Measuring Innovation: A New Perspective

Measuring Innovation A NEW PERSPECTIVE Measuring Innovation Measuring Innovation: A New Perspective presents new measu...

Author: OECD Organisation for Economic Co-operation and Development

534 downloads 1510 Views 10MB Size Report

This content was uploaded by our users and we assume good faith they have the permission to share this book. If you own the copyright to this book and it is wrongfully on our website, we offer a simple DMCA procedure to remove your content from our site. Start by pressing the button below!
Report copyright / DMCA form

DOWNLOAD PDF

Measuring Innovation A NEW PERSPECTIVE

Measuring Innovation

Measuring Innovation: A New Perspective presents new measures and new ways of looking at traditional indicators. It builds on 50 years of indicator development by OECD and goes beyond R&D to describe the broader context in which innovation occurs. It includes some experimental indicators that provide insight into new areas of policy interest. It highlights measurement gaps and proposes directions for advancing the measurement agenda.

A NEW PERSPECTIVE

This publication begins by describing innovation today. It looks at what is driving innovation in firms, and how the scientific and research landscape is being reconfigured by convergence, interdisciplinarity and the new geography of innovation hot spots. It presents broader measures of innovation, for example using new indicators of investment in intangible assets and trademarks. Human capital is the basic input of innovation, and a series of indicators looks at how well education systems are contributing to the knowledge and research bases. Further series examine how firms transform skills and knowledge, and shed light on the different roles of public and private investment in fostering innovation and reaping its rewards, with concrete examples from major global challenges such as health and climate change. Measuring Innovation is a major step towards evidence-based innovation policy making. It complements traditional “positioning”-type indicators with ones that show how innovation is, or could be, linked to policy. It also recognises that much more remains to be done, and points to the measurement challenges statisticians, researchers and policy makers alike need to address. For more information about the OECD Innovation Strategy, see www.oecd.org/innovation/strategy.


Further reading The OECD Innovation Strategy: Getting a Head Start on Tomorrow

A NEW PERSPECTIVE

The full text of this book is available on line via these links: www.sourceoecd.org/education/9789264059467 www.sourceoecd.org/environment/9789264059467 www.sourceoecd.org/scienceIT/9789264059467 www.sourceoecd.org/socialissues/9789264059467 www.sourceoecd.org/agriculture/9789264059467 Those with access to all OECD books on line should use this link: www.sourceoecd.org/9789264059467 SourceOECD is the OECD online library of books, periodicals and statistical databases. For more information about this award-winning service and free trials ask your librarian, or write to us at [email protected].

www.oecd.org/publishing

ISBN 978-92-64-05946-7 92 2010 04 1 P

-:HSTCQE=UZ^Y[\:

Measuring Innovation A New Perspective

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of 31 democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of the European Communities takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisation’s statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members.

This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries.

ISBN 978-92-64-05946-7 (print) ISBN 978-92-64-05947-4 (PDF)

Also available in French: Mesurer l’innovation : Un nouveau regard Photo credits: Cover © Veer/Fancy Photography. Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda.

© OECD 2010 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at [email protected] or the Centre français d’exploitation du droit de copie (CFC) at [email protected].

Foreword

Foreword Sound measurement of innovation is crucial for policy making. It helps policy makers to evaluate the efficiency of their policies and spending and to assess the contribution of innovation to achieving social and economic objectives, and it legitimises public intervention by enhancing public accountability. Yet, the measures of innovation currently available do not adequately take account of the full role of innovation in today’s economy. Measuring Innovation: A New Perspective selects indicators traditionally used to monitor innovation, and complements them with indicators from other domains that describe the broader context in which innovation occurs. It includes some experimental indicators that provide insight into new areas of policy interest. An important objective of the report is to highlight measurement gaps and propose action for advancing the measurement agenda. It draws mainly on OECD indicators or sources of comparable quality. Areas for which good-quality, internationally comparable indicators are not available or only very loose proxies exist are covered separately, using special “Gap pages” that point to measurement gaps that need to be filled.

The approach The OECD Innovation Strategy takes a broad, horizontal approach. It recognises that to understand the nature of innovation and its impacts and to help monitor the functioning of innovation systems, it is necessary to move beyond aggregate numbers or indices, as these do not adequately reflect the diversity and linkages of innovation actors and processes. It is also necessary to go beyond science, technology and innovation indicators to draw on measures of education, of entrepreneurship, of economic, environmental and social outcomes and of the broader conditions for innovation, including framework conditions. As a companion to The OECD Innovation Strategy: Getting a Head Start on Tomorrow, this publication presents a set of indicators that reflect the broad policy areas examined in that study. The selection of indicators builds on the assumption that: • The appropriateness of a given set of indicators depends on its use. • Indicators are not a substitute for causal relations, which are examined through complex empirical analysis, as reviewed in The OECD Innovation Strategy: Getting a Head Start on Tomorrow. • Indicators should be identified on the basis of their policy relevance, analytical soundness, statistical quality and measurability (international, over time, prospects of improvement). The aim of Measuring Innovation is threefold: • To select “positioning indicators”. These traditional indicators, with broad coverage of countries over time, can help countries to compare themselves to other countries and monitor their progress towards a desired national or supranational policy goal. • To go beyond “positioning indicators” to tell a more nuanced story. The goal is to: –– Give a more refined version of the positioning indicator, e.g. instead of using scientific publications as a proxy for research output in international comparisons, one might use “top-cited” scientific publications to “quality adjust” the indicator. –– Show how the positioning indicator is linked to a policy leverage, e.g. if PISA scores in science are used to proxy basic scientific skills, a way to increase the scores is to increase access to and use of computers by children. –– Proxy a policy mix or instrument that can be used to progress towards an outcome or target, e.g. if a country sets a target in terms of business R&D intensity (R&D/GDP), a policy mix indicator can provide a picture of the extent of direct or indirect public support to business R&D. Some of these indicators may be more experimental in nature, have less country coverage or even be first-time indicators. Some might eventually become part of the regularly produced OECD indicators repertoire. • To advance the innovation measurement agenda. The OECD has worked for 50 years on the development of science, technology and innovation indicators. Today, innovation raises measurement challenges that are either new or require urgent attention. Short boxes point to measurement challenges and gaps that need to be addressed by the broader community (policy makers, researchers and statisticians) to improve the evidence base for policy making, as well as to recent and ongoing initiatives that will provide better measures in the near future. Special pages are dedicated to gaps for which no good-quality indicator could be identified. Key actions to address these gaps are proposed in “Towards a Measurement Agenda for Innovation”. MEASURING INNOVATION: A NEW PERSPECTIVE © OECD 2010

3

Foreword

The structure Measuring Innovation is the outcome of a very ambitious project and is novel in many respects. It tries to satisfy multiple objectives and is targeted to a broad audience with varying levels of experience in the use of indicators. Its composite structure and look reflects the diversity of its aims. It is organised into three distinct parts. Towards a Measurement Agenda for Innovation This part builds on the OECD’s half-century of indicator development and the challenge presented by the broad horizontal focus of the OECD Innovation Strategy. It summarises the main weaknesses of the current international measurement framework in this respect. It presents five key areas of action which, if endorsed, could be the basis for a forward-looking, longer-term, international measurement agenda. Its target audience is policy makers who care about evidence-based policy making, the broader research community working on innovation, and the statisticians who produce the data. This part of the publication builds on the following parts but is placed at the beginning to make the discussion of a longer-term strategy for innovation measurement more visible. Innovation Today (Chapter 1) Chapter 1 sets the stage in terms of the characteristics of innovation today by focusing on trends and aggregates. It is concerned with the following questions: What inputs (beyond R&D) does innovation entail? What complementary strategies are firms undertaking? How are actors linked in the innovation system and how “collaborative” is the innovation process? What indicators can be used to see how innovation contributes to global challenges such as climate change? It presents new indicators on investment in intangible assets and on trademarks, and innovation indicators drawn from innovation surveys. Traditional indicators based on patents and scientific publications are used to develop new indicators of science or innovation “hot spots” in certain technologies or locations. This part depends on indicators and short bullets to tell a story to policy makers about innovation today. Beyond Positioning Indicators (Chapters 2, 3, 4, 5, 6) This part is composed of thematic chapters that draw on traditional indicators and propose experimental ones to reflect the priorities for government action of the OECD Innovation Strategy. No attempt is made to choose a set of indicators for benchmarking purposes. On the contrary, the idea is to present traditional “positioning” indicators that have been, and can be, used to show where countries stand on a particular issue, and, on a facing page, to present more sophisticated or experimental indicators that go beyond simple “pointers”. Ideally, these either complement the positioning indicators or point to potentially superior substitutes. The target audience of the thematic chapters is the policy analyst who has a certain level of sophistication in the use of indicators as well as all those who are engaged in producing indicators for policy making. The five thematic chapters are: 1. Empowering People, 2. Unleashing Innovation in Firms, 3. Investing in Innovation, 4. Reaping the Returns from Innovation, and 5. Innovation for Global Challenges. These chapters also contain a few “Gap pages” that make a case for the development of new indicators in areas that lack high quality, internationally comparable indicators. The “Gap pages” discuss user needs, highlight the measurement challenges and propose a way forward. For example, owing to the lack of appropriate indicators, there is no chapter for the Governance of Innovation. Instead, a “Gap page” has been developed. The thematic chapters are organised as double pages where the right- and left-hand pages are intended to complement each other. The left-hand page contains: • A few lines (at the top) to show why it is relevant to monitor the “positioning” indicator in the context of an innovation strategy; • One “positioning” indicator; • A “Did you know?” frame that provides additional information from the source; • A few paragraphs describing the use of the positioning indicator and the indicators on the right-hand page; and • A small “Definitions” box used in the double page, for those who are not familiar with these particular indicators. The elements of the right-hand page are: • One or two figures that go beyond positioning indicators. While they provide a fresh perspective on a particular facet of innovation and frequently provide a better link to policies, these indicators suffer from less country coverage, and are frequently experimental in nature (first-time indicators) that have not benefited from the experience and refinement associated with the “positioning” (left-hand side) indicators; and • A “Measurability” box that summarises the measurement challenges, gaps and recent initiatives.

4

MEASURING INNOVATION: A NEW PERSPECTIVE © OECD 2010

Foreword

All charts and underlying data can be downloaded via the 1 2 in the page (hyperlink to a web page).

Acknowledgments Measuring Innovation is an experimental effort, which draws on contributions from many individuals inside and outside the OECD Secretariat. The development of experimental indicators based on microdata relied on researchers’ willingness to devote a considerable amount of their free time to this project. Groups such as the OECD Working Party on Science and Technology Indicators (NESTI) have been on the front line contributing data, valuable comments and ideas for the measurement agenda. The work was coordinated by Alessandra Colecchia and Pierre Therrien of the Directorate for Science,Technology and Industry, Sandrine Kergroach and Elif Köksal-Oudot provided excellent research assistance, Brigitte van Beuzekom turned this product into a beautiful publication and Beatrice Jeffries provided secretarial support. Many made available their respective areas of expertise: Laudeline Auriol (human resources in S&T), Frédéric Bourassa and Vincenzo Spiezia (ICT), Agnès Cimper and Julien Dupont (productivity), Chiara Criscuolo (intangible assets), Hélène Dernis and Dominique Guellec (patents), Corinne Heckmann and Stéphan Vincent-Lancrin (education), Nick Johnstone and Ivan Hascic (environment), Guillaume Kpodar (R&D), Vladimir Lopez-Bassols (innovation), Maria Rosa Lunati and Karen Wilson (entrepreneurship), Karen Maguire, Mauro Migotto and Claire Nauwelaers (regions), Valentine Millot (trademarks), Elettra Ronchi (innovation in health) and Hiroyuki Tomizawa (bibliometrics). Andrew Wyckoff, Fred Gault and members of the Innovation Strategy team and Expert Advisory Group, the NESTI Advisory Board, as well as the Committee for Scientific and Technological Policy (CSTP) and the Committee on Industry, Innovation and Enterpreneurship (CIIE) offered guidance and commented on the draft. Without the help and dedication of all, this collaborative effort would not have been possible. We hope to continue to build on this experiment and on this wider community to implement the longer-term measurement agenda.


5

Table of contents

Table of Contents Foreword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Acronyms, Country Groupings and Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Towards a Measurement Agenda for Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Chapter 1 Innovation today. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Sources of growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 New sources of growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Innovation beyond R&D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Protection of innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Trademarks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Mixed modes of innovation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Collaboration in innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Mapping hot research areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Multidisciplinary and interdisciplinary research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 New players in research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Scientific collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Clusters of knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Innovation hotspots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Science for environmental innovation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Technological innovation for climate change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Transfers of environmental technologies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Chapter 2 EMPOWERING PEOPLE to innovate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 • Basic scientific skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 • Tertiary education. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 • Doctorate holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4 • Skills mismatch. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5 • International mobility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 • Entrepreneurial talent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7 • Gap page – Innovative workplace and skills for innovation . . . . . . . . . . . . . . . . . . . . . . . . 2.8 • Consumers’ demand for innovation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43 44 46 48 50 52 54 56 58

Chapter 3 Unleashing innovation in firms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 • Entry and exit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 • Mobilising private funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 • Policy environment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 • Young and innovative firms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

63 64 66 68 70

Chapter 4 Investing in innovation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 • Firms investing in R&D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 • Firms investing in innovation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 • Government funding R&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 • Higher education and basic research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 • Information and communication technologies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6 • Firms and smart infrastructure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7 • Governments and smart infrastructure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8 • Gap page – Measuring innovation in the public sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9 • Gap page – Multilevel governance of innovation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75 76 78 80 82 84 86 88 90 92


7

Table of contents

Chapter 5 Reaping returns from innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 5.1 • Scientific collaboration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 5.2 • Science and industry linkages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 5.3 • Knowledge clusters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 5.4 • Commercialisation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 5.5 • Knowledge circulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Chapter 6 Addressing global challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 6.1 • Health. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 6.2 • Climate change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 6.3 • Other environmental challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 List of Figures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Data sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

This book has...

StatLinks 2 ®

A service that delivers Excel ﬁles from the printed page! Look for the StatLinks at the bottom left-hand corner of the tables or graphs in this book. To download the matching Excel® spreadsheet, just type the link into your Internet browser, starting with the http://dx.doi.org prefix. If you’re reading the PDF e-book edition, and your PC is connected to the Internet, simply click on the link. You’ll find StatLinks appearing in more OECD books.

8


Acronyms, Country Groupings and Abbreviations

Acronyms, Country Groupings and Abbreviations Acronyms 3G BERD CIS DSL EPO EU GBAORD GDP HIV/AIDS ICT IP ISCED ISCO JPO LAN LMDS MMDS PCT PRO R&D RD&D S&T SME SNA PPP USD USPTO Wi-Fi WiMAX

Third generation of mobile communications technology Business enterprise expenditure on research and development Community Innovation Survey Digital Subscriber Line European Patent Office European Union Government budget appropriations or outlays for R&D Gross domestic product Human immunodeficiency virus (HIV); Acquired immunodeficiency syndrome (AIDS) Information and communication technology Intellectual property International Standard Classification of Education International Standard Classification of Occupations Japan Patent Office Local area network Local multipoint distribution system Multichannel multipoint distribution service Patent Co-operation Treaty Public research organisation Research and development Research, development and demonstration Science and technology Small and medium-sized enterprise System of National Accounts Purchasing power parity United States dollar United States Patent and Trademark Office Wireless fidelity Wireless interoperability for microwave access

Country Groupings BRIC countries BRIIC countries EU19 EU27

G20

Brazil, the Russian Federation, India and People’s Republic of China (China) Brazil, the Russian Federation, India, Indonesia and China Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Poland, Portugal, the Slovak Republic, Spain, Sweden and the United Kingdom Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, the Slovak Republic, Slovenia, Spain, Sweden and the United Kingdom Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, the Russian Federation, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union

Abbreviations AU Australia FR France

CA Canada GB United Kingdom

CN China JP Japan


DE KR

Germany Korea

DK Denmark NL Netherlands

ES US

Spain United States

9

Towards a Measurement Agenda for Innovation Towards a Measurement Agenda for Innovation builds on the OECD’s half-century of indicator development and the challenge presented by the broad horizontal focus of the OECD Innovation Strategy. It identifies five broad areas in which international action is needed: develop innovation metrics that can be linked to aggregate measures of economic performance; invest in a highquality and comprehensive statistical infrastructure to analyse innovation at the firm-level; promote metrics of innovation in the public sector and for public policy evaluation; find new and interdisciplinary approaches to capture knowledge creation and flows; promote the measurement of innovation for social goals and of social impacts of innovation. These five key areas of action, if endorsed, would be the basis for a forward-looking, longer-term, international measurement agenda for innovation. The development and implementation of such an agenda imply a relatively long time frame. It calls for the efforts of the statistical community but also the engagement of policy makers to define user needs and of researchers to use the data, analyse impacts and feed into the development of appropriate metrics and data infrastructures. It also requires the engagement of organisations, businesses, universities and the public sector, because the statistical system can only collect what it is feasible to measure inside organisations.


11

• a Measurement Agenda for Innovation Measuring innovation: looking ahead Measuring Innovation presents new measures and new ways of looking at traditional indicators. It builds on the OECD’s half-century of indicator development to try to reflect adequately the diversity of innovation actors and processes and the linkages among them. It moves forward the Blue Sky measurement agenda on science, technology and innovation indicators (see Box 1) and draws on measures of education, entrepreneurship, economic, environmental and social outcomes, and the framework conditions that support or inhibit innovation. Its goal is to mirror the broad, horizontal focus of the OECD Innovation Strategy. This is a challenge. For example, does basic education play a role in shaping the skills of future innovators? If so, how do we measure how well it does so? What measures can we use to capture the range of skills innovators need? Can we in fact define such skills? How does innovation relate to entrepreneurship and how do we define this? Entrepreneurship is already difficult to measure, but not all entrepreneurial activity consists of launching new ideas on the market, it might also include, for example, opening a new outlet or deciding to become a freelance writer. Innovation is clearly part of a business strategy based on turning ideas into value. It generally means improved goods, services or processes. It sustains growth. Yet other forms of innovation respond to broader challenges. For example, encouraging interdisciplinary research, often viewed as a source of major breakthroughs, implies developing networks of researchers across disciplines and countries. What are the returns to innovation when different actors in different places create new knowledge? Who appropriates the returns? How can we measure the transmission mechanisms of new knowledge and their impacts on economic development? Finally, while innovation drives and sustains growth and helps tackle global challenges, it also affects society. What does a sustained rate of innovation imply for demand for labour and skills? What is its effect on the workplace, on communities and social habits? In sum, the current measurement framework, with its focus on the role of innovation in economic performance, falls short in terms of measuring the social impacts of innovation. This raises hard questions and calls for a rethinking of what constitutes an appropriate framework for measuring innovation. In the shorter term, the challenge is to render statistical systems more flexible and responsive to the introduction of new and fast-evolving concepts. Ways of doing this include experimenting with satellite accounts, exploiting the potential of existing microdata, adding questions to existing surveys, adding topic-specific modules to main survey vehicles every n years or developing short turnaround surveys to meet special needs. Experimental and flexible approaches can progress at different speeds according to countries’ specific priorities and resources. This will require co-ordination to prevent geographically fragmented research efforts over the long term and ensure that the results of successful experimentation in a limited number of countries are taken up by the international community. In the longer term, the challenge for the statistical community is to redesign surveys to address the relevant unit of innovation analysis. Should data be collected at the level of research laboratories to address questions about basic research? Is the enterprise group a more relevant unit of analysis than the enterprise when looking at innovation activity? Should innovation surveys use the establishment as the unit to look at the diffusion of new process technologies? Another challenge is to restructure data collection to maximise data-linking opportunities for research and the analysis of impacts. This also means finding ways of providing researchers with access to microdata while respecting confidentiality requirements. The development and implementation of such an agenda imply a relatively long time frame. It calls for the efforts of the statistical community but also the engagement of policy makers to define user needs and of researchers to use the data, analyse impacts and feed into the development of appropriate metrics and data infrastructures. It also requires the engagement of organisations, businesses, universities and the public sector, because the statistical system can only collect what it is feasible to measure inside organisations.

Box 1 • Key messages from the OECD Blue Sky Forum 1. Research on innovation in the broad sense is currently fragmented. There is need for a general framework of analysis and greater coordination of research efforts. The goal is to understand the entire story of innovation, from inputs to economic and social impacts. 2. Indicator and related econometric research must move forward from innovation inputs and activities to include the outputs and impacts of innovation. 3. New methods of analysis are necessary to understand innovation processes, which will require improved data access, data linkages and the adoption of interdisciplinary approaches to data. 4. A marked improvement in the policy relevance of innovation research is required in order to create a science of science policy. Source: OECD (2007), Science, Technology and Innovation Indicators in a Changing World. Responding to Policy Needs, OECD, Paris.

