network = 400+ components from over all over the worldApple did very little R&D – rather most of its effort was spent on design, marketing and software development (iTunes Music Store) and the difficult negotiations of getting the “Big 5” music labels to agree to make their music available These intangibles / intellectual assets were the key to the success of this product, allowing Apple to capture half of the sales price and 70% of the legal digital download market in just 7 years (25% of all).
