INNOVATION and SME The OECD innovation strategy Alessandra Proto OECD LEED Trento Centre for Local Development

THE OECD INNOVATION STRATEGY 2007 OECD ministers agreed that: Innovation is crucial for competitiveness, productivity and progress of the nations. It is also fundamental element to confront with the actual global challenges such as climate change and sustainable development. OECD INNOVATION STRATEGY

THE INNOVATION IMPERATIVE The economic downturn makes it imperative to find new sources of growth. Innovation has always been an important drive of growth. Governments need to reboot their economies with a more intelligent type of growth, driven by new start-ups, by the most innovative small and medium enterprises and banks, and by the need to develop efficient renewable energies and green technologies for a low-carbon era.

NO CUTS ON INNVATION FOR THE CRISIS Innovation in many of the stimulus packages launched to offset the impact of the crisis. Increase of public investment in education, research and smart infrastructure. Now with the weight of fiscal deficits: risk of such spending being cut. Cuts may provide short-term fiscal relief but it will hurt growth in the long term. …But this is not just about spending

THE OECD INNOVATION STRATEGY 2007 OECD ministers agreed that: Innovation is crucial for competitiveness, productivity and progress of the nations. It is also fundamental element to confront with the actual global challenges such as climate change and sustainable development. OECD INNOVATION STRATEGY

THE INNOVATION IMPERATIVE The economic downturn makes it imperative to find new sources of growth. Innovation has always been an important drive of growth. Governments need to reboot their economies with a more intelligent type of growth, driven by new start-ups, by the most innovative small and medium enterprises and banks, and by the need to develop efficient renewable energies and green technologies for a low-carbon era.

NO CUTS ON INNVATION FOR THE CRISIS Innovation in many of the stimulus packages launched to offset the impact of the crisis. Increase of public investment in education, research and smart infrastructure. Now with the weight of fiscal deficits: risk of such spending being cut. Cuts may provide short-term fiscal relief but it will hurt growth in the long term. …But this is not just about spending

GOVERNMENTS’ UNDERSTANDING OF INNOVATION IS CRUCIAL The nature of innovation has changed dramatically due to: Globalisation Emergence of new players (China, India, …) Widespread diffusion of ICT Competitive pressure to engage in more open innovating methods. Collectively these changes have transformed the nature of innovation: how is it performed? Where it occurs? Who does it? What it consists of?

NEED OF RETHINKING POLICES TO NURTURE AND GUIDE INNOVATION (I) Rethink the role that UNIVERSITIES and RESEARCH ORGANISATIONS play in the economies. Considered as essential nodes in the innovation system Grant them more freedom and independence Encourage them to compete and become world class innovation catalysts.

NEED OF RETHINKING POLICES TO NURTURE AND GUIDE INNOVATION (II) INNOVATION as a SYSTEM: innovation policies should have a broader view than simply supporting science and technology Need of whole-of-government innovation strategies

NEED OF RETHINKING POLICES TO NURTURE AND GUIDE INNOVATION (III) Promote ENTREPRENEURSHIP and support the creativity of YOUNG INNOVATIVE FIRMS: Gazelles are source of radically new, “disruptive innovations” New firms tend to generate large productivity and employment gains

OECD INNOVATION STRATEGY Is one of the first, whole-of-government exercises that seeks to look at innovation not from the narrow lens of just S&T, but more broadly from a broad range of policy areas.

A “HORIZONTAL" APPROACH Trade Tax Investment Information and communications Industry and entrepreneurship Science and technology Statistics Public governance Competition

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.

New firms, SMEs and entrepreneurs are key players because they are bringing new ideas to the market. Innovation is not only S&T but also: creation of new products and services new marketing methods changes in ways of organising businesses, in their workplace organisation and external relations. New firm creation through entrepreneurship and innovations in existing SMEs play an important role. ENTREPRENEURSHIP, SME AND INNOVATION

Policies to strengthen entrepreneurship and increase the innovation capabilities of SMEs should be one of the main planks of government innovation strategies. Governments should target SMEs and entrepreneurship as a major potential source of new jobs in the recovery from recession. Public policies have a role to play in leveraging the dynamic nature of entrepreneurship, developing programmes that support SME and promoting entrepreneurship in the population at large. Such policies are often more effective when they contain an important local component (respond more closely to realities on the ground, benefitting from local competitive advantages) MAIN RECOMMENDATIONS

17 Patents per million inhabitants, Europe, average INNOVATION IS NOT “FLAT” Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on OECD REGPAT Database and OECD, Regional Database. More than 250 Between 50 and 100 Between 100 and 250 Between 0 and 50 IMPORTANT ROLE OF LOCALITIES Unique system of experiences, skills, codes, networks, shared perspectives and social capital

18 THANK YOU!