12


a Measurement Agenda for Innovation • The work undertaken as part of the OECD Innovation Strategy has engaged the international community and has helped to move the measurement agenda forward. Measuring Innovation presents some “experimental” indicators and highlights some of the gaps in the current measurement framework, as well as some of the initiatives under way to address such gaps. A number of recommendations have emerged from this work and are presented below. In addition, Box 2 provides a summary of the key actions needed to take the measurement agenda forward.

Broader innovation matters for growth The increasing recognition of innovation as a driver of economic growth and structural change has drawn greater attention to its nature, role and determinants. Innovation entails investment aimed at producing new knowledge. It is the result of a range of complementary intangible assets – not only R&D but also software, human capital and new organisational structures. In itself, innovation is not an objective. It needs to be placed in the broader context of its contribution to aggregate economic performance. The ability to explain productivity differences is what drives and informs policies designed by ministers of finance or of the economy.

Action 1 Improve the measurement of broader innovation and its link to macroeconomic performance Science, technology and innovation (STI) surveys need to be redesigned to take a broader view of innovation. Survey and administrative data need to be aligned with aggregate economic measures and become a visible part of the System of National Accounts (SNA). The goal is to help recognise the important role of STI policies in promoting economic growth. The business, statistical and research communities are encouraged to work to: • Measure and value intangible assets; • Revisit the measurement framework for innovation to identify and prioritise areas for survey design and re-design; and • Align survey and administrative data with economic aggregates to enable productivity analysis.

Going beyond targets and aggregates: understanding why and how innovation happens in firms Targeting levels of spending on certain dimensions of innovation activity, such as R&D, has been a widely used policy tool in recent years. Spending on R&D is well measured, but it is important to know how to reach the target and what that target means in terms of innovation outcomes and impacts. R&D surveys can provide information about some of the inputs to innovation but give little information on the outputs of these processes. They tend to be more useful for measuring technology-based activities, which are only a subset of what is included in the broader concept of innovation, and they are often more relevant for manufacturing than for services. Similarly, patent data are useful for understanding certain innovation-related strategies, but they cannot measure the full extent of innovative activities and suffer from some well-known limitations. “Innovation surveys” were therefore developed to increase knowledge about innovation in firms with a view to developing effective innovation policies. They collect information about types of innovation, reasons for innovating (or not), collaboration and linkages among firms or public research organisations, and flows of knowledge, as well as quantitative data on sales from product innovations and spending on a range of assets beyond R&D. However, knowing, for example, that 60% of a country’s firms have introduced some type of innovation does not help to understand why and how innovation happened, what its impacts are on the economy and how it can be encouraged. Indicators should not simply provide a level and Measuring Innovation explores the potential of firm-level data tell a story about how that level was achieved. Using microdata from innovation surveys, it shows that firms introduce new products on the market without necessarily performing R&D. It shows that firms adopt complementary strategies. Terms such as “technological” or “non-technological” innovation or “open” innovation are simplifications and potentially misleading. Most innovative firms introduce both product and process innovations and also marketing or organisational innovations. They are part of the broader conditions and infrastructure of their national innovation system, which are often provided by government agencies. This is true of firms in both manufacturing and services. New empirical analysis based on these data and presented in The OECD Innovation Strategy : Getting a Head Start on Tomorrow, shows how different “modes” (complementary strategies) of innovation are positively correlated with economic performance. Chapter 1 presents the use of some of these indicators to highlight the nature of innovation today. MEASURING INNOVATION: A NEW PERSPECTIVE © OECD 2010

13

• a Measurement Agenda for Innovation

Action 2 Invest in a high-quality and comprehensive data infrastructure to measure the determinants and impacts of innovation Sound evidence-based policy advice calls for a comprehensive, high-quality data infrastructure, including at the sub-national level. Its backbone is a reliable business register. It is important to be able to link different data sets and exploit the potential of administrative records. This can improve understanding and reduce respondent burden. For example, the ability to link innovation survey data to business practice surveys, ICT surveys or administrative databases on firm-level capital investment, earnings, value added and employment can substantially improve empirical research on the impacts of innovation. This can also reduce respondent burden if questions do not have to be repeated in the innovation survey. However, there is no point to a first-class data infrastructure if it is not available to the research community. It is researchers who formulate relevant research questions and analyse the data. Of course, this requires measures to ensure data confidentiality in order to protect respondents and to avoid any real or perceived conflict of interest on the part of researchers. Governments and the statistical and the research communities are encouraged to focus on: • Improving business registers; • Exploring the statistical potential of administrative records; • Establishing a data infrastructure which exploits linkages across data sets and over time; • Improving the data infrastructure at the sub-national level; and • Improving the research community’s access to this infrastructure while ensuring data confidentiality.

Going beyond traditional actors: addressing the role of government in innovation Governments, including central and local government and various agencies, provide services to people and to businesses. They also define the boundaries within which innovation takes place through regulation of domestic activity and trade, and they play a major role in fostering innovation. Yet while universities and firms are covered by conventional indicators, current measures do not fully take account of the roles of individuals, consumers and government in the innovation process. There are several compelling reasons for developing metrics and definitions for innovation in the public sector and measures of policy efforts to foster innovation. There is a need to account for the use of public funds for innovation, improve learning outcomes and the quality of the provision of education or other public services.

Action 3 Recognise the role of innovation in the public sector and promote its measurement Internationally agreed concepts and comparable metrics for studying innovation in the public sector do not yet exist. A framework for the measurement of public-sector innovation that is analogous to, but appropriately different from, the one used for business innovation (OECD/Eurostat [2005], Oslo Manual) would provide a basis for a more innovative approach to public activities and services and allow for comparisons and benchmarking. Because the concept of “public sector” encompasses very different organisational units (e.g. the public administration, the health sector, the education sector), it may be necessary to develop new concepts, such as innovation in education, and different metrics to encompass the public welfare aspects of innovation. Governments and the statistical and research communities are encouraged to develop a measurement framework for innovation in the public sector that: • Examines the extent to which concepts and metrics used in the context of business innovation can be used and adapted; • Considers whether basic concepts and tools are relevant in light of the specificities of the public sector, in particular its complexity and heterogeneity, and its organisational and incentive structures; and • Recognises that the public sector has multiple objectives, including innovation for social goals, which may require radically new thinking about what innovation is and how it takes place in that context. Evaluation – typically of institutions, programmes and instruments, but recently more comprehensively of the overall “policy mix” or (public funding) “systems” – is essential to improve STI governance and to enhance the effectiveness and efficiency of innovation policies. New metrics are needed to support innovation policy making. Chapter 4 presents some “experimental” indicators on the mix of direct and indirect public support to R&D, as well as measures of public funding “modes” (e.g. institutional versus project funding). Work is needed to improve the international comparability of these indicators and to develop metrics for broader innovation (beyond R&D).

14


a Measurement Agenda for Innovation • The policy, research and statistical communities are encouraged to: • Promote the development of indicators that capture the nature, direction and intensity of policy actions for innovation at national and regional levels. This will make it possible to study the linkages between them and innovation performance and the relevance of policies in different innovation system contexts.

Capturing knowledge interactions Workplaces can provide a fertile environment for interactions leading to innovation if effective management can ensure that the talents of individuals are being tapped. New measures are needed of the skills required and of ways in which the workplace promotes and makes use of such skills. The production of new knowledge is often a collective process involving a significant number of individuals and organisations which requires communication and co-ordination. Knowledge produced in such a complex but structured way may have public good aspects. Such interactions or “networks” may be usefully tracked as part of the innovation measurement framework. Networks can be a means for “collective intelligence”, and policies that seek to influence the rate and orientation of innovation have to take networks into account. For instance, technology transfer between universities and industries implies two-way communication. The mobility of the highly skilled implies knowledge flows across disciplines, sectors and borders. A “clever” and linked use of bibliometric, patent and other administrative data can help reveal how these multidisciplinary, transnational networks are evolving. However, while science and innovation activities increasingly rely on dispersed networks of actors, they sometimes tend to cluster in certain places or around certain institutions (e.g. a leading university or a research laboratory of a multinational corporation). To analyse the changing landscape of science, technology and innovation is likely to require new units of analysis with different geographical scope. Finally, rapidly developing enabling technologies such as information and communication technologies (ICT), biotechnologies, and nanotechnologies draw on interdisciplinary research and tend to be “general purpose technologies” that can be used across a broad range of industries. A consistent measurement framework across technologies would make it possible to compare their impacts.

Action 4 Promote the design of new statistical methods and interdisciplinary approaches to data collection The design of innovation policy should take into account the characteristics of technologies, people and locations, as well as the linkages and flows among them. New methods of analysis are needed to understand innovative behaviour, its determinants and its impacts at the level of the individual, the firm and the organisation. The statistical and research communities should consider: • Developing interdisciplinary approaches to data collection and new units of data collection; • Improving the measurement of innovative activity in complex business structures, organisations and networks; • Promoting the measurement of the skills required in innovative workplaces; and • Promoting joint measurement of emerging and enabling technologies.

Going beyond economic goals: innovation for social goals and social impacts of innovation Innovation may be part of a policy framework that addresses societal issues that go beyond day-to-day business innovation. This may require a concept of “policy-driven” innovation which can also respond to social challenges or address social needs. Some innovations that generate income for firms may, of course, reduce environmental impacts and improve social well-being. However, the current measurement framework focuses on the role of innovation in economic performance and has limited capacity to measure innovations that help address social goals, such as those associated with an ageing population or climate change. Moreover, the current framework does not cover the social impacts of innovation. For example, to analyse the effects of policies that “foster innovative workplaces”, it is necessary to measure both the adoption of innovative practices by companies and the impact of these practices on workers. It would be possible to do so, for example, through linked employer-employee surveys.

Action 5 Promote the measurement of innovation for social goals and of social impacts of innovation It is important to promote the development of concepts and measures of innovation that reveal their impact on well-being or their contributions to achieving social goals. MEASURING INNOVATION: A NEW PERSPECTIVE © OECD 2010

15

• a Measurement Agenda for Innovation The statistical and research communities are encouraged to work towards: • Developing concepts and measures of innovations that address social needs; and • Devising measurement tools that bridge the economic and social impacts of innovation activities.

Box 2 • A measurement agenda for innovation: Key actions

1. Improve the measurement of broader innovation and its link to macroeconomic performance Science, technology and innovation surveys need to be redesigned to take a broader view of innovation and improved measurements are needed to link science, technology and innovation policies to economic growth. Key actions: • Measure and value intangible assets; • Revisit the measurement framework for innovation to identify and prioritise areas for survey design and re-design; and • Align survey and administrative data with economic aggregates.

2. Invest in a high-quality and comprehensive data infrastructure to measure the determinants and impacts of innovation Sound policy advice needs to rely on a high-quality and comprehensive data infrastructure, including at the sub-national level. The backbone of such infrastructure is a high quality business register. The ability to link different data sets and exploit the potential of administrative records will improve understanding and reduce respondent burden. Key actions: • Improve business registers; • Exploit the statistical potential of administrative records; • Improve the data infrastructure at the sub-national level; and • Establish a data infrastructure which combines data linkages with good researcher access to the data, while protecting business and individual confidentiality.

3. Recognise the role of innovation in the public sector and promote its measurement There is a need to account for the use of public funds, measure the efficiency of producing and delivering public policies and services, and improve learning outcomes and the quality of the provision of public services via innovation. Key actions: • Develop a measurement framework for innovation in the public sector for the delivery of public services, health and education; and • Devise indicators that capture the nature, direction and intensity of public support for innovation, at national and sub-national levels.

4. Promote the design of new statistical methods and interdisciplinary approaches to data collection Design of policies for innovation needs to take into account the characteristics of technologies, people and locations, as well as the linkages and flows among them. New methods of analysis that are interdisciplinary in nature are necessary to understand innovative behaviour, its determinants and its impacts at the level of the individual, the firm and the organisation. Key actions: • Develop interdisciplinary approaches to data collection and new units of data collection; • Improve the measurement of innovative activity in complex business structures, organisations and networks; • Promote the measurement of the skills required in innovative workplaces; and • Promote the joint measurement of emerging and enabling technologies.

5. Promote the measurement of innovation for social goals and of social impacts of innovation The current measurement framework fails to measure the social impacts of innovation. The development of measures that provide an assessment of the impacts of innovation on well-being, or their contributions to achieving social goals, needs to be promoted. Key actions: • Develop measures of innovation that address social needs; and • Devise measurement tools that bridge the economic and social impacts of innovation activities.

16


References – a Measurement Agenda for Innovation •

References OECD (2007), Science, Technology and Innovation Indicators in a Changing World. Responding to Policy Needs, a selection of papers presented at the OECD Blue Sky II Forum in September 2006, OECD, Paris. OECD (2010), The OECD Innovation Strategy: Getting a Head Start on Tomorrow, OECD, Paris. OECD and Eurostat (2005), Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data, 3rd edition, OECD, Paris.


17

Chapter 1 Innovation today This chapter sets the stage for an examination of the characteristics of innovation today by focusing on trends and aggregates. It is concerned with the following questions: What inputs (beyond R&D) does innovation entail? What complementary strategies are firms undertaking? How are actors linked in the innovation system and how “collaborative” is the innovation process? What indicators can be used to see how innovation contributes to global challenges such as climate change? It presents new indicators on investment in intangible assets and on trademarks and new indicators drawn from innovation surveys. Traditional indicators based on patents and scientific publications are used to develop new indicators of science or innovation “hot spots” in certain technologies or locations. Indicators and the accompanying text tell policy makers a story about innovation today.

Sources of growth.......................................................................................... 20 New sources of growth................................................................................. 21 Intangible assets........................................................................................... 22 Innovation beyond R&D............................................................................... 23 Protection of innovation............................................................................... 24 Trademarks.................................................................................................... 25 Mixed modes of innovation.......................................................................... 26 Collaboration in innovation......................................................................... 27 Mapping hot research areas......................................................................... 28 Multidisciplinary and interdisciplinary research...................................... 29 New players in research............................................................................... 30 Scientific collaboration................................................................................. 31 Clusters of knowledge.................................................................................. 32 Innovation hotspots...................................................................................... 35 Science for environmental innovation....................................................... 36 Technological innovation for climate change............................................ 37 Transfers of environmental technologies................................................... 38


19

1 • INNOVATION TODAY – Sources of growth THE INNOVATION IMPERATIVE: finding new sources of growth Today’s world faces extraordinary challenges. In particular, effects of the economic downturn will be felt for years to come. The measure used to gauge welfare is GDP per capita, and changes in welfare can result from changes in labour productivity (GDP per hours worked) and labour utilisation (hours worked per person employed). Slowing labour productivity was already eroding growth performance prior to the crisis (2007-08), which has made it even more imperative for countries to find new and sustainable sources of growth.

Decomposition of growth in GDP per capita, 2001-08 Total economy, percentage change at annual rate 2001-07 Growth in GDP per capita =

2007-08

Growth in labour productivity +

Growth in labour utilisation

Estonia Russian Federation Slovak Republic Turkey Czech Republic Poland Slovenia Korea Hungary Greece Chile Ireland Luxembourg Iceland Finland Sweden New Zealand United Kingdom Australia Mexico OECD Austria EU27 Japan Spain Norway Israel Canada United States Belgium Netherlands Denmark Switzerland Germany France Portugal Italy -5

-3

-1

1

3

5

7

9 %

-5

-3

-1

1

3

5

7

9 %

-5

-3

-1

1

3

5

7

9 %

Source: OECD, Productivity Database, November 2009; www.oecd.org/statistics/productivity and for EU27; EUROSTAT, National Accounts Database, March 2010. See chapter notes. 1 2 http://dx.doi.org/10.1787/834500164468

20


New sources of growth – INNOVATION TODAY • 1 NEW SOURCES OF GROWTH: the contribution of intangible assets A new stream of research argues that firms’ spending on new knowledge, i.e. investment in intangible assets, contributes to their output growth not only at the time of investment but also in later years. Estimates of the contribution of intangible assets to labour productivity growth show that, in some countries, they explain a good portion of multifactor productivity growth (a measure of technological change and the inability to fully measure the sources of economic performance).

Labour productivity growth: adding the contribution of intangible assets, 1995-2006 Labour quality

Physical capital deepening

Multifactor productivity

Intangible capital deepening

% 7 6 5 Conventional growth accounting

4

Adding intangibles

3 2 1 0 -1

ly

Ita

a in

Sp

y an

rm

nc

e

Ge

00 20

pa

n(

Fra

-0

5)

ark nm

ia

str Au

De Ja

Fin l

an

d(

20

dS

00 -

tat

05

)

es

3)

ite Un

Au

str

ali

a(

ite

19

dK

95

-2

ing

00

do

m

ce ee Gr Un

Slo

va

kR (2 epu 00 bl 0- ic 06 ) Cz ec hR ep ub Sw li c ed en (1 99 520 04 )

-2

Note: These estimates are based on national studies. They do not yet reflect standardised methods and definitions. How to read this figure What happens when investment in intangible assets is added to the breakdown of labour productivity growth? The contribution of physical capital (machines and information and communication technologies – ICT) declines because investment in software becomes part of investment in intangible assets. Multifactor productivity (MFP) is related to more efficient use of labour and capital inputs, for example through improvements in the management of production processes, organisational change or more generally, R&D and innovation. MFP declines as investment in R&D and in other intangible assets related to innovation is accounted for as a distinct source of growth, “intangible capital deepening”. Although the comparability of these estimates is still poor, owing to differences in data sources, methodologies and assumptions on deflators and depreciation rates, they are a first step in recognising the importance of investment in intangible assets for growth. Source: OECD, based on research papers, 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/834524666054


21

1 • INNOVATION TODAY – Intangible assets INVESTING IN INTANGIBLE ASSETS Innovation results from a range of complementary assets that go beyond R&D, such as software, human capital and new organisational structures. Investment in these intangible assets is rising and overtaking investment in physical capital (machinery and equipment) in Finland, Sweden, the United Kingdom and the United States.

Investment in fixed and intangible assets as a share of GDP, 2006 Machinery and equipment Software and databases R&D and other intellectual property products Brand equity, firm specific human capital, organisational capital % 30 25 20 15 10 5

do

m

es

ing dK

Un

ite

dS

tat

d

Un

ite

Fin lan

y an

rm Ge

ark nm

De

e

nc Fra

en

ed Sw

ia

str

20

l( ga

Au

) 05

5) rtu

Po

Ca

na

da

(2

Sp

00

a in

a

ali str Au

n( pa

Ja

ep hR

20

ub

05

)

li c

ly

Ita ec Cz

Slo

va

kR

ep

ub

li c

0

Note: These estimates are based on national studies. They do not yet reflect standardised methods and definitions. What is included in intangible assets? Using as their basis a seminal paper by C. Corrado, Hulten and Sichel (2006), researchers in 14 countries have computed aggregates for intangible investment. Software and databases provide a measure of computerised information. Scientific R&D, mineral exploration, copyright and licence costs, and other product development, design and research are a measure of innovative property. Brand equity, firm-specific human capital and organisational capital are taken as a measure of economic competencies. Some of these intangibles – software and, more recently, R&D – are now recognised by the international statistical community as capital assets and will be accounted for in the System of National Accounts (see the OECD Handbook on Deriving Capital Measures of Intellectual Property Products, 2010). More work is needed to harmonise the definition of intangible assets and collect data on an internationally comparable basis so as to better identify and measure new sources of growth. Source: OECD, data on intangible investment are based on COINVEST, www.coinvest.org.uk, and national estimates by researchers. Data for fixed investment are OECD calculations based on EU KLEMS Database and OECD, Annual National Accounts Database, March 2010. See chapter notes. 1 2 http://dx.doi.org/10.1787/834532612432

22


Innovation beyond R&D – INNOVATION TODAY • 1 BROADER INNOVATION (BEYOND R&D) Firms may introduce new products on the market without engaging in R&D. New indicators reveal that in Australia and Norway the propensity to introduce a new-to-market product innovation is similar whether or not the firm performs R&D.

