| dc.description.abstract | The current wave of scientific discoveries and technical advances provides OECD countries with unparalleled opportunities for economic growth and improved social well-being. But the rapid increase in new scientific and technological knowledge only provides economic and social benefits when it is effectively exploited and leads to innovation. Innovation is a key driver of long-term economic growth, the primary basis for cornpetitiveness in world markets and part of the response to many societal challenges.While public expectations from technological innovation are evolving in line with social concerns (e .g. unemployment, sustainable development, ageing populations), the innovation process itself is undergoing profound changes. Public policies must adapt effectively to sueh changes. Governments face the task of strengthening innovation systems in order to take greater advantage of globalisation and the move to a knowledge-based economy. This report summarises the main findings of the CommiUee for Scientific and Technological Policy's (CSTP) work on national innovation systems - and related work in the context 01 the project on Technology, Productivity and lob Creation - which aimed to: i) characterise the current transformation of the innovation process; ii) identify the main country-specific and other factors that determine innovation patterns and performance: and iii) determine the implications for government policy to promote innovation. The ehanglng elirnate and eondlt lons for innovatlon In essence. innovation is the ability to manage knowledge creatively in response to market-articulated demands and other social needs. Enterprises are the maio source of ¡nnovarion; their performance depends on incentives provided by the economic and regulatory environment, their access to critical inputs (via factor markets or through interactions in networks and c1usters of knowledge-based organisations) and their internal capacity to seize market and technological opportunities. Severa) trends combine to change the conditions for successful innovation: • Innovalion inereasingly relies on effectioe inleruaion belween lhe súence base and the business seaor. In all sectors. the innovative process is increasingly characterised by feedback between the science base and the different stages of techno)ogy development and commercialisation. In fields sueh as biotechnology, scientific research is the maio source of ¡nnovation, blurring the distinction between science and technology. A greater part of the scientific research agenda is driven by problems identified during the course of technological development in the business sector. • More ompelilive markets and the acceleraling pace of scientiffc and Technological change force firms lo innooale more rapidly. Together with the expanding range of technologies which firms must manage or master, this situation is exerting pressure 00 business R&D and may be squeezing out private investment in long-rerm applied research . This is occurring in a context where budget constraints and euts in defence-related R&D have generally led to stagnation in spending on public sector research and development. There may be implications for long-term innovative capacity.• Networkino and collaboration among firms are now more important than in the past and increasingly involve knowledge-intensive services. Competition provides incentives to innovate, but networking and eollaboration at local. national and international levels are often necessary to build the capabilities to do so. Clusters of innovative firms and other private and public knowledge-based organisations are emerging as drivers of growth and employment. Two-thirds of OECD production and 70% of jobs are in services, where innovation is generally less driven by direct R&D expenditure and is more dependent on acquired technology and the quality of human resources Moreover, innovative manufacturing firms are increasingly inleracting wilh knowledge ~ intensive services.• Small and medium·sized enterrprises (SMEs), especially new technology based 'irms , {lave a more important role in Ihe development o new technologies . Small enterprises, especially new technology-based firms, playa distinctive and increasing role in innovalion systems. Beyond their direcl contribution to the creation and diffusion of new goods and services, new technology-based firms help instil a culture of innovation, encourage investment in ski lis and improve economy-wide dynamic allocative efficiency. However, the conditions for their creation and growth are still far from optimal in most countries and the innovation capacities of most SMEs are stil l limited.