Trends and Good Practices in Innovation Policies in OECD Countries: Implications for Catching-up and Transition 3 rd National Innovation Forum Bulgarian National Innovation Policy: Opportunities for Faster Growth after EU Accession Sofia, 19 December 2006 Gernot Hutschenreiter OECD Directorate for Science, Technology and Industry

Outline Innovation – a key driver of growth and competitiveness Major trends and critical points in science, technology and innovation policy Overall assessments, OECD Innovation Policy Reviews Some emerging lessons and good practices

Innovation – a key driver of growth and competitiveness Together with sound framework conditions –including a sound macro- economic framework and international openness – innovation has become to be acknowledged as a key driver of growth and competitiveness There is evidence that  Increased investment in R&D tends to go hand in hand with stronger growth in OECD countries  Domestic R&D is important, not just in itself, but also for absorbing technologies from abroad  Public investment in R&D has positive effects on economic growth and productivity, and leverages business R&D  Increased investment in information and communication technology (ICT) leads to stronger economic growth, including in the service sector  Innovative performance depends on the intensity and quality of networks among innovators, in particular on linkages between industry and science Innovation policy has a measurable impact on innovation performance Innovation policy has moved up on the policy agenda and is becoming part of the core of economic policy making … and it is being adapted in response to new conditions and tasks

Successful countries share some characteristics Good fundamentals, including overall international openness Above average improvement in innovation performance due to:  High and sustained investment in knowledge in education, ICT and R&D  High share of business in financing / performing R&D  A diversified population of innovators, with a greater role for SMEs, thanks to favourable framework conditions, including a supportive financial system  High level of networking among innovators, including well-developed industry-science relationships  Strong regional poles of innovative activity, such as dynamic clusters  Strong policy governance of the innovation system, including an effective co-ordination between policy instruments and institutions  An innovative approach to innovation policy  Openness with respect to and good use of international knowledge flows Some countries were successful in developing a “smart innovation policies” building on and developing their potential for catchin up

Major trends and critical points in science, technology and innovation policy in OECD countries and beyond I Improving framework conditions for innovation Strategic planning for science, technology and innovation Attention to the impact of the globalisation of R&D New governance structures for innovation policy Strengthening incentives for business R&D and innovation Increasing public R&D expenditure New funding mechanisms in public research institutions

Major trends and critical points in science, technology and innovation policy in OECD countries and beyond II Renewed interest in priority setting in science and technology, balancing top-down and bottom-up elements Fostering industry-science linkages, including through public-private partnerships (P/PPs) Securing supply of human resources in science and technology Evaluation of policies, instruments and institutions – including overall assessments of science, technology and innovation policy

Renewed interest in overall policy assessments Innovation policy has moved up on the policy agenda, and has become closer to the core of economic policy making Many countries perceive a need to invest more in innovation while making their innovation policy more effective, not least under the impact of globalisation Evaluation of research institutions, innovation policy agencies, programmes, instruments etc., has received increasing attention Recently, there has been a complementary interest in overall assessments of innovation policy, based on an innovation systems perspective This interest is shared by countries of different levels of economic development and innovation performance, both inside and outside the OECD At the same time priorities and needs of countries differ strongly, depending on their specific conditions “Simple benchmarking” does not serve these needs sufficiently

OECD Reviews of Innovation Policy The Reviews – carried out under the auspices of the OECD’s Committee for Scientific and Technological Policy (CSTP) – are  tuned to specific needs of countries  Aiming at deriving concrete recommendations across the spectre of innovation-related policies  … while maintaining a common core in terms of approach and cross-cutting issues (such as the impact of globalisation, etc.) Covering OECD Members and selected non-Members, contributing to a varied portfolio of countries Completed: Switzerland, Luxembourg Ongoing I: New Zealand, South Africa, Chile Ongoing II: China (larger scale) Outlook: Continuing high demand enlarging the portfolio of countries; feedback to thematic work and economies of scope in identifying good practices

Review of China’s Innovation System and Policies A two-year project to be completed by mid 2007 at the request of and in partnership with the Chinese Ministry of Science and Technology Principle of shared responsibility and equal partnership Objectives: to assess the current status and prospective developments of China’s Innovation System, with a focus on public policies, and formulate recommendation for its strengthening and smooth insertion into the global economy Voluntary financial and/or in-kind support from a number of Member countries Four modules:  Institutions and policies  S&T indicators  Internationalisation of R&D  Human Resources in Science and Technology

Some emerging lessons and good practices I Large differences in initial conditions, but shared need of restructuring and adapting the national innovation system across a large variety of countries Creating a favourable framework  Creating conducive framework conditions fostering incentives to innovate as well as openness, policy co-ordination  Encouraging platforms for discussion and schemes to stimulate knowledge exchange, reduce lack of information and strengthen co ‑ operation among firms and between firms and research organisations Strengthening the governance of the innovation system  Aligning policies and instruments more closely to the specific needs of the innovation system  Adopting an innovative approach to developing or reforming instruments – observe good practices but no off the shelf More attention to the overall policy mix and portfolio of instruments

Some emerging lessons and good practices II Improving Industry-Science Relationships  New good practices E.g. public-private partnerships for research and innovation Balancing top-down and bottom-up approaches  Top-down approaches have their merits in certain contexts (priority setting, discrete decisions)  Bottom-up is a necessary complement to disclose information and find an optimal allocation of ressources  Public-private partnerships – as well as cluster- or network-oriented policies – are helpful in this respect

Some emerging lessons and good practices III Reactions to the increased globalisation of R&D:  Many countries (both OECD Members and non-Members) are revising their internationalisation strategies, and  The opportunities – and threats – of the globalisation of R&D depend on the particular structure of economies and national innovation system  Many countries have adopted policies to address key aspects of the globalisation of R&D such as policies towards attracting R&D activities/units from abroad policies to link domestic firms to knowledge from abroad policies towards the mobility of human resources taking measures to benefiting from the mobility of human resources for science and technology, from students to experienced researchers (brain circulation) Moving towards an integrated approach / strategy towards the globalisation of R&D – treating internationalisation not as a separate matter but as a dimension inherent to all aspects concerning the innovation system

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