New-to-market product innovators, 2004-06 As a percentage of innovative firms by R&D status Innovative firms without R&D

% 70

Innovative firms with in-house R&D

60 50 40 30 20 10

g)

do

rin

m

l ga

07

,m

an

ufa

ctu

ing

Un

ite

dK

-0

rtu

7)

Po

5-

4)

a in

06

Sp

20

a( ali

s tr Au

ric Af

uth

(2

00

So

Ja

pa

n(

19

a(

99

20

-2

02

00

-0

1)

ly

Ita

ark

7)

-0

nm De

um Me

xic

o(

20

06

lgi

ay

Be

rw

g)

an ,m

04 2-

00

rea

Ko

Ca

na

da

(2

No

rin

il e Ch

ufa

c tu

ia

s

ton

nd

Es

r la

d

en Ne

the

ed Sw

lan

rg ou

mb

Ire

4)

-0 Lu

xe

02

ub

20

d( lan

Ice

Cz

ec

hR

ep

Au

str

ia

li c

0

How to read this figure A large share of firms develop their process, product, organisational or marketing innovations without carrying out any R&D. This holds true even for new-to-market innovators who successfully introduce innovations regarded as “technological”. In Luxembourg 52% of non-R&D performers introduced new-to-market innovations as compared to 63% of in-house R&D performers. How comparable are innovation surveys? Innovation surveys are increasingly used to better understand the role of innovation in firms’ performance, its determinants and the characteristics of innovative firms. Since 1992, the Oslo Manual (OECD and Eurostat, 2005) has provided a harmonised framework – with coherent concepts and tools – for undertaking comparable large-scale surveys of this type. Although cross-country comparability of innovation surveys based on the Oslo Manual is generally good and improving, certain differences may affect comparisons between CIS (Community Innovation Survey) and non-CIS countries, such as sectoral coverage (e.g. Canada and Korea conduct separate surveys for manufacturing and services), size thresholds, sampling methods and the unit of analysis. Another difference is the length of the reference period (i.e. firms are asked about their innovation activities over a defined period in the past) which varies between two (e.g. Australia, New Zealand) and three years (e.g. CIS countries, China, Japan). For the OECD Innovation microdata project, countries prepared these indicators using common definitions and statistical routines to ensure a high degree of comparability. As a result, there may in some cases be small discrepancies between the figures given here and the published national data. Not all countries run an innovation survey or participated in the OECD Innovation microdata project. For instance the United States does not have an innovation survey, hence it does not appear in the figure above or in other figures which make use of innovation survey data. Source: OECD, Innovation microdata project based on CIS-2006, June 2009 and national data sources. See chapter notes. 1 2 http://dx.doi.org/10.1787/834560317112


23

1 • INNOVATION TODAY – Protection of innovation INNOVATION EVERYWHERE New indicators based on trademarks point to a wealth of incremental and marketing innovations in addition to technological innovations. Countries with strong manufacturers or a specialisation in information and communication technology tend to turn to patents rather than trademarks. Countries with a large services sector tend to engage more in trademark protection. Catching-up countries have a lower propensity to innovate or to seek protection (patent or trademark) for their innovations than OECD countries. Patents and trademarks per capita, 2005-07 Average number per million population, OECD and G20 countries Cross-border trademarks per capita (log)

500

Luxembourg Iceland

100

Portugal 10 Argentina Turkey Mexico

Czech Republic

United Kingdom United Netherlands States Norway Austria Sweden Ireland New Zealand Germany France Australia Finland EU27 Italy OECD Canada Spain Belgium Japan Korea World total Hungary

Slovak Republic

Poland

Brazil

Saudi Arabia

1

South Africa

Greece

Switzerland

Denmark

Russian Federation China

BRIICS Indonesia India 0

0

1

10

100

500

Triadic patent families per capita (log)

What is a triadic patent? Triadic patent families are defined as those patents applied for at the European Patent Office (EPO), the Japan Patent Office (JPO) and the US Patent and Trademark Office (USPTO) to protect a same invention. Triadic patents are typically of higher value and eliminate biases arising from home advantage and the influence of geographical location. What is a cross-border trademark? Trademark counts are also subject to home bias, as firms tend to file trademarks first in their home country. Cross-border trademarks are here defined as applications at the USPTO except for the United States and countries with a high propensity to file trademarks in the United States (Australia, Canada, Israel, Mexico and New Zealand). For these countries, counts are based on the relative share of their filings at the JPO and the European Office for Harmonization in the Internal Market (OHIM). This method is used to obtain information on trademarks commercialised abroad, hence the name “cross-border trademarks”. Why use trademarks as indicators of innovation? A trademark is a sign that distinguishes the goods and services of one undertaking from those of other undertakings. Firms use trademarks to launch new products on the market in order to signal novelty, promote their brand and appropriate the benefits of their innovations. It has been shown that the number of trademark applications is highly correlated with other innovation indicators. As their perimeter of application is very broad, they convey information not only on product innovations, but also on marketing innovations and innovations in the services sector. An advantage of using trademarks as an innovation indicator is that data on trademark applications are publicly available immediately after the filing. Trademark-based indicators can thus provide up-to-date information on the level of innovative activity. See chapter notes for more information. Source: OECD, Patent Database, January 2010; USPTO Trademark BIB ACE Database (Cassis), June 2008; OHIM and JPO annual reports 2005-08; World Intellectual Property Organization (WIPO) Trademark Statistics, January 2010. See chapter notes. 1 2 http://dx.doi.org/10.1787/834561767368

24


Trademarks – INNOVATION TODAY • 1 INNOVATION IN SERVICES IS RISING The average share of trademark applications relating to service classes has increased over the last decade from 38% to 52%. Service-related trademarks, 2008 As a percentage of total trademark filings 1998 % 70 60 50 40 30 20 10 Cz ec hR S ep Slo aud ubli va i Ar c k R ab e p ia Sin ubl ga ic po Fi n r e la Un No nd ite rwa d L S y Un uxem tate s ite d K bou ing rg do Au m str ia Ru In ss ian Hu dia n F e ga de ry rat C a io n n Po ada rtu ga Ne Tur l the key rla n Ire ds De land nm Ge ark rm Be any lgi um OE CD EU 2 S 7 Au pain str a Gr lia ee c F Sw ran e itz ce erl an Br d Sw azil Ar ede ge n nti n Isr a a N e Me el w xic So Zeal o uth an Af d ric Ko a r BR ea IIC S It Ice aly Ho la ng nd Ko n Ja g p Po an lan C d Ind hin on a es ia

0

Source: OECD, based on USPTO Trademark BIB (Cassis) April 2009; OHIM Community Trademark Database, CTM Download, December 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/834583000800

TRADEMARKS ARE A GOOD PREDICTOR OF ECONOMIC DOWNTURNS The most recent data show that trademark activity has been strongly affected by the economic crisis, with a marked drop in filing from mid-2007. The decline is apparent in both services and goods, although the crisis has affected services more severely and innovation activity in the finance and insurance sectors more particularly.

Comparing cycles: United States gross domestic product and trademark applications at the USPTO, 1999-2010 By type of trademark, long-term trend = 1.0 United States GDP

Good trademarks

Service trademarks

Finance, insurance and real estate trademarks

Trademarks

1.70

United States GDP

1999

1.60

2000

2001

2002

2003

2004

2005

2006

2007

2008

1.09

2009

1.08 1.06

1.40

1.05

1.30

1.04

1.20

1.03

1.10

1.01

1.00

1.00

0.90

0.99

0.80

0.98

0.70

0.96 10

20

Ja

nu

ary Ap ril J Oc ul y tob Ja er nu ary Ap ril J Oc ul y to Ja ber nu ary Ap ril J Oc ul y tob Ja er nu ary Ap ril J Oc ul y to Ja ber nu ary Ap ril J Oc ul y to Ja ber nu ary Ap ril J Oc ul y tob Ja er nu ary Ap ril J Oc ul y to Ja ber nu ary Ap ril J Oc ul y tob Ja er nu ary Ap ril J Oc ul y to Ja ber nu ary Ap ril J Oc ul y to Ja ber nu ary Ap ril Ju Ja l nu Octo y a r y ber

1.50

Source: OECD, based on USPTO, Trademark Electronic Search System, April 2009, OHIM Community Trademark Database, CTM Download, December 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/834638130787


25

1 • INNOVATION TODAY – Mixed modes of innovation INSIDE FIRMS: MIXED MODES OF INNOVATION Firm-level innovation data reveal complementary strategies. Terms such as “technological” or “non-technological” innovation are simplifications and to some extent misleading. Most innovative firms introduce both product and process innovations, as well as marketing or organisational innovations. This is true for firms in both manufacturing and services. There are, of course, differences by sector or firm size. For instance, a larger share of firms in services than in manufacturing introduce only marketing or organisational innovation. Complementary innovation strategies in manufacturing, 2004-06 As a percentage of all manufacturing firms Product or process innovation only Marketing or organisational & Product or process innovation Marketing or organisational innovation only % 80 60 40 20

07

)

il e (2

00

5-

Ch

ay rw

Ko

Cz

rea

ec

Ne

hR

No

ep

Sp

ub

a in

li c

ly

Ita

s rla

nd

d

the

4)

-0 02

20

Fin lan

l ga

rtu

d(

lan

Au

Ice

s tr

Un

ali

ite

a(

20

Po

06

nm

-0

7)

ark

d

lan

De

Ire

do

ing

00

dK

-2 99 19

n(

So

uth

Ja

pa

m

1)

ia

str

ia

Au

ton

um

Es

rg

Be

lgi

ou mb

Af

ric

Lu

a(

xe

20

Ge

02

rm

-0

an

4)

y

0

Source: OECD, Innovation microdata project based on CIS-2006, June 2009 and national data sources. See chapter notes. 1 2 http://dx.doi.org/10.1787/834713118114

Complementary innovation strategies in services, 2004-06 As a percentage of all services firms Product or process innovation only Marketing or organisational & Product or process innovation Marketing or organisational innovation only % 80 60 40 20

il e Ch

ay rw

No

rla

nd

s

li c ub

the Ne

Cz

ec

hR

ep

d

d

a in

Sp

lan Ire

Fin lan

ly

Ita

ark nm

06 20

a( ali

s tr Au

De

7)

-0

um lgi Be

1) 00

99 19

n(

Ja

pa

d(

20

-2

02

-0

4)

ia ton

do

ing dK

Es

lan

Ice

m

l ga

rtu Po

ite Un

ia

str Au

4)

-0

So

uth

Af

ric

a(

20

02

ou mb

xe Lu

Ge

rm

an

rg

y

0


26


Collaboration in innovation – INNOVATION TODAY • 1 INSIDE FIRMS: COLLABORATION IS ESSENTIAL New firm-level analysis reveals that firms that collaborate on innovation spend more on innovation than those that do not. This suggests that collaboration is likely to be undertaken to extend the scope of a project or to complement firms’ competencies more than to save on costs. In most countries collaboration with foreign partners is as least as important as domestic co-operation. Collaboration is used in innovation processes whether firms perform a lot of R&D, a little R&D or no R&D at all. In this respect, policies that stimulate collaboration and network initiatives will have an impact on the entire spectrum of innovative firms.

Firms with national/international collaboration on innovation, 2004-06 As a percentage of innovative firms National collaboration only

International collaboration

% 60 40 20

y

ly Ita

an

Ge

rm

Sp

ga

a in

l

g)

an

ufa

Po

rtu

7)

-0

ctu

rin

ina

06

00

5-

07

s tr Au

2-

(2

00

rea

(2 da

Ko

na

Ca

How to read this figure

,m

ali

an

a(

ufa

20

ctu

Ch

rin

g)

1)

d

00

lan

-2 99

n( Ja

04

pa

Un

w Ne

So

,m

ite

19

dK

ing

Ir e

do

m

4)

)

-0

07 lan

d(

20

02

600

(2

ala Ze

Af uth

Ice

nd

Lu

xe

mb

ou

rg

ark

ia

nm

ton

Es

De

ay

um

rw

No

lgi

ric

Ne

a(

20

Be

02

-0

4)

ia

s

Au

str

nd

li c

r la

ub

the

en

Cz

ec

hR

ep

ed Sw

Ch

Fin lan

d

il e

0

The share of innovative firms that engage in collaboration ranges from 57% in Finland to 12% in Italy. In Finland 24% of innovative firms engage in collaboration only with domestic partners, and about 33% also collaborate with foreign partners. China and Korea have the smallest share of innovative firms collaborating with foreign partners. Source: OECD, Innovation microdata project based on CIS-2006, June 2009 and national data sources. See chapter notes. 1 2 http://dx.doi.org/10.1787/834841687576

Collaboration on innovation, 2004-06 As a percentage of innovative firms by R&D status Collaboration/High R&D

% 80

Collaboration/Low R&D

Collaboration/without R&D

60 40 20

ain Sp

7)

-0

a(

20

06

rin ctu

ali s tr

Au

,m 04 200 (2 Ca

na

da

(2 rea Ko

g)

ia

Au

uf a

an

ufa an

,m 07

500

So


str

ly

Ita

ctu

mb

xe Lu

ri n

ou

g)

rg

d

lan

do

ing

Ire

m

l ga

dK

Un

ite

Po

20

a(

ric

uth

Af

rtu

4)

02

-2 99

19 n( pa Ja

-0

00

1)

ay rw No

the

r la

nd

s

li c Ne

Cz

ec

hR

ep

ub

um lgi Be

en

ed Sw

ark nm

De

Ice

lan

d(

20

02

-0

4)

ia ton

Es

Ch

il e

0

In Chile, 74% of innovative firms in the top 25% of R&D performers (firms with the highest ratio of R&D spending/sales) have some form of collaboration, 60% of the other R&D performers collaborate, and 35% of innovative firms that do not perform any R&D still engage in collaboration. Source: OECD, Innovation microdata project based on CIS-2006, June 2009 and national data sources. See chapter notes. 1 2 http://dx.doi.org/10.1787/835005824478


27

1 • INNOVATION TODAY – Mapping hot research areas CONVERGENCE OF SCIENTIFIC FIELDS Increasingly, innovations are achieved through the convergence of scientific fields and technologies. The interaction of research disciplines may also lead to new research areas. For example, “nanoscience” research has arisen from the interaction of physics and chemistry and is interdisciplinary in character. “Nanoscience” is also somewhat attracted to the life sciences, both directly and indirectly, as measured by co-citation links. While interactions between nanoscience and life sciences are not yet strong enough to establish a research domain, the space between them may become the ground for a new area, e.g. bio-nanoscience.

Hot research areas on a science map, 2008 Research on heart and blood vessels

2

Research on infectious diseases and immunology

1

6

7 10

9

8

3 13

12

36

47 42

49 48

33

43

44

46

18 19

4

41

37 39

Cancer research

Plant science research

30 28

56

31

24

0

25 26

27

Research on regenerative medicine Nanosciences

Post -genome research 60

52 54 53 55 57

16

29

58

59

71

66 86 88 89 87 90 111

109

67

Condensed matter physics

74

68 72 75 69 73

85 91

83

82

81

84

76

63

65

61

70

64

62

110

79

80 92

98 102

118 117

99

97

96

101

116

77

78

94 95

93

Chemistry 112

115

Brain research

22 23

17

14

108

113

21

32

35

51 50

34

38

40

114

60 or more 20

15

11 45

Core papers

Study of obesity

5

100

103

105

Environment Particle physics and cosmology

104

107 106

Note: The yellow dots indicate the location of hot research areas. The numbers next to the yellow dots are the hot research areas’ ID numbers. Gradations on the map correspond to the density of core papers. Warm colours represent greater concentrations of core papers, with colours becoming cooler as the density of core papers decreases. What is a hot research area? Knowledge creation and flows in cutting-edge research are transmitted through the exchange of information among researchers. Citation of scientific papers is one source of knowledge flows. Analysis of citations and the identification of core papers – those that play a central role in research areas – make it possible to examine research areas and the relations among them. Research areas are identified here via a two-stage clustering of the top 1% of highly cited research papers by using “co-citation” analysis. Co-citation involves a set of papers that is cited simultaneously in other papers. “Hot” research areas are characterised by a high level of citation activity. Source: Saka, A., M. Igami and T. Kuwahara (2010), based on tabulations from Thomson Reuters’ “Essential Science Indicators”.

28


Multidisciplinary and interdisciplinary research – INNOVATION TODAY • 1 MULTIDISCIPLINARY AND INTERDISCIPLINARY RESEARCH Science maps are helpful for distinguishing multidisciplinary research, e.g. environmental research, from interdisciplinary research, e.g. nanoscience. In the figure, research areas related to nanoscience stake out a clear domain between chemical synthesis and physics, while research areas related to the environment are spread out. Interdisciplinary research that relies on shared knowledge is created when fields such as physics and chemistry interact. Nanoscience typifies this phenomenon. In multidisciplinary research, various disciplines address scientific and social challenges independently rather than in collaboration and thus share research goals. Environmental research is of this type.

Locations of inter/multidisciplinary research areas on the science map, 2008 Chemistry

Clinical medicine & Psychiatry/psychology

Materials science Physics & Space sciences

3 4

Engineering Environment/ecology & Geosciences

22

14

Clinical medicine & Psychiatry/psychology

16

Basic biology

33

44 49

Computer science and mathematics

18

32

2

47

48

41

29 28

40

26

27

Materials science

Engineering

51

50

Basic biology

Other fields 31

52

Chemistry

53 58

59

70 63 71

61 69

Environment

74

Nanosciences

75

91

Physics & Space sciences

90

99

77

Environment/ecology & Geosciences

107

Note: Locations in which at least 60% of core papers in a given field are found have the colour corresponding to that field. Locations in which less than 60% of a given field’s core papers are found are considered inter/multidisciplinary and do not carry a field colour. The yellow dots represent the locations of inter/multidisciplinary research areas. How to read the science map The science map can be regarded as a two-dimensional aerial map showing the accumulation of core papers and the formation of mountains of science. The unit of visualisation is research areas. Hot research areas are mountains that exceed a certain elevation. Research areas with a high degree of co-citation are located close together. For the science map, 647 research areas were obtained by clustering research papers. Because it would be difficult to show all 647 research areas, only hot research areas are shown. Source: Saka, A., M. Igami and T. Kuwahara (2010), based on tabulations from Thomson Reuters’ “Essential Science Indicators”.


29

1 • INNOVATION TODAY – New players in research NEW PLAYERS ON THE RESEARCH LANDSCAPE New players are emerging on the research landscape and collaboration is intensifying. Scientific articles and co-authorship, 1998 and 2008 Numbers based on whole counts

Poland

Sweden

1998 Belgium France

Russian Federation

Italy

Netherlands Switzerland

Spain

Germany Japan Korea

United Kingdom

Canada

United States China

Australia Brazil India 1 2 http://dx.doi.org/10.1787/835008513184

Poland

Sweden

2008 Belgium France

Russian Federation

Italy


Spain

Germany Korea

Japan United Kingdom

Canada

United States China

Australia Brazil India

How to read this figure The size of the bubbles reflects the number of scientific publications and the thickness of the link indicates the intensity of collaboration, i.e. co-authorship. Source: OECD calculations, based on Scopus Custom Data, Elsevier, December 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/835027386353

30


Scientific collaboration – INNOVATION TODAY • 1 INCREASING COLLABORATION IN SCIENCES Production of scientific knowledge is shifting from individuals to groups, from single to multiple institutions, and from national to international. Researchers increasingly network across national and organisational borders. Europe’s collaboration in the European research area increases, while the rest of the world reaches out to the BRIC (Brazil, Russian Federation, India and China) countries.

Trends in co-operation on scientific articles, 1985-2007 Thousands

Domestic co-authorship

300 250

Single-institution co-authorship

200 International co-authorship

150 100

Single author

50

07 20

05 20

20 03

01 20

99 19

97 19

95 19

93 19

91 19

89 19

87 19

19

85

0

Source: OECD (2009), OECD Science, Technology and Industry Scoreboard 2009; based on Science Citation Index on CD-ROM (1981-2007) provided by Thomson Scientific and analysed by the National Institute of Science and Technology Policy in Japan. See chapter notes. 1 2 http://dx.doi.org/10.1787/835113070805

Scientific collaboration with BRIC countries, 1998 and 2008 As a percentage of total international co-authored articles 1998

2008

% 18 15 12 9 6 3 0

North America

Europe

Far East & Oceania (excluding China)

Brazil

Russian Federation

India

China

Source: OECD calculations, based on Scopus Custom Data, Elsevier, December 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/835142331125


31

1 • INNOVATION TODAY – Clusters of knowledge CLUSTERS OF KNOWLEDGE Drivers of economic change, particularly globalisation and technological advances, are not necessarily “flattening” the world economy. While firms can access factors of production from anywhere, local knowledge is still relevant. In the United States, most patent applications come from just a few regions: California contributed more than 22% of patents originating in the United States. In Japan, the Southern-Kanto region accounted for nearly 49% of patent filings.

Patents per million inhabitants, Europe, average 2005-07 PCT filings, TL3 regions

More than 250 Between 100 and 250 Between 50 and 100 Between 0 and 50

Note: Counts are based on patent applications filed under the Patent Co-operation Treaty (PCT), at international phase, by priority date and inventor’s region of residence, using fractional counts. The regional breakdown is provided at Territorial Level 3 (TL3). What are TL3 regions? The OECD has classified regions within each member country. The classification is based on two territorial levels. The higher level (Territorial Level 2 – TL2) consists of 335 large regions; the lower level (Territorial Level 3 – TL3) is composed of 1 681 small regions. All regions are defined within national borders and in most cases correspond to administrative regions. Each TL3 region is contained within a TL2 region (except in Germany and the United States). This classification – which, for European countries, is largely consistent with the Eurostat classification – facilitates comparability between regions at the same territorial level. Source: REGPAT Database, January 2010; OECD, Regional Database, July 2009.