• The gfoba/isaliotl o ecotlomies is making countries' innovation systems more inlerdependent . Trade in technology is growing, as are international alliances among firms and cross-border purchases of patents and Iicences. Investment in foreign research facilities is also on the rise, particularly by firms based in smaller countries. In this environment. the competitiveness of firms depends more and more ontheir ability to link to international innovation networks. However, globalisation is not leading to a homogenisation of national innovation partems. Countries still differ greatly owing to differing starting points, technological and industrial specialisation , institutions, poli cies and attitudes to change.In sum, innovation performance depends not only on how specific actors (eg . enterprises, research institutes, universitiesl perform, but on how they interact with one another as elements of an innovation system, at local. national and internationallevels. A new role for governmentsFor the most part, governments address current challenges with administrative structures and policy instruments that have been shaped by responses to past problems. Traditionally, they have intervenedin the technology arena to address market failures. They should also address systemic failures that block the functioning of innovation systems, hinder the now of knowledge and technology and, consequently,reduce the overall efficiency of R&D efforts. Such systemic failures can emerge from mismatches between the different components of an innovation system, such as conflicting incentives for market andnon-market institutions (e.q . enterprises and the public research sector), or from institutional rigidities based on narrow specialisation. asymmetric information and communication gaps, and lack of networkingor mobility of personnel.Governments need ro play an integrating role in managing knowledge on an economy-wide basis by making technology and innovation policy an integral part of overall economic policy. This requires co-ordinated contributions from a variety of policies in order to:• Secure framework cond itions that are conducive to ¡nnovation, such as a stable macroeconomic environment, a supportive tax and regulatory environment, and appropriate infrastructure and education and training policies.• Remove more specific barriers to innovation in the business sector and increase synergies between public and private investment in innovation.A new agenda tor technology and innovation policy • Building un innovation culture , Overcoming the inability 01 many firms to cope with technical progress owing to inappropriate work organisation, poor management practices and underdeveloped techniques and incentives for incorporating new knowledge and technology requires strategies on the part 01 linos and governments, Govemments should also address the specilic lactors that restrainthe number 01 technology-based start-ups and reduce their growth potential.• Enhuncing /echnology diffusion , Govemments need to look carelully at the balance between support to the "high-technology" part 01 the manulacturing sector, and support aimed at lostering innovationand technology diffusion throughout the economy, They should direct their diffusion efforts across a wide range 01 linos, lrom the technologically advanced to those with lesser capabilities, lrom finos in traditional sectors to those in emerging industries, and to firms at different stages in their lile cycle and in the services sectors,• Promoting networking and e/ustering , Technology and innovation policy should not locus on single lirms in isolation but rather on their ability to interact with other enterprises and organisations, Governmentsshould reduce obstacles that prevent the lonoation 01 networks and ensure that the public research inlrastructure works in c10se collaboration with business,They can also nurture the development01 innovative c1usters through schemes to stimulate knowledge exchange, reduce inlormationlailures and strengthen co-operation among firms.• Leveraging researrh and development. In general, there is a need lor new approaches to stimulating innovation that provide greater scope and incentives to private initiative and are less dependent on direct govemment financial support, Governments should help the science system adjust to the emerging entrepreneurial model 01 knowledge generation and use, while ensuring the continued pursuit 01 curiosity-driven research , In order to increase the leverage 01 government support programmes on private sector funding, foster co-operation among actors in ¡nnovation systems, and enhance synergy between market-driven R&D and that directed to government missions (e ,g, delence, health, environment). governments should consider making greater use 01 publicl private research partnerships and should loster commercialisation 01 research through patents, Iicences and spin-oll linos,• Responding lo globa/isaüon . Policies are needed which capture the benelits associated with both inward and outward R&D investments and other global technological alliances, provided that opportunities and incentives lor mutual gain depend on sound and predictable rules 01 the game. Countries should generally build on the globalisation process through openness to international flows 01 goods, investment, people and ideas, They can increase their ability to absorb science andtechnology from around the world and make themselves attractive locations for innovation by upgrading the indigenous technology base, stimulating the growth 01 localised innovative c1usters or competence centres, and enhancing international co~operation in R&D.Although OECD countries may be lacing substantially similar challenges. national policies will alwayshave signilicantly different contexts, Policy responses are therelore to sorne degree country-specilic anddependent on historical heritage and on leatures 01 the economic and innovation systems, There are also important differences among countries in the capacities and traditions 01 their science and technologypolicy institutions, However, based on a common understanding 01 the mechanisms 01 innovation and technology diffusion in a knowledge-based economy, there is room lor improved mutual learning Irom successes and failures in addressing common objectives. | |
