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Andrew Wyckoff, OECD Public Policy Dialogue on Innovation in Latin America Guanajuato, Mexico 1 24 March 2011

The innovation imperative Why now?

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Innovation is a driver of growth... Contributions to labour productivity growth, 1995-2006, in % %

Labour quality

Physical capital deepening

Multifactor productivity

Intangible capital deepening

7 6 5 4 3

2 1 0 -1 -2

Source: Data on intangible investment are based on COINVEST [www.coinvest.org.uk] and research papers, 2009.

3

‌ that can help address global social challenges neglected by markets...

4

4

...and offers the largest potential for catching up. Decomposition of cross-country differences in GDP per capita into their determinants, 2005 (United States = 100) GDP PPP per capita United States

TFP

Human capital

Physical capital

Employment

100.0

100.0

100.0

100.0

100.0

Canada

83.5

72.0

103.3

105.8

106.0

Japan

72.6

52.6

100.4

130.7

105.1

China

9.8

13.6

57.3

105.2

119.5

India

5.2

12.7

47.7

98.3

87.1

Brazil

20.5

29.3

70.1

103.1

96.8

Russian Federation

28.6

31.5

84.9

97.4

99.3

EU27 + EFTA

64.7

67.8

91.2

114.1

91.3

Total World

22.8

27.9

64.2

104.2

95.8

Source: OECD.

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5

What is OECD’s Innovation Strategy?

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A “horizontal�approach Cutting across policy areas Education & skills

Industry and entrepreneurship

Environment Development Tax Competition

Science and technology

Exploring innovation from a wide range of policy perspectives

Investment

Information and communications

Statistics Public governance

Trade Consumer policy

Territorial development

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What innovation encompasses has broadened.

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Innovation includes a bundle of tech & non-tech innovations ...

9 Source: IMD (2000) Innovation and Rennovation: The Nespresso Story, IMD046, 03/2003

...that require a range of different disciplines interacting. Scientific publications cited by “green� patents

Chemical Engineering

Material Science

Chemistry

Physics Legend:

14.2%

9.5%

Engineering

10.6%

17.4%

10.5%

4.9%

Green Technology

Patent-science link via citations (100% = all citations)

Energy

Scientific Papers

7.5%

4.8% 6.6% Immunology and Microbiology

Patents

Biochemistry, Genetics and Molecular Biology

3.7% Agricultural and Biological Sciences

5.7% Earth and Planetary Sciences

Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris.

Environmental Science 10

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How innovation is conducted has become more collaborative and “open�.

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There is more collaboration among scientists... Trends in co-authorship in scientific publications Thousands 300

Domestic co-authorship 250

200 Single-institution co-authorship 150 International co-authorship

100

50 Single author

2007

12 12 12

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

0

...and universities & PROs... EPO joint business and university or PROs patent applications by priority year

600

500

400 national 300

200 international 100

0 1980

13

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

...and between firms. Firms with national/international collaboration on innovation, 2004-06 As a percentage of innovative firms %

National collaboration only

International collaboration

60 50 40 30 20

Source: OECD (2010), Measuring Innovation: A New Perspective, OECD, Paris based on OECD, Innovation microdata project.

Italy

Germany

Spain

Portugal

Korea (2005-07, manufacturing)

Australia (2006-07)

China

Canada (2002-04, manufacturing)

Japan (1999-2001)

Ireland

United Kingdom

Iceland (2002-04)

New Zealand (200607)

Luxembourg

Denmark

Estonia

Norway

Belgium

South Africa (200204)

Austria

Czech Republic

Sweden

Chile

Finland

0

Netherlands

10

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Where innovation occurs has changed becoming more global.

15

Poland Poland

Sweden Sweden

Belgium Belgium

France France

RussianFederation Federation. Russian Italy Italy Netherlands Netherlands Switzerland Switzerland Germany Germany

Japan

Spain Spain

Japan Korea Korea United Kingdom United Kingdom

United United States States

Canada Canada

ChinaChina

Australia Australia

India India

Brazil Brazil16

Scientific publications and co-authored articles

The alignment of innovation has shifted.

UK

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Policy Implications for LA •

Innovation is broader than S&T – it is a system. Non-tech as a key enabler;

Better policy coherence is essential across a wide set of policies. (7)

Empower businesses: foster skills (5), provide incentives for business (3,6)

Universities as a node; glue between actors, a link globally and a magnet for global talent (4).

Diagnose, evaluate & monitor through improved measures (measurement agenda) (1,8).

Innovation-related work: what’s next?

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Current work on innovation: Handbook on Innovation Policies • A self-diagnostic tool + best practice policies  web-based platform; • Compilation of thematic work & reviews of innovation policy at the country-level; • Topics under development: – Public Research Institutes; – Financing innovation; – Clusters and regions; etc. 20

Current work on innovation: Refining & developing Indicators A measurement agenda

• Non-tech innovation; • K creation & flows

• Public sector innovation Measuring Innovation: A New Perspective (2010) proposes a new set of indicators and identifies measurement gaps. www.oecd.org/innovation/strategy/measuring

Going Forward: Possible LACII / PILAC Collaboration • Diagnosis of LAC Innovation systems

• Policy analysis of key LAC issues: – Higher Education and Public Research Institutes; – Incentives for business R&D and innovation; – Governance of innovation policies

• Identify common work on measurement. – Manuals: Frascati, Oslo, Bogota – Surveys: UIS, RICYT – Analysis: ECLAC / microdata

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Developing policies for 21st century innovation