32


Clusters of knowledge – INNOVATION TODAY • 1 Patents per million inhabitants, North America, average 2005-07 PCT filings, TL3 regions


Source: OECD, REGPAT Database, January 2010; OECD, Regional Database, July 2009.

Patents per million inhabitants, Japan and Korea, average 2005-07 PCT filings, TL3 regions




33

1 • INNOVATION TODAY – Clusters of knowledge Patents per million inhabitants, Australia and New Zealand, average 2005-07 PCT filings, TL3 regions



34


Innovation hotspots – INNOVATION TODAY • 1 REGIONAL INNOVATION HOT SPOTS Many of the leading firms in knowledge-intensive industries, such as information and communication technology and life sciences, have emerged in a limited number of regions. Such regions appear to provide more conducive environments for business innovation. Policy makers in other regions seek to replicate or nurture the positive environmental conditions offered by the best-performing regions. Innovation hot spots in renewable energy, 2005-07 Patents of the world's top 20 patenting regions as a percentage of the country's renewable energy patents Regions' share in country's renewable energy patents

Country share in renewable energy patents

Ca lifo rn So ia (U ut h S) ern -K an to ( JP ) Ba ye rn (D Mi E) dtj Ba yll de an nd( W DK ue rtt ) em be rg Ca (D p it E) al Re gio n( KR ) No To rd ka rh i (J ein P) -W Sh es en t zh fal en en -G (D E) ua ng d Ne on w g( So CN uth ) W ale Ma s( AU ss ac ) hu se tt s (U S) On tar io (C A) Na va rra (E S) Ne w Yo rk (U S) Jia ng su (C Sy N) dd an ma rk (D K) Sh iko ku ( JP ) Be ijin g( Rh CN on ) e-A lpe s( FR So ) uth Ea st (G B)

% 35 30 25 20 15 10 5 0

Source: OECD, REGPAT Database, January 2010. See chapter notes. 1 2 http://dx.doi.org/10.1787/835177142766

Innovation hot spots in biotechnologies and nanotechnologies, 2005-07 Top 26 patenting regions as a percentage of the country’s biotechnology and nanotechnology patents Share of region in country's biotechnology patents (log, %)

100

Hovedstaden (DK) Capital Region (KR) Ontario (CA) Ile de France (FR) SouthernKanto (JP)

West-Nederland (NL) Bayern (DE) California (US)

Zuid-Nederland (NL) Chungcheong Region (KR) Rhône-Alpes (FR) Nordrhein-Westfalen (DE)

Tokai (JP) Baden-Wuerttemberg (DE)

10

Maryland (US) Pennsylvania (US) New Jersey (US) Washington (US) 1

Massachusetts (US) Hessen (DE) New York (US) Texas (US)

Illinois (US)

North Carolina (US)

Minnesota (US) Michigan (US)

0

0

1

10

100 Share of region in country’s nanotechnology patents (log, %)



35

1 • INNOVATION TODAY – Science for environmental innovation SCIENCE FOR “GREEN” INNOVATION What are the links between innovation and the science base? A new indicator uses co-citation analysis and matches environmental patents and scientific publications. It shows that “green” innovations (patents) draw on a broad base of scientific knowledge.

The innovation-science link in “green” technologies, 2000-07

Chemical engineering

Material science

Chemistry

9.5%

Engineering

14.2%

Physics

17.4%

10.5%

Green technology

10.6%

4.9%

Energy Legend Patents

4.8% Immunology and Microbiology

6.6%

3.7%

5.7%

7.5%

Biochemistry, Genetics and Molecular biology

Agricultural and Biological sciences

Earth and Planetary sciences

Environmental science

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

How to read this figure Environmental technologies draw on scientific knowledge from material science (17.4%), chemistry (14.2%), physics (10.5%), etc. The co-citation links in the figure do not sum to 100% because a residual category “other fields” is not shown. What is a “green” technology? The list of environmental patent applications was generated through a new search algorithm developed by the OECD and the European Patent Office (EPO). Fields covered include: renewable energy; fuel cells and energy storage; alternative-fuelled vehicles; energy efficiency in the electricity, manufacturing and building sectors; and “clean” coal (including carbon capture and storage). What is a patent-science link? Analysis of the link between patents and scientific literature is based on the “non-patent literature” (NPL) listed as relevant references in patent documents. The NPL was matched with the scientific literature database (Scopus) which makes it possible to determine whether or not the NPL is a scientific article and to obtain bibliographical information unrecorded in the NPL. Source: OECD calculations, based on Scopus Custom Data, Elsevier, July 2009; OECD, Patent Database, January 2010; and EPO, Worldwide Patent Statistical Database, September 2009. 1 2 http://dx.doi.org/10.1787/835220245863

36


Technological innovation for climate change – INNOVATION TODAY • 1 THE CLIMATE CHALLENGE Despite limited progress in Copenhagen, investment in technological innovation for climate change mitigation is likely to increase as many OECD countries implement binding national policies. However, reaching agreement on emission cuts at the international level would certainly provide a significant spur to innovation.

Trends in technological innovation for climate change mitigation, 1978-2006 “Claimed priorities” (patent counts) in climate mitigation technologies worldwide (three-year moving average, indexed on 1997 = 1.0, Annex I signatories)

Integrated gasification combined cycle

Solar thermal

CO2 capture

Geothermal

Hydro/Marine

Solar photovoltaic

Biofuels

Wind

% 5.5

All technology fields

Kyoto Protocol

5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5

06 2

20 04

02 20

00 20

19 98

96 19

19 94

19 92

19 90

88 19

86 19

84 19

82 19

19 80

19

78

0

0

Source: OECD calculations based on EPO, Worldwide Patent Statistical Database, September 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/835221250728


37

1 • INNOVATION TODAY – Transfers of environmental technologies TECHNOLOGY TRANSFERS FOR THE ENVIRONMENT Innovation mostly occurs in OECD countries, but some transfer to developing countries will be needed to address environmental problems.

Transfer of wind (top) and solar photovoltaic (bottom) technologies, 1990-2007 Transfers from Annex I to non-Annex I signatories, measured using duplicate patent applications

How to read this figure The figures present data on the extent of transfer (measured in terms of duplicate patent applications) from Annex I to non-Annex I signatories of Kyoto Protocol for two key technologies – wind power and solar photovoltaics. The direction and thickness of the arrows reflect the relation between the country in which a patent application was first filed and subsequent duplicate filings in other countries. Patenting is costly in terms of the preparation of the application and the administrative costs and fees associated with the approval procedure. As such, inventors are unlikely to apply for patent protection in a second (or “duplicate”) country unless they are relatively certain of the potential market for the technology in that country. On this basis it is possible to see how widely innovations are diffused in the global economy and learn which countries are the sources and recipients of such innovations. See www.oecd.org/environment/innovation. Source: OECD (forthcoming), The Invention and Transfer of Environmental Technologies, OECD, Paris.

38


Notes – Innovation Today • 1

Notes Cyprus The following note is included at the request of Turkey: “The information in this document with reference to « Cyprus » relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognizes the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Turkey shall preserve its position concerning the « Cyprus issue »”. The following note is included at the request of all the European Union Member States of the OECD and the European Commission: “The Republic of Cyprus is recognized by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus”. Israel “The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.” “It should be noted that statistical data on Israeli patents and trademarks are supplied by the patent and trademark offices of the relevant countries.”

Decomposition of growth in GDP per capita, 2001-08 • Based on GDP in USD, constant prices, converted using 2000 PPPs. Labour productivity growth: adding the contribution of intangible assets, 1995-2006 • Estimates refer to the total economy for Canada and Japan; the market sector for Australia, France, Germany, Italy, Spain, Sweden and the United Kingdom; the non-financial business sector for Finland; and the non-farm business sector for the United States. • Japanese estimates do not take account of the contribution of labour quality. • Data for the United States from Corrado, C., D. Sichel and C. Hulten (2009), data for Sweden from Edquist H. (2009); data for Japan from Fukao K., T. Miyagawa, K. Mukai, Y. Shinoda and K. Tonogi (2009); data for Australia from Barnes P. and A. Mc Clure (2009); data for the United Kingdom from Marrano G. M, J.E. Haskel and G. Wallis (2009); data for Austria, the Czech Republic, Denmark, France, Germany, Greece, Italy, Spain and the Slovak Republic from Van Ark B. , J. X. Hao, C. Corrado and C. Hulten (2009). Investment in fixed and intangible assets as a share of GDP, 2006 • Estimates refer to the total economy for Canada and Japan; the market sector for Australia, France, Germany, Italy, Spain, Sweden and the United Kingdom; the non-financial business sector for Finland; and the non-farm business sector for the United States. • Data on intangible assets for the United States provided by C. Corrado; data for Japan provided by T. Miyagawa; data for Sweden provided by H. Edquist; data for Germany, Italy, Spain and the United Kingdom provided by J. Haskel, A. Pesole and members of the COINVEST project; data for Austria, Denmark and the Czech Republic provided by J. Hao and B. van Ark; data on intangible and tangible investment for Australia provided by P. Barnes; for Canada by N. Belhocine. Data on tangible investment for France are based on INSEE data. For other countries figures for tangible investment are OECD calculations based on EU KLEMS Database and OECD, Annual National Accounts Database. New-to-market product innovators, 2004-06 • For Spain, R&D activity refers to 2006 only. • The industries included are: Mining and quarrying; Manufacturing; Electricity, gas and water; Wholesale trade; Transport and storage; Communications; Financial intermediation; Computer and related activities; Architectural and engineering activities; and Technical testing and analysis. • For Australia (2006-07), Business Characteristics Survey 2006-07; Canada (2002-04, manufacturing), Survey of Innovation 2005; Iceland (2002-04), CIS-4; Japan (1999-2001), J-NIS 2003; Korea (2005-07, manufacturing), Korean Innovation Survey 2008; Mexico (2006-07), Research and Technological Development Survey 2008; New Zealand (2006-07), Business Operations Survey 2007; South Africa (2002-04), South African Innovation Survey 2005. Source: OECD, Working Party of National Experts in Science and Technology (NESTI) Innovation microdata project based on CIS-2006, June 2009 and national data sources. Patents and trademarks per capita, 2005-07 • Triadic patent families refer to patents filed at the European Patent Office (EPO), the US Patent and Trademark Office (USPTO) and the Japan Patent Office (JPO) that protect the same invention. Counts are presented according to the priority date and the residence of the inventors. • Cross-border trademark counts correspond to the number of applications filed at USPTO except for Australia, Canada, Mexico, New Zealand and the United States. For these countries counts are based on the Office for Harmonization in the Internal Market (OHIM), German PTO and JPO distributions.


39

1 • Innovation Today – Notes Service-related trademarks, 2008 • Service-related trademarks correspond to the applications designating at least one service class. • The country is the country of the applicant’s address. • The shares of services correspond to the applications at USPTO, except for the United States for which applications at OHIM are used. • Trademarks are registered at the national level in patent and trademark offices. It is also possible to register a Community trademark valid throughout the European Community at OHIM. Trademarks are registered for one or several classes of products, the fees increasing with the number of classes designated. The International Classification of Goods and Services for the purposes of registration of marks contains 34 good and 11 service classes. Trademarks can cover only goods, only services, or a combination of the two. Comparing cycles: United States gross domestic product and trademark applications at the USPTO, 1999-2010 • Good (respectively service) trademarks represent trademark applications designating only goods (respectively service) classes; finance, insurance and real estate trademarks represent trademark applications designating class 036 of the International Classification of Goods and Services. • The United States’ GDP is based on the series of seasonally adjusted GDP, expenditure approach, in volume (chained volume estimates) contained in the OECD Quarterly National Accounts dataset. • Raw GDP and trademark applications series were treated using the OECD’s Composite Leading Indicators methodology. Monthly data were used for trademark applications and quarterly data for GDP, converted to a monthly frequency via linear interpolation and aligned with the mid-quarter month. This treatment removes seasonal patterns and trends (using the Hodrick-Prescott filter) in order to extract the cyclical pattern. The cyclical pattern presented on the graph is expressed as a percentage deviation from long-term trends. Considering the filters applied, the remaining cycles are those with a period of between 18 months and 10 years. The analysis was performed on series from January 1990 to March 2010 for trademark applications and to December 2009 for GDP. For more information on the methodology, see OECD (2008), OECD System of Composite Leading Indicators, OECD, Paris, www.oecd.org/dataoecd/26/39/41629509.pdf. • Trademark series are pro-cyclical, and trademark cycles generally precede GDP cycles (from 1990, five out of seven GDP peaks and troughs were reflected in trademark series, with a mean lead of around six months for service trademarks and eight months for goods trademarks). Trademarks, especially service trademarks, tend to be more significantly affected by the cycle than GDP. • There is an additional peak for the trademark series which does not correspond to the economic activity around 2004. It corresponds to the accession of the United States to the Madrid Agreement in November 2003, which facilitated the filing procedure for foreign applications. Complementary innovation strategies in manufacturing, 2004-06 • For Australia (2006-07), Business Characteristics Survey 2006-07; Canada (2002-04, manufacturing), Survey of Innovation 2005; Iceland (2002-04), CIS-4; Japan (1999-2001), J-NIS 2003; Korea (2005-07, manufacturing), Korean Innovation Survey 2008; New Zealand (2006-07), Business Operations Survey 2007; South Africa (2002-04), South African Innovation Survey 2005. Source: OECD, Working Party of National Experts in Science and Technology (NESTI) Innovation microdata project based on CIS-2006, June 2009 and national data sources. Complementary innovation strategies in services, 2004-06 • The industries included are: Wholesale trade; Transport and storage; Communications; Financial intermediation; Computer and related activities; Architectural and engineering activities; and Technical testing and analysis. • For Australia (2006-07), Business Characteristics Survey 2006-07; Iceland (2002-04), CIS-4; Japan (1999-2001), J-NIS 2003; New Zealand (2006-07), Business Operations Survey 2007; South Africa (2002-04), South African Innovation Survey 2005. Source: OECD, Working Party of National Experts in Science and Technology (NESTI) Innovation microdata project based on CIS-2006, June 2009 and national data sources. Firms with national/international collaboration on innovation, 2004-06 • The industries included are: Mining and quarrying; Manufacturing; Electricity, gas and water; Wholesale trade; Transport and storage; Communications; Financial intermediation; Computer and related activities; Architectural and engineering activities; and Technical testing and analysis. • For Australia (2006-07), Business Characteristics Survey 2006-07; Canada (2002-04, manufacturing), Survey of Innovation 2005; Iceland (2002-04), CIS-4; Japan (1999-2001), J-NIS 2003; Korea (2005-07, manufacturing), Korean Innovation Survey 2008; New Zealand (2006-07), Business Operations Survey 2007; South Africa (2002-04), South African Innovation Survey 2005. Source: OECD, Working Party of National Experts in Science and Technology (NESTI) Innovation microdata project based on CIS-2006, June 2009 and national data sources. Collaboration on innovation, 2004-06 • For Spain, R&D activity refers to the year 2006 only. • The industries included are: Mining and quarrying; Manufacturing; Electricity, gas and water; Wholesale trade; Transport and storage; Communications; Financial intermediation; Computer and related activities; Architectural and engineering activities; and Technical testing and analysis. • For Australia (2006-07), Business Characteristics Survey 2006-07; Canada (2002-04, manufacturing), Survey of Innovation 2005; Iceland (2002-04), CIS-4; Japan (1999-2001), J-NIS 2003; Korea (2005-07, manufacturing), Korean Innovation Survey 2008; New Zealand (2006-07), Business Operations Survey 2007; South Africa (2002-04), South African Innovation Survey 2005. Source: OECD, Working Party of National Experts in Science and Technology (NESTI) Innovation microdata project based on CIS-2006, June 2009 and national data sources.

40


Notes – Innovation Today • 1 Scientific articles and co-authorship, 1998 and 2008 • When articles (or patents) have multiple authors (or inventors) from different countries, these articles (patents) are either partly attributed to each country mentioned (fractional count) or fully attributed to every relevant country (simple count), thus generating multiple counting at an aggregate level. In general, fractional counting procedures are used to compute counts by countries, but the alternative is sometimes preferable, as with indicators on international co-operation. Trends in co-operation on scientific articles, 1985-2007 • The data are based on research articles in natural and medical sciences and engineering. Scientific collaboration with BRIC countries, 1998 and 2008 • Only countries with more than 500 publications, and/or EU27 and OECD countries are tabulated. North America: United States, Canada and Mexico. Europe: Austria, Belarus, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovenia, Slovak Republic, Spain, Sweden, Switzerland, United Kingdom and Ukraine. Far East and Oceania: Australia, Indonesia, Japan, Korea, Malaysia, New Zealand Singapore, and Thailand. Innovation hot spots in renewable energy, 2005-07 • Data relate to patent applications filed under the Patent Co-operation Treaty (PCT) for renewable energy technologies. Patent counts are based on the priority date, the inventor’s region of residence and fractional counts. The regional breakdown used is based on OECD’s Territorial Level 2. Innovation hot spots in biotechnologies and nanotechnologies, 2005-07 • Data relate to patent applications filed under the Patent Co-operation Treaty (PCT) in biotechnology and in nanotechnology. Patent counts are based on the priority date, the inventor’s region of residence and fractional counts. The regional breakdown used is based on OECD’s Territorial Level 2. Trends in technological innovation for climate change mitigation, 1978-2006 • Patents in technologies relating to climate change mitigation were identified using search algorithms developed by the OECD and the EPO. See OECD (2009), “Environmental policy framework conditions, innovation and technology transfer”, ENV/EPOC/WPNEP(2009)2/FINAL for the methodology. • Annex I Kyoto Protocol signatories: Australia, Austria, Belarus, Belgium, Bulgaria, Canada, Croatia, the Czech Republic, Denmark, Estonia, the European Union, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Monaco, the Netherlands, New Zealand, Norway, Poland, Portugal, Romania, the Russian Federation, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, the United Kingdom and the United States.


41

1 • Innovation Today – References

References Ark, B. van, J.X. Hao, C. Corrado and C. Hulten (2009), “Measuring Intangible Capital and its Contribution to Economic Growth in Europe”, EIB Papers 14(1). Barnes, P. and A. McClure (2009), “Investments in Intangible Assets and Australia’s Productivity Growth”, Productivity Commission Staff Working Paper, Canberra. Corrado, C., C. Hulten and D. Sichel (2009), “Intangible capital and US economic growth”, Review of Income and Wealth, 55(3), September, pp. 661-685. Edquist, H. (2009), “How Much Does Sweden Invest in Intangible Assets”, IFN Working Paper No. 785, Research Institute of Industrial Economics, Stockholm. Fukao, K., T. Miyagawa, K. Mukai, Y. Shinoda and K. Tonogi (2009), “Intangible Investment in Japan: Measurement and Contribution to Economic Growth”, Review of Income and Wealth, Vol. 55(3), pp. 717-736. JPO (2005-08), Annual Reports, JPO, Tokyo. Marrano, G.M., J.E. Haskel and G. Wallis (2009), “What Happened to the Knowledge Economy? ICT, Intangible Investment and Britain’s Productivity Record Revisited”, Review of Income and Wealth, Vol. 55(3), pp. 686-716. OECD (2008), OECD System of Composite Leading Indicators, OECD, Paris. OECD (2009), “Environmental Policy Framework Conditions, Innovation and Technology Transfer”, ENV/EPOC/WPNEP(2009)2/FINAL, OECD Environment Directorate, OECD, Paris. OECD (2010), OECD Handbook on Deriving Capital Measures of Intellectual Property Products, OECD, Paris. OECD (forthcoming), The Invention and Transfer of Environmental Technologies, OECD, Paris. OHIM (2005-08), OHIM Annual Reports, OHIM, Alicante. Saka, A., M. Igami and T. Kuwahara (2010) – Science Map 2010: Study on Hot Research Areas (2003-2008) by Bibliometric Method, National Institute of Science and Technology Policy (NISTEP), Ministry of Education, Culture, Sports, Science and Technology (MEXT), Japan.

42


Chapter 2 EMPOWERING PEOPLE to innovate People are at the heart of the innovation process. A first set of indicators focuses on the role education systems play in building competencies for innovation and on how this human capital is actually deployed on the labour market. These indicators position countries with respect to the performance of students from a young age and throughout the educational system, with a special focus on those with scientific skills, science and engineering degrees and doctoral holders, who are specifically trained for research. Additional indicators look beyond the education systems to labour market outcomes and skills mismatches. These indicators are only a selection of the very rich set of OECD indicators of performance and policy levers in the area of education and employment. Enabling people throughout the economy and society to participate in innovation will provide new ideas, knowledge and capabilities, and enhance the influence of market demand on innovation. A second set of indicators tries to deal with dimensions which are much harder to measure: the mobility of students and workers (and the tacit knowledge they bring with them); entrepreneurial talent (something that is hard to measure but is often considered critical for turning ideas into value); the role of consumers in innovation (as they can drive demand for specific technologies and create markets large enough for innovations to be developed). Here, the indicators selected are imperfect proxies but point to the need for better measurement using surveys of households or individuals. Finally the whole question of how individuals’ talents can be tapped and leveraged for innovation cannot be addressed through existing measures. A “Gap page” lays out the need for such metrics, the challenges, and the existing international efforts that go in the direction of addressing these gaps.

2.1 • Basic scientific skills............................................................................. 44 2.2 • Tertiary education................................................................................. 46 2.3 • Doctorate holders................................................................................. 48 2.4 • Skills mismatch..................................................................................... 50 2.5 • International mobility.......................................................................... 52 2.6 • Entrepreneurial talent.......................................................................... 54 2.7 • Gap page – Innovative workplace and skills for innovation............. 56 2.8 • Consumers’ demand for innovation................................................... 58


43

2.1 • EMPOWERING PEOPLE to innovate – Basic scientific skills Education systems play a broad role in supporting innovation because knowledge-based societies rely on a highly qualified and flexible labour force in all sectors of the economy and society. Innovation requires the capacity to continually learn and upgrade skills.

Reading, mathematics and science proficiency at age 15, 2006

Did you know?

Percentage of top performers Science

Reading

More than half of the 15-year-olds in the OECD countries have used a computer for more than five years, but 12% of students have never used a computer at school.

Mathematics

Hong Kong, China

(OECD, PISA 2006.)

Korea Finland Switzerland

While basic competencies are generally considered important for absorbing new technologies, highlevel competencies are critical for the creation of new knowledge and technologies. Emphasis is increasingly placed on capabilities for adapting and combining multidisciplinary knowledge and performing complex problem solving. The acquisition of such skills starts at a very early age.

Belgium Netherlands New Zealand Japan Czech Republic Canada Australia

A focus on top-performing students allows for a better understanding of proficiency patterns among 15-year olds. Data from the OECD’s Programme for International Student Assessment (PISA) show that in almost all OECD countries, the share of top performers was higher in mathematics than in science and reading. However, the variability in the proportion of top performers across countries suggests differences in countries’ potential capacities to staff future knowledge-driven industries with home-grown talent.

Austria Germany Denmark Slovenia OECD Iceland Sweden Estonia France United Kingdom

Results from PISA 2006 also show an association between how long students have been using computers and their performance in science. On average, 15-year-olds with more than five years of experience with computers raise their average PISA score in science by 90 score points compared to those who have used computers for less than one year. This gap corresponds to more than one proficiency level in the PISA science test.

Slovak Republic Poland Luxembourg Norway Hungary Ireland United States Russian Federation Spain Italy

Definitions

Israel Portugal Greece Turkey Chile Argentina Brazil Mexico Indonesia 0

5

10

15

Source: OECD, PISA 2006 Database.

20

25

30 %

Top performers in science are students proficient at Levels 5 and 6 in the PISA 2006 science assessment (i.e. they have obtained scores higher than 633.33 points). The other levels in science performance are: Level 4 (score of 558.7), Level 3 (score of 484.1), Level 2 (score of 409.5) and Level 1 (score of 334.9). Top performers in reading are students proficient at Level 5 in the PISA 2006 reading assessment (i.e. with scores higher than 625.61). Top performers in mathematics are students proficient at Levels 5 and 6 in the PISA 2006 mathematics assessment (i.e. with scores higher than 606.99).

1 2 http://dx.doi.org/10.1787/835310061550

44


Basic scientific skills – EMPOWERING PEOPLE to innovate • 2.1

Length of time students have been using a computer and mean PISA science score, 2006 Less than one year

One to three years

Three to five years

More than five years

600 Level 4 (559)

550

Level 3 (484)

500

450 Level 2 (410)

400 Level 1 (335)

350

Ita Po ly rtu ga l Gr ee ce Tu rke y OE C D Ru S ss ian love ni a Fe de rat ion Ch ile

Fin lan d Ca na da N e J ap a n w Ze ala nd Au s Ne tralia t he rla nd s Ko r ea Ge Cz rm ec h R any ep Sw ublic itz erl an d Au str ia Be lgi um I re lan Hu d ng ar Sw y ed en Po lan d De nm ar k Ice Slo l va k R and ep ub lic Sp ain No rw ay

300

How to read this figure In Finland, 15-year-old students who had more than five years of experience with computers had an average score of 574 points. This is 88 points higher than those who have used a computer for less than a year. Source: OECD (2010), Are the New Millennium Learners Making the Grade? Technology Use and Educational Performance in PISA 2006, OECD, Paris. See chapter notes. 1 2 http://dx.doi.org/10.1787/835310061550

Measurability The achievement scores are based on assessments administered as part of the Programme for International Student Assessment (PISA) undertaken by the OECD. The most recent available PISA data were collected during the 2006 school year. Around 400 000 students were randomly selected and represented about 20 million 15-year-olds in the schools of the 57 participating countries, including all 30 OECD member countries and 27 partner countries and economies. The target population is students aged from 15 years and 3 (completed) months to 16 years and 2 (completed) months at the beginning of the testing period and who were enrolled in an educational institution at the secondary level, irrespective of the grade level or type of institution, and irrespective of whether they participated in school full-time or part-time. Although the main focus of PISA 2006 was science, the survey also covered reading and mathematics. The PISA 2006 survey also, for the first time, sought information on students’ attitudes to science by including questions on attitudes within the test itself, rather than only through a complementary questionnaire. PISA 2006 also gave countries the option to administer a short questionnaire on students’ familiarity with information and communication technology (ICT). This questionnaire made it possible to gain more detail on students’ access to computers than the main questionnaire. The ICT questionnaire focused on how familiar students were with computers rather than on ICT in general. Students were asked how often they used computers, where and how they learned to use computers and the Internet, and how confident they were in performing certain computer tasks. As a result, a more nuanced picture of students’ access to, and use of, ICT can be drawn for the 25 OECD countries and 14 partner countries and economies that completed the ICT questionnaire. To complement the information on ICT, an additional questionnaire was sent to school principals about the use of ICT in their schools and the extent to which a lack of ICT hinders instruction.


45

2.2 • EMPOWERING PEOPLE to innovate – Tertiary education High graduation rates at university level indicate a country’s capacity to develop a highly skilled labour force. Increasing the number of students who enter and successfully complete a university programme requires efficient and flexible higher education systems. The cost and duration of studies and the lack of bridges between university and work may prompt students to leave their studies before graduation to enter the labour market.

Transition from upper secondary education to graduation at the university level, 2007 Graduation and entry rates

Did you know? In OECD member countries, four out of ten young people are expected to obtain a university degree during their lifetime.

Graduation rate at university level Entry rate into university education Graduation rate from upper secondary programmes designed to prepare students for university education

(OECD, Education at a Glance 2009.)

Differences between upper secondary and tertiary education graduation/entry rates are due to many factors: the arrival of international students and pathways from vocational programmes inflate university entries, while access restrictions, military service or time spent working deflate entries.

Australia Poland New Zealand Slovak Republic Iceland

Entry rates are affected by tuition fees. Public subsidies that cover education costs and serve as a substitute for work income may encourage participation in education, particularly among low-income students. Public universities in the Nordic countries do not charge tuition fees, and both the level of public aid and the university entry rate are high.

Sweden Finland Norway Russian Federation United States Portugal

Overall economic returns are a key driver of individuals’ decisions to invest in education beyond compulsory schooling. Very high private returns suggest that education should be expanded by increasing access and making loans more readily available, rather than by lowering the costs of education. Low returns indicate insufficient incentives for individuals to invest in education, either because education is not rewarded in the labour market, or because costs, in terms of tuition fees, foregone earnings and taxation, are relatively high.

Hungary Korea Netherlands Denmark Israel OECD United Kingdom Czech Republic Italy Slovenia Japan Ireland

Definitions

Greece

University education is tertiary-A education. Graduation rates are the estimated percentage of an age cohort that will complete the corresponding level of education during their lifetime. Entry rates represent the estimated percentage of an age cohort that will enter a university programme for the first time during their lifetime. Tuition fees are annual fees charged to students by public tertiary-A institutions. Public subsidies to households include grants/scholarships, student loans, family or child allowances contingent on student status, public subsidies in cash or in kind and interest-related subsidies for private loans. The net present value approach compares the discounted cash flows of costs (tuition fees and foregone earnings) and benefits (higher levels of earnings) from tertiary education (ISCED 5/6).

Austria Spain Chile Switzerland Estonia Germany Mexico Belgium Turkey Canada 0

20

40

60

80

100 %

Source: OECD (2009a), Education at a Glance 2009: OECD Indicators, OECD, Paris. See chapter notes. 1 2 http://dx.doi.org/10.1787/835354553320

46


Tertiary education – EMPOWERING PEOPLE to innovate • 2.2 Annual tuition fees charged by public universities and public subsidies to private entities, 2007 Public subsidies for education to private entities (% GDP)

Annual tuition fees (USD PPP)

Public subsidies for education to private entities (% GDP)

Annual tuition fees charged by public universities (USD PPP)

6 000

1.0 0.9

5 000

0.8 0.7

4 000

0.6

3 000

0.5 0.4

2 000

0.3 0.2

1 000

0.1 0.0

Ne

w

No rw

ay Ze ala nd De nm ar k Sw ed Un en i te dS tat Ne es t he rla nd s Au str ia Au str ali a Ice lan d Fin Ca lan na d da Un (2 0 ite d K 05) ing do m Ge rm an y Be lgi um Ire lan Hu d ng ar y Tu rke y Ja pa n Slo Ita va l kR y ep ub lic Po rtu ga l Fra nc e Ko r ea Sw itz erl an d Sp ain Me Cz x ec h R ico ep ub lic Po lan d

0


Private net present value for an individual obtaining tertiary education as part of initial education, 2005 Male

Female

USD PPP 220 000 180 000 140 000 100 000 60 000 20 000

en ed Sw

d

ay No rw

e

Ze ala n w

Fra nc

Ne

ke y

y Ge

Tu r

rm an

ali a str

04 ) (2 0

Au

a

ain

Au str i

Sp

ad a an d( 20 04 ) Be lgi um

Ca n

Fin l

04 )

ng ar y lan d( 20 04 ) Ko rea (2 00 3) Ire

Hu

c

lan d( 20

Po

es

tat

Re pu bli

Cz

ec h

04 )

ite dS

Un

Ita ly (2 0

Po rtu g

al

-20 000


Measurability In the calculation of private net present value, private investment costs include after-tax foregone earnings adjusted for the probability of finding a job (unemployment rate) and direct private expenditures on education. On the benefit side, the age-earning profiles are used to calculate the earnings differential between different educational groups (below upper secondary education; upper secondary or post-secondary non-tertiary education; and tertiary education). These gross earnings differentials are adjusted for differences in income taxes and social contributions as well as social transfers to arrive at net earnings differentials. The cash flows are further adjusted for the probability of finding a job (unemployment rates). These calculations are done separately for males and females to account for differences in earnings differentials and unemployment rates. From a policy perspective, awareness of economic incentives is crucial to understanding the flow of individuals through the education system. However, developing estimates of returns to education has some broad conceptual limitations and involves a number of restrictive assumptions for international comparability, see Chapter A8 in OECD (2009a), Education at a Glance 2009: OECD Indicators, OECD, Paris.


47

2.3 • EMPOWERING PEOPLE to innovate – Doctorate holders Doctoral graduates have attained the highest education level and are key players in research and innovation. They have been specifically trained to conduct research and are considered the best qualified to create and diffuse knowledge.

Graduation rates at doctorate level, 2007

Did you know?

As a percentage of the relevant age cohort Graduation rate at doctorate level in 2000 Percentage of doctorates awarded to women

Portugal

61

Switzerland

38

Sweden

46

Finland

52

Germany

42

United Kingdom

44

Australia

48

Austria

42

EU19

46

Slovak Republic

46

Netherlands

42

Russian Federation

n.a.

OECD

44

Norway

42

United States

50

Greece

40

Slovenia

46

Ireland

46

Czech Republic

37

France

42

Israel

53

Denmark

41

New Zealand

47

Belgium

39

In 2007, Brazil, China, India and the Russian Federation, taken together, trained half as many doctoral graduates as OECD countries, taken together. (OECD Science, Technology and Industry Scoreboard 2009.)

A small but growing proportion of the population obtains an advanced research programme degree. Since 2000, the number of OECD-area doctorates increased by 5% to reach more than 210 000 new doctorate holders in 2007. The higher participation of women at the doctoral level explains in large part the overall increase in doctorates awarded in the last decade. While the absolute number of science and engineering (S&E) doctorates increased significantly in all OECD countries over the last decade, the relative share of S&E doctorates has fallen in several countries. This is a serious concern for many countries given the important role played by science in today’s knowledge-based economies.

Italy

51

Korea

28

Japan

27

Canada

44

Poland

49

Definitions

Spain

48

Estonia

52

Hungary

42

Brazil

52

Doctoral graduates have attained the second stage of university education and obtain a degree at ISCED Level 6. They have successfully completed an advanced research programme and gained an advanced research qualification, e.g. Ph.D. Science degrees include: life sciences; physical sciences; mathematics and statistics; and computing. Engineering degrees comprise: engineering and engineering trades; manufacturing and processing; and architecture and building. Graduation rates represent the estimated percentage of an age cohort that will complete the corresponding level of education during their lifetime.

Turkey

41

Iceland

60

Mexico

40

Chile

35 0

1

2

3

Source: OECD (2009a), Education at a Glance 2009: OECD Indicators, OECD, Paris.

4 %

1 2 http://dx.doi.org/10.1787/835355261387

48


Doctorate holders – EMPOWERING PEOPLE to innovate • 2.3

Science and engineering graduates at the doctoral level, 2007 As a percentage of all new degrees at the doctoral level Science

Engineering

% 80 70 60 50 40 30 20 10 Ch ile Fra nc e I re lan d Sw ed en Ca na da Is r ae Es l ton ia Cz Belg ec i u hR m Ice epu bli lan c d( 20 0 Slo 6) ve ni a Un ite d K Italy ing do m Fin lan d N Ne orw ay w Ze Sw aland itz erl an d Au str i a De nm ar k Sp a Au in str ali a Slo v a J ap a kR n e Un pub l ite d S ic tat Po es rtu g Ge al rm an y Ko r ea P Ne olan d t he rla nd Hu s ng ar y Tu rke y Me xic o Gr ee ce

0

Source: OECD, Education Database, February 2010. 1 2 http://dx.doi.org/10.1787/835355261387

New graduates at doctorate level, by country of graduation, 2007 As a percentage of total OECD new graduates at doctorate level All fields of study

Science and engineering

28.6 26.6

% 15

10

5

ad a Po rtu ga l Au str ali a Po lan d Sw ed en Sw itz erl Cz an ec d hR ep ub lic Ne t he rla nd s Tu rke y Fin lan d Au str ia Me xic o Be lgi um Ire Slo l a va k R nd ep ub lic Gr ee ce No rw ay De nm ar k Hu ng ar y Ne w Ze ala nd

Sp ain

ly Ko r ea

Ita

Ca n

Ge

Un ite

Un ite dS

tat es rm an dK y ing do m Ja pa n Fra nc e

0

Source: OECD, Education Database, February 2010. 1 2 http://dx.doi.org/10.1787/835355261387

Measurability Graduation rates for tertiary programmes, including advanced research programmes, are calculated as net graduation rates (i.e. as the sum of age-specific graduation rates). Net graduation rates represent the estimated percentage of the age cohort that will complete tertiary education (based on current patterns of graduation). Gross graduation rates are used for countries that are unable to provide such detailed data. In order to calculate gross graduation rates, countries identify the age at which graduation typically occurs. The number of graduates, regardless of their age, is divided by the population at the typical graduation age. In many countries, defining a typical age of graduation is difficult because graduates are dispersed over a wide range of ages.


49

2.4 • EMPOWERING PEOPLE to innovate – Skills mismatch Getting people to the labour market is crucial to foster innovation, economic growth and social well-being. Ensuring the right balance between specific labour market needs and generic competencies is a challenge faced today by higher education institutions around the world.

Unemployment rate of university graduates, 2007 Women

Women 1998

Men

Men 1998

Did you know? On average across OECD countries, about 25% of people without a university degree are employed as managers, professionals or technicians.

National unemployment rate 2007

Turkey

8.0

Greece

4.3

Poland (1998-2005)

7.7

France

6.2

Spain

5.3

Italy

3.9

Germany

8.1

Mexico

2.5

Portugal

6.3

Belgium

5.7

Luxembourg (1999-2007)

2.8

Slovak Republic

8.5

Finland

5.3

Austria

3.3

Canada

5.3

Denmark

2.7

(OECD, Educational Attainment Database, 2009.)

Unemployment rates decrease as educational attainment increases for both males and females, but differences by gender exist. In most countries, the unemployment rate of females with university degrees is higher than that of men with the same educational level. In some countries it is even higher than the national unemployment rate. Transition to full employment can take several years and the match between educational attainment and occupation is not perfect. Unemployment rates of doctoral graduates in the humanities are generally higher than those in other fields. An analysis of the skill composition of employment based on occupation and educational attainment shows a difference between the supply of and demand for highly skilled employees in most countries. The attractiveness of research positions and careers is critical for innovation. Doctoral graduates are satisfied with their situation, but less so in terms of salaries, benefits, job security or opportunities for advancement. Dissatisfaction appears more prominent among women. Data on their earnings reveal that in most countries for which information is available, doctoral graduates are better paid when they do not work as researchers, especially outside the enterprise sector.

Sweden

4.2

United States

4.3

Iceland

2.6

Switzerland

2.4

Japan

3.7

Hungary

6.3

New Zealand

2.0

Korea

3.4

Australia

3.3

Definitions

United Kingdom

4.2

Ireland

4.1

Czech Republic (1998-2004)

3.7

Netherlands (1999-2007)

2.3

Skilled occupations are those designated by the UN “International Standard Classification of Occupations” (ISCO-88) as ISCO1 (legislators, senior officials and managers), ISCO2 (professionals) and ISCO3 (technicians and associate professionals).

Norway

1.7 0

2

4

6

8

10

Source: OECD (2009b), OECD Science, Technology and Industry Scoreboard 2009, OECD, Paris.

12

14 %

The index of occupations and educational attainment at the country level is computed as follows:

[(

Number of high skilled_occupation definition Number of high skilled_education definition

)

]

x 100 – 100

1 2 http://dx.doi.org/10.1787/835373004272

50


Skills mismatch – EMPOWERING PEOPLE to innovate • 2.4

Supply of and demand for highly skilled employees, 2009 Index 160 140 120 100 80 60 40 20 0 20 40

Employees in high-skill occupations as a percentage of those with at least a university degree

Extent of under-qualification

Cy pr us Sp ain Es ton ia I re lan Bu d lga ri a Lit hu an i Be a Un lgi ite u dK m ing do m Fin lan d Fra nc e No rw ay Gr ee ce Po lan d Sw ed en Tu rke y Ro ma ni a De nm ar k Lu Latv i xe mb a ou rg Hu ng Ne a t he r y rla nd s Cr oa ti a Ge rm an Po y rtu g Slo al ve ni a Ice lan d Slo Au str va kR ia ep ub lic Ma lta Cz I ec h R taly ep ub lic

Extent of over-qualification

How to read this figure In the Slovak Republic, there are two times (100%) more highly skilled individuals when defined on the basis of their job rather than their educational attainment. Source: OECD, ANSKILL Database, December 2009. 1 2 http://dx.doi.org/10.1787/835373004272

Percentage difference in median gross annual earnings between doctorate holders working as researchers and those not working as researchers, 2006 All sectors

% 40 30 20 10 0 -10 -20 -30 -40

Business enterprises

Non-researchers are better paid

es ite dS

tat

c Un

Re pu bli

Slo v

ak

ma ni a

Ro

05 )

05 )

No rw ay (2 0

an ds (2 0

erl

hu

an ia

Ne th

Lit

ia

La tv

d

Ice lan

nm ar k De

c Re pu bli ec h Cz

Cy pr us

Bu lga ria

05 ) (2 0

Be lgi um

Au str i

a

Researchers are better paid

How to read this figure In the United States, doctorate holders earn 12% more when they do not work as researchers, except in the business sector, where as researchers they earn 4% more than non-researchers. Source: OECD/UIS/Eurostat CDH data collection 2009. 1 2 http://dx.doi.org/10.1787/835373004272

Measurability As early as 1995 the OECD and Eurostat released a Manual on the Measurement of Human Resources Devoted to S&T (HRST), the “Canberra Manual”. HRST are measured on two dimensions: occupations (ISCO2 and ISCO3) and level of educational attainment (ISCED5 and ISCED6). On this basis, the OECD developed a new database, ANSKILL. This database aims to add an industry-level “skill” dimension to the STAN Database for Structural Analysis. It covers European countries, Australia, Canada, Japan and the United States. The major comparability issue relates to the industry breakdown. The need to focus on more specific sub-populations is further addressed through the OECD/UNESCO Institute for Statistics/Eurostat project on Careers of Doctorate Holders (CDH). This project aims at better understanding this population’s labour market, career paths and mobility. Efforts are being made to better measure specific aspects of the career patterns of doctorate holders. For instance, improved definitions and means of measuring two new important phenomena, postdoctoral positions and types of mobility (e.g. inter-sectoral and international mobility), are being established with the help of experienced institutions (e.g. the US National Science Foundation). These improvements will be included in the 2010 CDH data collection.


51

2.5 • EMPOWERING PEOPLE to innovate – International mobility Mobility – and in particular international mobility – of skilled human resources plays an important role in innovation. It contributes to the creation and diffusion of knowledge, particularly tacit knowledge, which is more effectively shared within a common social and geographical context. Coherent and efficient migration regimes help making the most of brain circulation.

International students, 2007

Did you know?

As a percentage of all tertiary enrolments

More than 65% of foreign tertiary students in the United States come from Asia.

2004

(OECD, Education Database, 2010.) Australia United Kingdom

One way for students to expand their knowledge of cultures and languages, and better equip themselves in an increasingly globalised labour market, is to pursue their higher-level education in countries other than their own. Some countries, particularly in the European Union, have established policies and schemes that promote such mobility to foster intercultural contacts and to help build social networks.

Switzerland New Zealand Austria Ireland

The proportion of international students in tertiary enrolments provides a good indication of the magnitude of student mobility in different countries. The indicator can be broken down by level and field of education and can be used to highlight programmes that attract students from abroad.

Canada (2002-06) Belgium OECD EU19

Young people are also more likely to move between jobs than older professionals. Job-to-job mobility is particularly strong in the Nordic countries, probably as a consequence of an active labour market policy combined with social safety nets.

Czech Republic Denmark Sweden

New data on doctorate holders reveal that in European countries 15% to 30% have experienced mobility over the past ten years. International mobility of professionals is driven by a variety of motives ranging from personal and family considerations to academic and job-related reasons.

Iceland Netherlands Finland United States

Definitions

Hungary Japan Norway Spain Estonia Slovenia Slovak Republic 0

5

10

15

20

Source: OECD (2009a), Education at a Glance 2009: OECD Indicators, OECD, Paris. See chapter notes.

25 %

International students are those who travel to a country different from their own for the purpose of tertiary study. Depending on country-specific immigration legislation and data constraints, the definition is based either on the student’s country of residence or on the student’s country of prior education. Job-to-job mobility is defined as the movement of an individual between one job and another from one year to the next. It does not include inflows into the labour market from a situation of unemployment or inactivity. The rates are established by using information on when the current job began and the working status of the person one year before the survey. Mobile doctorate holders are those who have stayed abroad and returned to their home country for professional or personal reasons.

1 2 http://dx.doi.org/10.1787/835412110164

52


International mobility – EMPOWERING PEOPLE to innovate • 2.5 Job-to-job mobility of human resources in science and technology (HRST), employed 25-to-64-year-olds, 2007 As a percentage of total employed HRST, 25-to-64-year-olds 2000

% 16 14 12 10 8 6 4 2

Ma lta Po rtu ga l Ge Cr rm oa an tia y (2 00 206 Lu ) xe mb ou rg Sw Cz ed Ita ec en hR ly (2 ep 00 Slo u 3 b va 07 lic kR ) (2 ep 00 ub 107 lic ) (2 00 107 ) Ro Hu ma ng nia ar y (2 00 407 ) Gr ee ce

De nm ar k Ice No lan rw d( ay 20 00 -0 6) Sp ain Cy pr us Fin Un Sw lan ite itz d dK erl ing an Ne d d om the (1 99 rla 6nd 20 s( 00 19 ) Slo 99 -2 ve 00 nia 7) (2 00 Tu 2rke 0 y( 7) 20 06 -0 7) Es ton ia Be lgi um Po Fra l an nc d( e Au 20 s tr 01 ali 0 a( 7) 20 02 -0 7)

0

Source: Eurostat, based on European Labour Force Surveys, October 2009. 1 2 http://dx.doi.org/10.1787/835412110164

International mobility of doctorate holders, by main destination, 2006 Percentage of national citizens with a doctorate having lived/stayed abroad in the past ten years Total

EU27

United States

Other countries

% 60 50 40 30 20 10 an ia

hu Lit

d

Po lan

c Re pu bli ak

Slo v


Bu lga ria

c Cz

ec hR ep ub li

al Po rtu g

a Au str i

Be lgi um

Sp ain

nm ar k De

Cy pr us

0

30% of doctorate holders currently based in Denmark had stayed abroad in the last ten years. The breakdown of their last destination is: 12% in Europe, 10% in the United States and 8% in other countries. Source: OECD/UIS/Eurostat CDH data collection 2009. 1 2 http://dx.doi.org/10.1787/835412110164

Measurability The measurement of mobility poses a real challenge to statisticians, mainly because of the difficulty of tracking a moving target. Mobility can occur between jobs in the same enterprise, the same industry or the same sector of the economy, between different sectors (e.g. from a university to an enterprise), or between countries. International mobility is often approximated by measures of stocks (e.g. foreign citizens or foreignborn) and not of flows (change of situation or move to another country). A further complication is the difficulty of differentiating temporary mobility from migration. The OECD has made good progress in recent years in developing better statistics on international mobility and migration, notably of international students, using the results of the 2000 worldwide cycle of censuses. The Careers of Doctorate Holders (CDH) project has introduced new ways of capturing mobility by introducing, on the one hand, a new definition of “internationally mobile doctorate holders” and, on the other, a series of questions on national origin, the list of countries in which doctorate holders have studied, worked or carried out research, and the reasons for mobility. The first results, shown above, are promising, but need to be consolidated with the next data collection.


53

2.6 • EMPOWERING PEOPLE to innovate – Entrepreneurial talent Entrepreneurship provides an expanded set of employment opportunities, wider skill development and greater opportunities to innovate. Entrepreneurship education plays a key role by raising awareness about entrepreneurship as a potential career path and developing skills for starting and growing companies.

Self-employed, by place of birth, 15-to-64-year-olds, 2008

Did you know?

As a percentage of total employment

25% of US high-technology companies started during 1995-2005 had at least one immigrant founder, and 50% in Silicon Valley.

Native-born

Foreign-born

(Wadhwa et al., 2007.) Greece Italy

Entrepreneurship empowers people to take their future into their own hands, whether through self‑employment or by creating a firm that employs other people. A country’s entrepreneurial activity therefore ranges from self-employment to the creation of high-growth firms.

Turkey (2007) Spain Australia (2006)

Self-employment is only part of a country’s total entrepreneurial activity, but it is a significant segment of the economy in most countries. In several countries the foreign-born are more likely to be self‑employed than the native-born. This correlates with several studies demonstrating the significant role played by immigrants in entrepreneurial ventures.

Portugal Czech Republic Canada Ireland Slovak Republic

Entrepreneurship education is critical for raising awareness about starting and growing a business and providing the skills, attitudes and behaviours to do so. Entrepreneurship education is growing significantly in countries across the world. Previously a specialised training programme, it is increasingly integrated in required courses at all levels of education.

Switzerland United Kingdom Belgium Poland (2007)

Despite this recent growth, in most countries less than a quarter of the population aged 18 to 64 indicated having participated in training for starting a business. This indicates the need for further progress in this area. There is also a need for more training in the management and growth of young enterprises.

Hungary Netherlands Germany United States Finland Austria Sweden (2007) France Denmark

Definitions

Estonia Norway Luxembourg 0

5

10

15

20

25

30

Source: OECD (forthcoming), International Migration Outlook: SOPEMI 2010. See chapter notes.

35 %

Self-employed persons are defined as those who work in their own business, professional practice or farm for the purpose of earning a profit. They may or may not have employees. A country’s foreign-born population includes all persons who have that country as their usual residence and who were born in another country. Training in starting a business includes all voluntary or compulsory training/courses during or after school.

1 2 http://dx.doi.org/10.1787/835542183283

54


Entrepreneurial talent – EMPOWERING PEOPLE to innovate • 2.6

Percentage of the population aged 18 to 64 years old who received any type of training in starting a business, during or after school, 2008 % 60

40

20

il

l

ke y Tu r

Br az

ia

Is r ae

Ind

ca

Ko r ea

fri

So uth A

ly Me xic o

Ita

ce

ee Gr

pa n Ja

e

tin a

Ar ge n

Fra nc

do m ing

rm an y

Un ite

dK

Sp ain

Ge

ry De nm ar k

d

ng a

Hu

d

Ire lan

Ice lan

Be lgi um

Ch ile Slo ve ni a

Fin lan

d

0

Source: Bosma, N., Z.J. Acs, E. Autio, A. Coduras and J. Levie (2009), Global Entrepreneurship Monitor: 2008 Executive Report, Global Entrepreneurship Research Association (GERA). 1 2 http://dx.doi.org/10.1787/835542183283

Measurability While several proxies have been used to determine the level of entrepreneurship in countries, more work needs to be done to develop metrics that provide a more complete picture of entrepreneurial activity (beyond self-employment or other measures currently used). The Labour Force Survey divides the population of working age (15 years and more) into three mutually exclusive groups: persons in employment, unemployed persons and inactive persons. Self-employment is a subcategory of persons in employment; the self-employed work in their own business and want to make profit. The concepts and definitions used in the Labour Force Survey are based on the guidelines of the International Labour Organisation and guarantee broad availability and comparability across countries. The Global Entrepreneurship Monitor (GEM) surveyed 54 developed and developing countries in 2008. GEM takes a broad view of entrepreneurship and focuses on the role of the individual in the entrepreneurial process. The survey asks about personal assessments, attitudes and perceptions, in addition to intentions of starting a business in the near future. Given the importance of entrepreneurship education, specific questions on this topic were included in the 2008 GEM study. Data on entrepreneurship education is difficult to compare as the data are usually collected at the local or regional level and focus on specific programmes rather than on measures which can be compared internationally. However, in the past ten years, interest in this area has grown and more national and international studies are being conducted, particularly in the United States and Europe. While data on activity (number of courses, number of students reached, number of faculty, etc.) can be obtained and are increasingly available, data on outcomes is limited (World Economic Forum, 2009) as few educational institutions (except in the United States) track their alumni and therefore are unable to measure the impact of the programmes on later career choices. There is a need to co-ordinate these local and national efforts so that more of the existing data collected can be shared internationally.


55

2.7 • GAP PAGE – Innovative workplace and skills for innovation For any organisation, an important source of continuing productivity growth is effective management of the organisation of work and ensuring that the talents of individuals are being tapped. Innovative capabilities are strengthened in work places which provide a fertile environment for innovation. Better measures are needed of the skills required and of ways in which the workplace promotes such skills.

Why do we need indicators ? The importance of work-based learning highlights the fact that skills acquisition is a lifelong process. In addition to formal education through the primary, secondary and tertiary levels, the learning that takes place on the job is a crucial component of skilled workers’ toolkits and helps shape innovation outcomes. A recent OECD firm-level study of nine countries shows that one of the main strategies of innovative companies is to accompany spending on new machinery with training of their workforce (OECD [2009c], Innovation in Firms: A Microeconomic Perspective). The skills and competencies required for innovation are broad. Incremental innovation and the improvement of organisational efficiency and routines, for example, can come from a range of workers, not just managers, researchers or external consultants, and can rely on different skills and competencies. Moreover, new organisational methods or marketing innovations require specialised skill sets well beyond traditional science and engineering training. The pace and changing nature of innovation, as well as changes in countries’ industrial structures, mean that people need to upgrade their skills throughout their adult lives. Training is only one of several instruments a firm can use to leverage its human capital potential. Interaction and learning within firms enables employees to share information, challenge existing patterns, and experiment and collaborate to improve products and processes. The potential role of learning and interaction within organisations has been highlighted as a way to strengthen firm performance in the post-crisis environment. However, these concepts remain difficult to quantify and better measurement instruments are needed.

Firms engaged in innovation-related training activities, by size, 2004-06 As a percentage of total innovative firms SMEs

Large firms

Total

% 100 80 60 40 20

nly

)

ark

6o

nm

00

(2 Sp

ain

) 04

2(2

00

rla

ly

It a

De

s

nd

d

the

lan

Ne

Po

y

rke Tu

li c ub

ep

ia

ary ng

hR ec Cz

Hu

ton

) ing tur fac

nu

ma Fra

nc

e(

Es

ia

str Au

um lgi Be

ed Sw

ub ep

va

kR

en

li c

ce ee Gr Slo

rin

Ca

na

da

(2

00

2-

04

,m

an

ufa

ctu

ve Slo

g)

nia

l ga

rtu Po

Lu

xe

mb

ou

rg

0

How to read this figure There is a wide variation across countries regarding the prevalence of innovation-related training activities at the firm level. In Luxembourg and Portugal, more than 70% of innovative firms engage in such activities, but in several other countries, the share is less than 50%. In all countries, SMEs are less likely than larger firms to engage in innovation-related training activities. Source: Eurostat CIS-2006 (CIS-4 for Italy) and for Canada: Statistics Canada, 2005 Survey of Innovation. 1 2 http://dx.doi.org/10.1787/835552812202

Definitions Training for innovation is defined as internal or external training specifically for the development and/or introduction of new or significantly improved products or processes. SMEs are firms with less than 250 employees.

56


Innovative workplace and skills for innovation – GAP PAGE • 2.7 What are the challenges? Developing a harmonised set of indicators to measure organisational change and innovative workplaces Organisational studies have long analysed the interaction between work organisation, skills and technology (Toner, 2009). Concepts such as job rotation, incentives to participate actively in innovation, and measures to monitor, evaluate, capture and diffuse improvements across work teams, are often used to describe new organisational practices and have been tested in a number of surveys (e.g. the European Working Conditions Survey, EWCS). Studies that have looked at the relation between new organisational practices and innovation have usually found it to be positive (Greenan and Lorenz, 2009). To improve understanding of these relations it is necessary to harmonise definitions and collect comparable indicators of organisational changes and innovative workplaces. Better measures of workplace skills are required, and there is scope to more fully exploit available matched firm-worker data to analyse the relation between skills, innovation and performance (Nås and Ekeland, 2009). Define and measure skills for innovation The skills and competencies required for innovation are broad. What measures can be used to capture the range of skills innovators need? Can such skills be in fact defined? A first challenge is to develop a conceptual framework to better guide and prioritise the measurement of skills for innovation. This entails distinguishing and defining the relations among concepts of creativity, entrepreneurship and innovation and linking measurement to clearly defined policy objectives. Once the target of measurement is defined, the appropriate survey vehicle must be chosen (see below).

Options for international action The MEADOW Guidelines on organisational change and its economic and social impacts (2010) www.meadow-project.eu/ The MEADOW (MEAsuring the Dynamics of Organisations and Work) Guidelines propose a measurement framework for collecting and interpreting internationally harmonised data on organisational change and its economic and social impacts for both private- and public-sector organisations. The objective is to provide evidence for European policy initiatives aimed at increasing the flexibility and adaptability of organisations and employees while simultaneously improving the quality of jobs during economic booms as well as downturns. The MEADOW Guidelines propose a survey that links the interview of an employer with interviews of his or her employees. This is the richest survey setting for measuring organisational change and its impacts on the workplace. Some aspects, such as the way existing organisational arrangements or processes of change are experienced and felt by employees, can only be captured with accuracy by interviewing the employees concerned. Other aspects, including general information about the organisation’s choice of policies and practices affecting the internal division of labour or relations with external suppliers or subcontractors are best measured at the employer level. Linked surveys can also provide different and complementary information on the same organisational characteristics or processes. The MEADOW Guidelines are the result of a Co-ordinating Action funded by the European Commission which brought together a multidisciplinary consortium of 14 partners from 9 European countries. A way forward would be to explore the potential of this survey to study organisational change linked to the introduction of new processes and organisational and management practices. The OECD PIAAC (Programme for the International Assessment for Adult Competencies) Survey www.oecd.org/els/employment/piaac/ Certain forms of work organisation demand particular skills of employees, but they are not always easy to measure. According to results from the OECD’s PIAAC pilot study, workers who participated in quality-improvement circles appeared to need higher reading and numeracy skills and stronger communication skills, while team-working was associated with greater internal communication skills. The full PIAAC survey, to be carried out in 2011, will cover Canada, Chile, Japan, Korea, the Russian Federation and United States, in addition to EU countries. It will allow for investigating the links between key cognitive skills and a range of variables, with a particular focus on skills of individuals and their actual use at work place. A way forward to measure skills for innovation at the workplace would be to explore the possibility of adding a “PIAAC-type” component/module to innovation surveys and thus link skills at the workplace to innovation outcomes. The Eurostat Community Innovation Survey (CIS) The next CIS-2010 will contain a short ad hoc module (about four questions) on “Creativity and Skills for Innovation”. The questions are currently under development.


57

2.8 • EMPOWERING PEOPLE to innovate – Consumers’ demand for innovation Enabled by new technologies, users and consumers play a growing role in the innovation process and can directly influence innovation and encourage the development of new technologies.

Final consumption expenditure of households, by selected category, 2008 As a percentage of total final consumption expenditures Health

Communication

Did you know? In ten OECD countries, mobile outpaced fixed lines as the main telecommunication revenue stream. (OECD Communications Outlook 2009.)

Education

United States

Health, communication and education are three important areas in which technological or organisational innovation will help to improve the goods or services delivered to the population. In these areas in particular, users and consumers can play an active role by testing new ideas and providing feedback to service providers (firms and governments) to help orient the innovation effort.

Korea Switzerland (2007) Australia (2007) Israel Mexico (2007) Portugal (2006)

Spurred by high consumer demand and rapid technological advances, information and communication technology (ICT) plays a large part in the everyday life of many OECD consumers. Although communication-related expenditures represent a small percentage of the household budget (2.6% in 2008), its share has grown steadily over the last two decades.

Japan (2007) Belgium Greece (2007) Slovak Republic Hungary Germany

Consumer demand for environmentally friendly goods and services (e.g. energy-efficient appliances, alternative-fuelled vehicles, non-toxic cleaning products) is likely to play an important role in the development of a new generation of “green” goods and services. Empirical work at the OECD indicates that exploiting such demand depends on price incentives and information-based measures to help consumers make informed choices based on their underlying demand for improved environmental quality.

Poland Canada Ireland Slovenia Netherlands Spain (2007) Finland France Estonia Czech Republic Iceland Austria (2007) Sweden Italy Norway (2006)

Definitions

Turkey Denmark United Kingdom Luxembourg 0

5

10

15

20

Source: OECD, National Accounts Database, February 2010.

25 %

The final consumption expenditure of households or demand from households (along with public consumption and investment) is part of a country’s domestic demand and one of the constituents of GDP. The data are compiled in the National Accounts. Final consumption expenditure of households is divided into 12 categories, including health, communication and education.

1 2 http://dx.doi.org/10.1787/835570672184

58


Consumers’ demand for innovation – EMPOWERING PEOPLE to innovate • 2.8

Percentage of households having invested in environmentally friendly products in the last ten years, 2008 Renewable energy (e.g. solar panels)

Energy-efficient electrical appliances (e.g. top-rated)

Energy-efficient lighting (e.g. compact flourescent)

Energy-efficient heating (e.g. condensing gas)

% 100 80 60 40 20

en

ay

Sw

ed

No rw

nd s Ne t he rla

Me xic o

Ko r ea

ly

e Fra nc

Ita

c Cz

ec h

Re pu bli

ad a

Au

Ca n

str

ali a

0

Source: OECD (forthcoming), Environmental Policy and Household Behaviour: A Survey of OECD Countries, OECD, Paris. 1 2 http://dx.doi.org/10.1787/835570672184

Monthly household expenditures on communication services, by type of access, 2007 Fixed

Mobile

Internet

Total

USD PPP 160 140 120 100 80 60 40 20

ry ng a

Hu

Ch in a

Me xic o

d Re pu bli c Po rtu ga l De nm ar k

Ze ala n

ec h Cz

ly

Ita

w Ne

Be lgi um

es

tat

d Un

ite dS

Po lan

ur g

a

ad

xe mb o

Lu

Ca n

pa n Ja

ay

e Fra nc

No rw

y ke

Tu r

Sp ain

itz erl an d

Sw

ing

Un ite

dK

I re lan

d

do m

0

Source: OECD (2009d), OECD Communications Outlook 2009, OECD, Paris. 1 2 http://dx.doi.org/10.1787/835570672184

Measurability Adoption of new environmentally friendly products is key to encouraging demand for “green” innovation. Unfortunately, household-level data on the adoption of such innovations for a cross-section of OECD countries is not available since standard commodity classifications do not offer a sufficient level of disaggregation. Moreover, much of the data required to assess the determinants of household behaviour – including the use of such innovations – are not reflected directly in consumer expenditure patterns. In order to fill this gap, the OECD collected data from 10 000 households on issues such as waste generation, energy and water use, personal transport and consumption of organic food. Work scheduled for 2011-12 focuses on the adoption of eco-innovations. National surveys were used to compare monthly spending by households on communication services with a breakdown (for some countries) by type of access. Unfortunately, these surveys are not always easy to compare since they use different questionnaires, definitions and methodologies. Countries such as Ireland, Poland and the United States do not include Internet services in their data. As the question of spending on ICT becomes more important, national surveys tend to become more detailed so that recent questionnaires are more internationally comparable than older ones.


59

2 • EMPOWERING PEOPLE to innovate – Notes


2.1. Basic scientific skills Length of time students have been using a computer and mean PISA science score, 2006 • Countries are ranked in descending order of mean PISA science scores. 2.2. tertiary education Transition from upper secondary education to graduation at the university level, 2007 • Year of reference for upper secondary graduation rates is 2006 for Australia. • Includes ISCED 4A programmes in Austria (“Berufsbildende Höhere Schulen”). Annual tuition fees charged by public universities and public subsidies to private entities, 2007 • Some levels of education are included with others for Japan and the Slovak Republic. • Public institutions only for Turkey, Switzerland and Poland. Private net present value for an individual obtaining tertiary education as part of initial education, 2005 • Cash flows (components) are discounted by 5% interest rate. • Assuming that foregone earnings for all individuals refer to the minimum wage, except for the Czech Republic, Hungary, Poland and Portugal, which report full-time earnings. 2.5. International mobility International students, 2007 • For the purpose of measuring student mobility, international students are defined on the basis of their country of residence in Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Estonia, Hungary, Japan, New Zealand, Norway, the Slovak Republic, Slovenia, Spain, Sweden, the United Kingdom and the United States. For the remaining countries international students are defined on the basis of their country of prior education (Finland, Iceland, Ireland and Switzerland). • Excludes data on social advancement education in Belgium. • Percentage in total tertiary education underestimated for the Netherlands, Canada and Switzerland because certain programmes are excluded. • Excludes private institutions in Canada. 2.6. Entrepreneurial talent Self-employed, by place of birth, 15-to-64-year-olds, 2008 • Self-employed excludes agriculture. For Canada, persons still in education are excluded.

60


References – EMPOWERING PEOPLE to innovate • 2

References Bosma, N., Z.J. Acs, E. Autio, A. Coduras and J. Levie (2009), Global Entrepreneurship Monitor: 2008 Executive Report, Global Entrepreneurship Research Association (GERA). Greenan and Lorenz (2009), “Learning Organisations”, report prepared for the OECD Innovation Strategy, 16 October. Nås, S.O. and A. Ekeland (forthcoming), “Take the LEED: Existing Surveys and Administrative Data to Analyse the Role of Human Resources for Science and Technology in Innovation and Economic Performance”, OECD Science, Technology and Industry Working Paper, OECD Directorate for Science, Technology and Industry, OECD, Paris. OECD (1995), Measurement of Scientific and Technological Activities: Manual on the Measurement of Human Resources Devoted to S&T – Canberra Manual, OECD, Paris. OECD (2006), Assessing Scientific, Reading and Mathematical Literacy: A Framework for PISA 2006, OECD, Paris. OECD (2007), PISA 2006 Science Competencies for Tomorrow’s World, Volumes I and II, OECD, Paris. OECD (2009a), Education at a Glance 2009: OECD Indicators, OECD, Paris. OECD (2009b), OECD Science, Technology and Industry Scoreboard 2009, OECD, Paris. OECD (2009c), Innovation in Firms: A Microeconomic Perspective, OECD, Paris. OECD (2009d), OECD Communications Outlook 2009, OECD, Paris. OECD (2010), Are the New Millennium Learners Making the Grade? Technology Use and Educational Performance in PISA 2006, OECD, Paris. OECD (forthcoming), International Migration Outlook: SOPEMI 2010, OECD, Paris. OECD (forthcoming), Environmental Policy and Household Behaviour: A Survey of OECD Countries, OECD, Paris. Toner, P. (2009), “Workforce Skills and Innovation: An Overview of Major Themes in the Literature”, internal document, OECD, Paris. Wadhwa, V., A. Saxenian, B. Rissing and G. Gereffi (2007), America’s New Immigrant Entrepreneurs: Part I, Duke Science, Technology and Innovation Paper No. 23, Duke University – Pratt School of Engineering, Durham, NC. World Economic Forum 2009, “Educating the Next Wave of Entrepreneurs: Unlocking Entrepreneurial Capabilities to Meet the Global Challenges of the 21st Century”, a report of the Global Education Initiative presented at the World Economic Forum, Switzerland, April.


61

Chapter 3 Unleashing innovation in firms A dynamic business sector is a main source of and channel for innovation. Indicators of firms’ birth and death rates reflect this dynamism. However, work is needed to improve the quality and timeliness of business registers and their international comparability. Policy areas for particular attention are the financing of innovative efforts, and the fostering of the start-up and growth of new firms via the appropriate regulatory framework. A few indicators are selected to reflect the cost of investment, the availability of venture capital and business angels networks, as well as regulatory and taxation indicators that are likely to affect entreprenurial activities. Indicators covering the interface between entrepreneurship and innovation are not yet well established. The focus here is on young dynamic firms and an experimental indicator obtained by the matching of patent filings with company data is proposed.

3.1 • Entry and exit........................................................................................ 64 3.2 • Mobilising private funding................................................................... 66 3.3 • Policy environment............................................................................... 68 3.4 • Young and innovative firms................................................................. 70


63

3.1 • Unleashing innovation in firms – Entry and exit The contribution of enterprises to innovation is crucial, and a dynamic business sector is a key source and channel of technological and non-technological innovation. New companies frequently exploit technological or commercial opportunities which have been neglected by more established companies and bring them to market.

Entry rate, average 2000-07 Number of newly registered corporations as a percentage of all registered corporations 2007 United Kingdom

Did you know? In the United States growth of employment in surviving firms after the first seven years is at least twice that of European firms. (Bartelsman, Scarpetta and Schivardi, 2005.)

Germany (2002-05) New Zealand

Entry rates provide information on the dynamism of the business sector.

Australia (2004-07) Italy

Employer indicators are more relevant for international comparisons than indicators covering all enterprises, as the latter are sensitive to the coverage of business registers.

Russian Federation Iceland United States (2003-05) Israel (2004-06)

Employer enterprise birth and death rates reflect the process of creative destruction. An efficient process of firm entry and exit makes an important contribution to aggregate employment and productivity growth: market selection leads to the death of less productive firms and the success of more productive ones.

Hong Kong, China Denmark Chile (2000-06) Luxembourg (2001-05) Switzerland (2002-07) Ireland

A breakdown by industry shows that there is more creative destruction in services than in manufacturing, with a net entry of services enterprises in most countries. The picture is less clear in manufacturing as relatively lower birth and death rates result in net entry of manufacturing enterprises in some countries and a net exit in others.

Turkey Hungary France (2000-06) Romania Norway (2001-06) Slovak Republic Netherlands (2002-05) Finland (2001-06) Lithuania Belgium (2000-06) Argentina (2000-06) Portugal Slovenia Spain Sweden Canada South Africa (2002-05)

Definitions

Czech Republic (2003-06)

Entry rates in the World Bank Database are calculated as the number of newly registered corporations divided by the number of total registered corporations.

Greece (2000-04) Austria (2001-07) Poland (2002-06) India (2001-06) Japan (2002-05) Mexico 0

5

10

15

20 %

Source: World Bank, Entrepreneurship Database WBGES08 (2008).

The employer enterprise birth and death rates in the OECD Structural and Demographic Business Statistics Database (SDBS) are calculated as the number of births and deaths of employer enterprises, respectively, as a percentage of the population of active enterprises with at least one employee.

1 2 http://dx.doi.org/10.1787/835584771745

64


Entry and exit – Unleashing innovation in firms • 3.1 Employer enterprise birth rate (2006) and death rate (2005) in the manufacturing sector As a percentage of the population of active enterprises with at least one employee Birth rate

% 18

Death rate

16 14 12 10 8 6 4 2

Ca n Po rtu g

ad a

Es ton ia Es ton ia

c

al

ak

Re pu bli

il

Po rtu g

Br az

ly

Ita

ry ng a

Hu

es

tat

d

i te dS

Slo v

Un

Ze ala n

d Ne w

Fin lan

l

De nm ar k

Is r ea

ur g

xe mb o

Lu

Slo ve ni a

Sp ain

a

en

ed Sw

Au str i

No rw

ay

0

Source: OECD, Structural and Demographic Business Statistics Database, November 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/835584771745

Employer enterprise birth rate (2006) and death rate (2005) in the services sector As a percentage of the population of active enterprises with at least one employee Birth rate

% 18

Death rate

16 14 12 10 8 6 4 2

al

ur g

xe mb o

nm ar k

Lu

De

ly

Ita

a

ad Ca n

ry ng a

Hu

d

Ze ala n

Ne

w

Sp ain

il

Br az

Fin lan

d

c Re pu bli

en

Slo v

ak

ed Sw

a Au str i

es

tat ite dS

Un

Slo ve ni a

l

Is r ea

No rw

ay

0

Source: OECD, Structural and Demographic Business Statistics Database, November 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/835584771745

Measurability The World Bank definition of entrepreneurship is a legal one, and entry rates are based on the number of limited liability corporations, or their equivalent in other legal systems, collected from business registers and other sources (including private ones) in the surveyed countries. The OECD, instead, defines an employer enterprise birth as the birth of an enterprise with at least one employee. This employer-based indicator, developed in the framework of the OECD-Eurostat Entrepreneurship Indicators Programme and included in the OECD Structural and Demographic Business Statistics Database (SDBS), distinguishes between start-ups without employees (self-proprietor/self-employed businesses) and the creation of new businesses with employees. The latter typically have a greater growth potential and economic significance. The data are collected only through official sources, e.g. national statistical offices, and thus ensure the international comparability of the data, which is not affected by differences in coverage of business registers. While the OECD measure of employer enterprise births is currently available for a smaller set of countries than the World Bank’s indicator of entry rate, the Entrepreneurship Indicators Programme will progressively cover more OECD member and non-member economies.


65

3.2 • Unleashing innovation in firms – Mobilising private funding Private funding, whether in the form of debt or equity, plays a key role in fuelling innovation. However, significant amount of funding has dried up owing to the recent economic crisis, particularly for seed and start-up companies.

Long-term interest rates, 2008

Did you know?

Per cent per annum

In 2009, US venture capital investment was USD 17.7 billion, while US business angels investment was USD 17.6 billion.

1990 Iceland

(NVCA/PwC, 2010; and Sohl 2010.)

South Africa Hungary

New and innovative small firms can obtain both debt and equity financing. The cost of financing investment had been decreasing, but following the financial crisis access to finance has become particularly difficult for entrepreneurs and young firms.

Mexico Russian Federation New Zealand Poland

For entrepreneurial firms, especially young, technologybased firms with high growth potential, venture capital is an important source of funding at the seed, start-up and growth phases. Venture capital differs significantly among countries and is very sensitive to market cycles in terms both of the amounts invested and the stages of investment. Under some conditions, venture capital funds may invest in the later stages, leaving gaps at the pre-seed and seed stages where profit expectations are less clear and risks are much higher.

Australia Korea Greece Slovak Republic Italy Czech Republic Slovenia

When entrepreneurs need other external sources of seed capital, business angels, often successful entrepreneurs or experienced business people, have become an increasingly important source of equity capital. Financing at this stage often comes informally from founders, friends and family; and formally from venture capital investors or business angels. Privatesector financing is becoming more organised. The United States has the most developed market but activity in Europe and other regions is growing.

United Kingdom Ireland Portugal Norway Belgium Spain Euro area Finland Denmark Austria

Definitions

France Netherlands Germany Sweden United States Canada Switzerland Japan 0

5

10

15

20 %

Source: OECD, Main Economic Indicators Database, October 2009.

Debt financing (e.g. loans from individuals, banks or other financial institutions; sale of bonds, notes or other debt instruments) involves the acquisition of resources with an obligation to repay. Venture capital is private equity provided by specialised firms acting as intermediaries between primary sources of finance (insurance, pension funds, banks, etc.) and private companies whose shares are not freely traded on any stock market. A business angel is a private investor who generally provides finance and business expertise to a company in return for an equity share in the firm. Some business angels form syndicates or networks in order to take on larger deals and spread risk.

1 2 http://dx.doi.org/10.1787/835656441446

66


Mobilising private funding – Unleashing innovation in firms • 3.2 Venture capital investment, 2008 As a percentage of GDP Seed/start-up

% 0.25

Early development and expansion

0.20 0.15 0.10 0.05

ce

d

ee Gr

ia

lan Po

str Au

ga

l

ly

Po

rtu

Ita

ary ng

rea Ko

Hu

da

y

na

Ca

an

um

rm Ge

Be

rla

Ne

the

lgi

nd

s

li c

es

ep

ub

tat

hR

ec Cz

Un

Sw

ite

dS

a in

e

Sp

nc

d

it z

erl

Fra

an

d

a

lan

ali

Ire

De

Au

str

nm

ark

ay

m

rw

do

No

en

ed

ing

dK

Un

ite

Sw

Fin lan

d

0.00

Source: OECD (2009a), Measuring Entrepreneurship: A Collection of Indicators, OECD, Paris, based on the OECD, Entrepreneurship Financing Database. See chapter notes. 1 2 http://dx.doi.org/10.1787/835656441446

Business angels, 2007 Number of networks/groups

270

100

Magnified

10

80

8 6

60

4 2

40

0

20

ni a ve

d

ce

Slo

ee Gr

li c

Fin lan

ub

ri a

ep

Cz

ec

hR

lga

ary

Bu

Hu

ng

ark nm

De

d

ia

str Au

lan Ire

um

Be

lgi

d

lan Po

ay rw

No

erl

it z

rla

Sw

the

an

nd

d

s

l ga

rtu

Ne

Ita

ly

Po

m

ing

do

en

ed

Un

ite

dK

a in

Sp

Sw

y an

rm

nc

e

Ge

Fra

Un

ite

dS

tat

es

0

Source: OECD (2009a), Measuring Entrepreneurship: A Collection of Indicators, OECD, Paris, based on the OECD, Entrepreneurship Financing Database. See chapter notes. 1 2 http://dx.doi.org/10.1787/835656441446

Measurability National and regional venture capital associations collect data on venture capital from their members. Until recently, venture capital data were not fully comparable internationally, owing to differences in definitions and classification methods. However, given recent changes in methodology, data have become more comparable: inward and outward flows are treated in the same way across countries and the comparability of industry classifications has improved (OECD [2009a], Measuring Entrepreneurship: A Collection of Indicators). National and regional angel capital associations are beginning to collect data on the informal angel investment sector. The US Angel Capital Association (ACA) and the European Business Angel Network (EBAN) work to expand the set of angel investment statistics beyond those currently available. Angel investment is growing in Asia and other regions, although data are not yet collected in a manner that allows for cross-country and regional comparisons.


67

3.3 • Unleashing innovation in firms – Policy environment While entry and growth of new firms is important, so is their adaptability to changes in the economy and their ability to exit when necessary. New enterprises drive a large number of obsolete firms out of the market and often do not survive very long themselves. A policy environment that fosters the start-up and growth of new firms is essential for innovation to flourish.

Days needed to start a business, 2010

Did you know? Since 2004, 254 reforms have made start-ups easier in 134 economies. Yet on average worldwide, it still takes 8 procedures and 36 days to start a business.

Days 2004 Brazil

(Doing Business, 2010.)

Indonesia Spain China

Cutting red tape to improve the quality of regulations is important for facilitating business creation. The decrease in the number of days needed to open a business shows significant progress in this direction.

Israel Poland Russian Federation India

A high-quality regulatory framework is important to allow businesses to enter the market and grow. In this respect, most OECD countries have lowered barriers to entrepreneurship during the last decade.

Austria Chile Argentina Luxembourg (2007-10)

In addition, individuals’ decisions to start a business are affected by taxes and tax policy: general taxes (personal income, corporate and capital gain tax rates, social security contributions) and targeted tax policies (tax incentives targeted to start-ups, young firms and SMEs). OECD analysis finds that reducing top marginal personal income tax rates raises productivity in industries with potentially high rates of enterprise creation.

Japan South Africa Switzerland Greece Germany Slovak Republic Sweden Czech Republic Korea Finland United Kingdom Mexico Ireland OECD Netherlands Italy Estonia

Definitions

Norway France United States Turkey Slovenia Portugal Denmark Saudi Arabia Iceland (2005-10) Canada Hungary Belgium Australia New Zealand 0

60

120

180

Source: International Bank for Reconstruction and Development/ World Bank (2009), Doing Business 2010, United States.

The barriers to entrepreneurship indicator measures regulations affecting entrepreneurship on a scale of zero to six; lower values suggest lower barriers. The index is composed of barriers to competition (legal barriers, antitrust exemptions, barriers in network sectors and in retail and professional services); regulatory and administrative opacity (licences, permits, simplicity of procedures); and administrative burdens for creating new firms. The marginal tax rate covers employees’ and employers’ social security contributions and personal income tax. The corporate income tax rate is the statutory tax rate applicable to incorporated businesses. It combines the central and sub-central (statutory) corporate income tax rate. Days needed to start a business is the median duration indicated by incorporation lawyers as necessary to complete the procedures.

1 2 http://dx.doi.org/10.1787/835713671578

68


Policy environment – Unleashing innovation in firms • 3.3 Barriers to entrepreneurship, 2008 Scale from 0 to 6 from least to most restrictive Regulatory and administrative opacity

Administrative burdens on start-ups

Barriers to competition

Index 3.0 2.5 2.0 1.5 1.0 0.5

De nm ar k Au str ali a Ko r ea Po rtu ga Sw l itz erl an d Au str ia No rw ay Sp Un ain i te dS tat es Fra nc e Ge rm an y Ja pa n Fin lan d Be lgi Cz um ec hR ep u bli Ne c w Ze ala Lu nd xe mb ou rg Hu ng ar y Ice lan d Me xic o Po lan d Tu rk e y

ly

ad a

Ita

Ca n

Un ite

dK

ing do m Ne t he rla nd s Sw ed en

0.0

Source: OECD, Product Market Regulation Database, December 2009. 1 2 http://dx.doi.org/10.1787/835713671578

Taxation on personal income and corporate income, 2009 Marginal personal income tax and social security contribution rates on gross labour income and statutory corporate income tax rates Marginal personal income tax and social security contribution rates on gross labour income

Statutory corporate income tax rates

% 80 70 60 50 40 30 20 10

ce Fin lan d Po rtu ga l Ire lan d No rw Lu a xe mb y ou Ne rg t Cz her la ec n ds hR Un ep u ite d K bli c ing do m Tu rke y Au str ali a Ge Un rma n it y Slo ed S tat va e kR s ep Sw ubli c it z erl an d Au str ia Ice lan Ne w d Ze ala nd Sp ain Po lan d Ca na da Ja pa n Me xic o Ko rea

e

nc

ee

Fra

Gr

ly

Ita

ary

ark

De

nm

en

ng

ed

Hu

Sw

Be

lgi

um

0

Source: OECD (2010), Taxing Wages 2008-2009: 2009 Edition, OECD, Paris. See chapter notes. 1 2 http://dx.doi.org/10.1787/835713671578

Measurability Product market regulations (PMR) indicators are quantitative indicators derived from qualitative information on laws and regulations that may affect competition. The qualitative information mainly comes from answers to a questionnaire by national administrations, the results of which are subject to peer review, which guarantees a high level of comparability across countries. Higher-level (composite) indicators, such as the barrier to entrepreneurship indicator, are calculated as weighted averages of their lower-level indicators using equal weights for aggregation. See OECD (2009b), Economic Policy Reforms: Going for Growth 2009, Chapter 7 and Annex 7.A1. Personal income taxes and the differential between the treatment of self-employment income and wage income affect individuals’ decision to start a business. Corporate taxes determine the after-tax returns on investment and therefore drive firms’ investment decisions and potential entrepreneurs’ decision on whether to start investing. Personal income tax rates on gross wage income are calculated using the OECD Taxing Wages framework, which allows for broad international comparability across countries. However, the difficulty of calculating comparable tax rates remains a significant burden for cross-country studies on the impact of taxation on entrepreneurship.


69

3.4 • Unleashing innovation in firms – Young and innovative firms Entrepreneurship is not about firm size. It concerns a process that results in growth, creativity and innovation. Young dynamic firms fuel innovation by developing new or improving existing goods, services or processes.

One- and two-year-old employer enterprises in manufacturing and in services, 2006

Did you know? Companies less than five years old created nearly two-thirds of net new jobs in the United States in 2007.

As a percentage of the total population of employer enterprises Services one-year-old Services two-year-old

(Kauffman Foundation, 2009, based on US Census data.)

Manufacturing one-year-old Manufacturing two-year-old

An economy’s share of young firms may indicate its dynamism. Younger firms are more prevalent in services than in manufacturing. There may be less turbulence in manufacturing, where older incumbents have acquired a strong competitive position over the years. It would be useful to have post-entry data on the performance of young businesses across countries to compare differences in their survival rates and determinants of growth across countries.

Austria

Canada

Denmark

The presence of young firms among patent applicants underlines the inventive dynamics of firms early in their development. It shows their desire to develop new activities and products; this may affect their survival and relative growth. An experimental indicator obtained by the matching of patent filings with businesses listed in the ORBIS database is presented on the right page. This allows looking at the age distribution of patenting firms. This preliminary exercise successfully matches between 70 to 90 percent of total PCT filings depending on the country. In Austria, Denmark, Norway, Spain, Sweden, the United Kingdom and the United States, young firms filed 10% to over 20% of all PCT patents filed in 2005-07.

Finland

Hungary

Israel

Italy

Luxembourg

New Zealand

Norway

Portugal

Slovak Republic

Slovenia

Definitions

Spain

United States

0

2

4

6

8

10

Source: OECD, Structural and Demographic Business Statistics

12 %

The share of n-year-old employer firms for a particular year t refers to the number of n-year survival enterprises as a percentage of the total enterprise population in year t. The number of n-year survival enterprises for a particular year t is the number of enterprises with at least one employee for the first time in year t-n which have not exited in year t. This definition excludes cases in which enterprises merge or are taken over by an existing enterprise in year t‑n.

Database, November 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/835714365117

70


Young and innovative firms – Unleashing innovation in firms • 3.4

Patenting activity of young firms, 2005-07 Share of young patenting firms and share of PCT patent filings by young firms Patents filed by firms under 5 years old

Patenting firms under 5 years old

% 40 30 20 10

ly

Ge

rm

Sp

Ita

a in

y an

en

ed Sw

e

nc Fra

Un

ite

Be

dK

lgi

do

ing

rla the Ne

Un

um

m

s

nd

d

Fin lan

ia

dS

Au

tat

str

es

ay rw

ite

De

No

nm

ark

0

How to read this figure In Denmark, Norway, United States and Austria young firms represent over 20 per cent of patenting firms and they account for over 10 percent of all PCT filings in their respective countries. In other economies, such as Italy or the Netherlands, most of the PCT patent filings are by firms older than 5 years. These estimates are based on a preliminary matching of patent and business data. Source: OECD, HAN Database, October 2009 and ORBIS© Database, Bureau Van Dijk Electronic Publishing, August 2008. See chapter notes. 1 2 http://dx.doi.org/10.1787/835714365117

Patenting and survival – within a two-year window, 2006 Survival rate differential between patenting and non-patenting firms (independent and part of a larger group) Independent firms % 20

High-technology manufacturing

15

Firms which are part of a larger group

Knowledge-intensive business services

Information and communication technologies (ICT)

10 5

m

e

do

ing dK

ite Un

d

nc Fra

do

ing dK

ite Un

Fin lan

m

e

d

nc Fra

do

ing Un

ite

dK

Fin lan

m

e

nc Fra

Fin lan

d

0

How to read this figure Firms that applied for a patent in 2004 had a higher survival rate after two years (2006) than firms that did not apply for a patent. For French firms in the ICT sector that are not part of a group, patenting firms had a 10% higher chance to survive than non-patenting independent firms in the same sector. Source: OECD, Innovation and entrepreneurship microdata project, 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/835714365117

Measurability Firm age is computed as the time elapsed between the date of incorporation and the priority date (date of first filing for a patent worldwide). To identify young firms among patent applicants, firms identified as PCT patent applicants were matched with the ORBIS© database from Bureau Van Dijk Electronic Publishing. The names of applicants as they appear in the patent were linked with those of firms listed in business registers. The exercise was first performed on European and US patentees listed in EPO and PCT patent applications. Coverage is being extended to other countries and other patent offices (the Japan Patent Office, the US Patent and Trademark Office). Ideally, this exercise should match national business registers with patent data. A pilot study was carried out as part of the OECD microdata project on entrepreneurship and innovation and covers Finland, France and the United Kingdom. It compared survival rates of firms that patented and those that did not (the patenting year is 2004, with survival observed in 2006). The data are broken down for independent firms and firms that are part of a group. The range of countries covered will be extended and more sophisticated indicators developed, e.g. the growth trajectory of patenting and non-patenting firms.


71

3 • Unleashing innovation in firms – Notes


3.1 Entry and exit Employer enterprise birth rate (2006) and death rate (2005) in the manufacturing sector • Manufacturing refers to: Mining and quarrying; Manufacturing; Electricity, gas and water. • For Canada, employer enterprises with fewer than 250 employees. Employer enterprise birth rate (2006) and death rate (2005) in the services sector • Services refers to: Wholesale and retail trade; Hotels and restaurants; Transport, storage and communications; Financial intermediation; real estate, renting and business activities. • For Canada, employer enterprises with fewer than 250 employees. 3.2 Mobilising private funding Venture capital investment 2008 • The OECD defines here venture capital as the sum of “seed/start-up stages” and “early development and expansion stages”. The latter includes: –– For Australia, early expansion, late expansion, turnaround. –– For Canada, other early stage, expansion, turnaround. –– For Korea, initial-early stage, middle stage-early (firms 3 to 5 years), middle stage-late (firms 5 to 7 years). –– For Japan, early stage, expansion. –– For the United Kingdom, other early stage, expansion. –– For the United States and Israel, early stage, expansion. –– For European countries (except the United Kingdom), growth, rescue/turnaround. Source: OECD, based on data from Thomson Financial, PwC, EVCA, National Venture Capital Associations, Australian Bureau of Statistics and Venture Enterprise Center. Business angels, 2007 • Estimates for the number of business angel networks. • In the United States, some angel capital organisations are funds rather than networks. Groups include networks plus funds. 3.3 Policy environment Taxation on personal income and corporate income, 2009 General notes on the chart: • Marginal tax rate, covering employees’ and employers’ social security contributions and personal income tax, with respect to a change of gross labour costs. It is given for a single person without dependents, at 167% of the average wage earner/average production worker. It assumes a rise in gross earnings of the principal earner in the household. The outcome may differ if the wage of the spouse goes up, especially if partners are taxed individually. • The marginal rates are expressed as a percentage of gross wage earnings. • The corporate income tax shows the basic combined central and sub-central (statutory) corporate income tax rate given by the adjusted central government rate plus the sub-central rate.

72


Notes – Unleashing innovation in firms • 3 Notes on the statutory corporate income tax rate: • For Australia, New Zealand and the United Kingdom, all with a non-calendar tax year, the rates shown are those in effect as of 1 July, 1 April and 1 April, respectively. • In Belgium, the effective corporate income tax rate can be substantially reduced by a notional allowance for corporate equity. • For France, the rates include a surcharge but do not include the local business tax (Taxe professionnelle) or the turnover-based solidarity tax (Contribution de solidarité). • For Germany, the rates include the regional trade tax (Gewerbesteuer) and the surcharge. • For Hungary, the rates do not include the turnover-based local business tax, the innovation tax and the credit institutions’ surtax. • For Italy, these rates do not include the regional business tax (Imposta Regionale sulle Attività Produttive – IRAP). • Poland has no sub-central government tax, however local authorities (at each level) participate in a given percentage of the tax revenue. • For Switzerland, church taxes, which enterprises cannot avoid, are included. • For the United States, the sub-central rate is a weighted average state corporate marginal income tax rate. • For the Netherlands it applies to taxable income over EUR 200 000. Notes on the marginal personal income tax rate: • For Greece, average wages overestimate actual gross earnings because they include benefits linked to marriage and children which are not available to all families. • For Turkey, wage figures are based on the old definition of average worker (ISIC D, Rev.3). 3.4 Young and innovative firms One- and two-year-old employer enterprises in manufacturing and in services, 2006 • Manufacturing refers to: Mining and quarrying; Manufacturing; Electricity, gas and water. • Services refers to: Wholesale and retail trade; Hotels and restaurants; Transport, storage and communications; Financial intermediation; real estate, renting and business activities. • For Canada, employer enterprises with fewer than 250 employees. Patenting activity of young firms, 2005-07 • Data refer to patent applications filed under the Patent Co-operation Treaty (PCT) by firms with a priority in 2005-07. Counts are based on a set of patent applicants successfully matched with business register data. Patenting and survival – within a two-year window, 2006 • The following list of industries was used to calculate the groupings: –– High-technology manufacturing Manufacture of chemicals and chemical products (ISIC Revision 4: 2011); Manufacture of basic metals (2410); Manufacture of fabricated metal products (2599); Manufacture of computer, electronic and optical products (2610, 2620, 2630, 2640, 2651, 2660, 2670); Manufacture of electrical equipment (2710, 2733, 2740, 2790); Manufacture of machinery and equipment, n.e.c. (2811, 2817, 2819, 2822, 2829); Manufacture of motor vehicles, trailers, and semi-rail (2930); Manufacture of other transport equipment (3011, 3030); Other manufacturing (3250, 3290); Repair and installation of machinery and equipment (3312, 3313, 3314, 3315, 3319, 3320); Waste collection, treatment and disposal activities (3812, 3822); and Repair of computer and personal and household goods (9511, 9512, 9521). –– Knowledge-intensive business services Mining support service activities (0910, 0990); Repair and installation of machinery and equipment (3312); Publishing activities (5811, 5812, 5813, 5819, 5820); Sound recording and music publishing activities (5920); Telecommunication (6110, 6120); Computer programming, consultancy and related activities (6201, 6202, 6209); Information service activities (6312); Professional, scientific and technical activities (6910, 6920, 7010, 7020, 7110, 7120, 7210, 7220, 7310, 7320, 7410, 7420, 7490); Employment activities (7810, 7820, 7830); and Repair of computers and peripheral equipment (9511). –– Information and communication technologies Manufacture of computer, electronic and optical products (2610, 2620, 2630, 2640, 2651, 2670); Manufacture of electrical equipment (2731, 2732, 2790); Manufacture of machinery and equipment, n.e.c. (2817, 2819, 2829); Other manufacturing (3250, 3290); Repair and installation of machinery and equipment (3312, 3313, 3314, 3319, 3320); Wholesale trade (4651, 4652); Publishing activities (5811, 5812, 5813, 5819, 5820); Sound recording and music publishing activities (5920); Programming and broadcasting activities (6010, 6020); Telecommunication (6110, 6120, 6130, 6190); Computer programming, consultancy and related activities (6201, 6202, 6209); Information service activities (6312); Rental and leasing activities (7730); and Repair of computers and peripheral equipment (9511, 9512, 9521). For more details on the International Standard Industrial Classification (ISIC, Revision 4), see www.unstats.un.org/unsd/cr/registry/ regdntransfer.asp?f=135. Source: OECD, Working Party on Industry Analysis (WPIA) Innovation and Entrepreneurship Microdata Project, 2009.


73

3 • Unleashing innovation in firms – References

References Bartelsman, E., S. Scarpetta and F. Schivardi (2005), “Comparative Analysis of Firm Demographics and Survival: Evidence from Micro-Level Sources in OECD Countries”, in Industrial and Corporate Change, Volume 14(3), June, pp. 365-391. International Bank for Reconstruction and Development/World Bank (2009), Doing Business 2010, United States. National Venture Capital Association/Pricewaterhouse Coopers (2010), “Fourth Quarter 2009/Full-year 2009 MoneyTreeTM Report”, United States. OECD (2009a), Measuring Entrepreneurship: A Collection of Indicators, OECD, Paris. OECD (2009b), Economic Policy Reforms: Going for Growth 2009, OECD, Paris. OECD (2010), Taxing Wages 2008-2009: 2009 Edition, OECD, Paris. Sohl, J. (2010), “The Angel Investor Market in 2009: Holding Steady but Changes in Seed and Startup Investments”, Center for Venture Research, Whittemore School of Business and Economics at the University of New Hampshire, United States, April. Stangler, D., and R.E. Litan (2009), “Where Will the Jobs Come From?”, Kauffman Foundation Research Series: Firm Formation and Economic Growth, Ewing Marion Kauffman Foundation, United States, November.

74


Chapter 4 Investing in innovation Government plays an essential role in fostering public and private investment in innovation. A first set of indicators looks at investment in R&D and innovation performed by the business sector, government and higher education. Traditional input indicators are accompanied by “experimental” indicators, for example on the mix of direct and indirect public support to R&D, as well as measures of public funding “modes” (e.g. institutional versus project funding). A second set of indicators examines investment in smart ICT infrastructure at the aggregate level, as well as by business and governments. Governments not only play a major role in fostering innovation, they actively participate in the innovation process and provide innovative services. Internationally agreed concepts and comparable metrics for studying innovation in the public sector do not yet exist. A “Gap page” highlights the need for such metrics and the scope for international action. There are also major gaps in our understanding of investments to support innovation and related responsibilities at different levels of government. A second “Gap page” addresses issues of measurement at the sub-national level.

4.1 • Firms investing in R&D....................................................................... 76 4.2 • Firms investing in innovation............................................................. 78 4.3 • Government funding R&D.................................................................. 80 4.4 • Higher education and basic research................................................ 82 4.5 • Information and communication technologies................................ 84 4.6 • Firms and smart infrastructure......................................................... 86 4.7 • Governments and smart infrastructure............................................ 88 4.8 • Gap page – Measuring innovation in the public sector................... 90 4.9 • Gap page – Multilevel governance of innovation............................. 92


75

4.1 • Investing in innovation – Firms investing in R&D Innovation requires a wide array of public and private investments. However, private investment in R&D and innovation may be below a socially optimal level, mainly because returns are uncertain or the innovator cannot appropriate all the benefits. Governments play an important role in fostering investment in R&D and innovation.

Business enterprise expenditure on R&D, 2008 As a percentage of GDP

Did you know? 22 OECD governments provide fiscal incentives to support business R&D.

1998

(OECD, R&D tax incentives project, 2010.)

Israel Sweden (1999-2008)

Business enterprise expenditure on R&D (BERD) is considered important for innovation and economic growth. It has frequently been used to compare countries’ private-sector efforts on innovation. For OECD countries, business R&D accounted for 1.65% of GDP in 2008, slightly more than in 1998 (1.45% of GDP).

Finland Japan (1998-2007) Korea Switzerland (2000-08) United States Singapore

Governments can choose among various tools to leverage private-sector R&D. They can offer firms direct support via grants or procurement or they can use fiscal incentives, such as R&D tax incentives. Direct R&D grants/subsidies target specific projects with high potential social returns; tax credits reduce the marginal cost of R&D activities and allow private firms to choose which projects to fund.

Denmark Austria Germany OECD Iceland Belgium Luxembourg (2000-08) France

Countries differ in their use of direct and indirect support. The United States (through competitive R&D contracts) and Spain rely more on direct support, while Canada and Japan mostly use indirect support to foster industrial R&D. The optimal balance of direct and indirect R&D support varies from country to country, as each tool addresses different market failures and stimulates different types of R&D. For instance, tax credits mostly encourage short-term applied research, while direct subsidies affect more long-term research. A new indicator of this policy mix has been developed and gives a rather different picture of international comparisons of public support to R&D.

Australia (1998-2006) EU27 United Kingdom Slovenia China (1998-2007) Canada Ireland Czech Republic Netherlands Norway (1999-2008) Portugal Spain Russian Federation Italy South Africa (2001-07) Hungary New Zealand (1999-2007) Turkey Slovak Republic Poland Mexico (1998-2007) Romania

Definitions

Greece (1999-2007) Argentina (1998-2007) 0

1

2

3

4

Source: OECD, Main Science and Technology Indicators Database, March 2010. See chapter notes.

5 %

Government direct R&D funding includes grants, loans and procurement. Government indirect R&D funding includes tax incentives such as R&D tax credits, R&D allowances, reductions in R&D workers’ wage taxes and social security contributions, and accelerated depreciation of R&D capital.

1 2 http://dx.doi.org/10.1787/835805814452

76


Firms investing in R&D – Investing in innovation • 4.1 Direct and indirect government funding of business R&D and tax incentives for R&D, 2007 As a percentage of GDP Direct government funding of BERD

Indirect government support through R&D tax incentives

% 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05

ia Fin lan d ay (2 Un 00 ite 8) dK G in g erm an do y m (2 Ice lan 0 08 ) d( 20 08 ) Be Lu lgiu m xe mb De nm o ark urg (2 00 8) Hu Au ng str a ali ry a( 20 06 ) Ire lan Ne w d Ze ala nd Sw itz erl an Italy d( 20 08 ) Slo Ja p va a n kR T ep ub urke y lic (2 00 Ne 8 ) the r Ca na land da s (2 00 8) Po rtu ga l Po lan d M Gr ee exic o ce (2 00 5)

en

str

rw

No

ed

Sw

Au

li c

a in

ub

ep

Sp

)

8)

00

(2

rea

hR

ec Cz

00

08

Ko

(2

e(

nc

es tat

Fra

Un

ite

dS

20

8)

0.00

Source: OECD, based on OECD, R&D tax incentives questionnaire, January 2010; and OECD, Main Science and Technology Indicators Database, March 2010. See chapter notes. 1 2 http://dx.doi.org/10.1787/835805814452

Measurability Direct government funding of R&D is the amount of business R&D funded by the government as reported by firms. It is the sum of different components (contracts, loans, grants/subsidies) with different impacts on the cost of performing R&D. R&D grants and loans decrease the cost of performing R&D, but contracts (usually awarded through competitive bidding) do not directly affect the cost of performing R&D. More information on the different components is needed to better understand the impact of direct R&D support on firms’ performance. While information on total government direct support is available at both national and international levels, this is usually not the case for R&D-related tax expenditures. Their omission from measures of governmentfinanced R&D leads to incomplete indicators of public R&D support. To gain a more complete view, the OECD developed a questionnaire to collect information on countries’ R&D tax incentive schemes and to estimate the cost of such R&D tax incentives. Countries’ R&D schemes differ. Most countries provide fiscal incentives through tax credits or allowances and capital expensing. In Belgium, France, Korea and Spain, additional fiscal incentives are provided through reductions in R&D workers’ wage taxes and social security contributions. In some countries, the reported cost of tax incentives differs from the real cost. For instance, Austria has both an R&D tax credit and R&D allowances but only reports the cost of the R&D tax credit. Belgium’s tax incentives cover R&D expenditures but also include a deduction for patent income. When possible and to improve international comparability, figures are adjusted to meet the internationally accepted definition of R&D. The OECD is working to compare countries’ R&D schemes and methodologies and to assess factors that affect the overall cost (inclusion of sub-national R&D tax credits, differences in firm eligibility, etc.).


77

4.2 • Investing in innovation – Firms investing in innovation Spending on innovation is more than spending on R&D. To develop new products or processes, firms invest in R&D and in other tangible and intangible assets. Governments play a role through programmes that encourage firms to continue investing in innovation-related activities.

Expenditure on innovation, by firm size, 2006

Did you know?

As a percentage of turnover

In most countries, 5-7% of firms’ turnover comes from products that are new to the market.

SMEs

Large firms

(OECD, Innovation microdata project, 2010.)

Canada (2004, manufacturing)

Firms invest in innovation to gain market share, reduce costs or, more generally, to become more productive. For many firms, innovation is essential, as consumer demand has become more sophisticated and competition has increased.

Korea (2008, manufacturing)

Estonia

On average, firms tend to spend 1-2% of turnover on various innovation-related activities, but this share exceeds 5% for large firms in some countries. R&D usually accounts for around one-half to two-thirds of all innovation expenditure, but the share varies widely by sector and firm size.

South Africa (2005)

Luxembourg

Germany

In addition to their own resources, many firms benefit from different public support programmes to encourage investment in innovation activities. Between one-tenth and one-third of innovating firms participate in such schemes, with large firms receiving public support more frequently than SMEs.

Italy

Denmark

A recent OECD study using innovation surveys for 21 countries showed that firms receiving public support for innovation invest 40% to 70% more than those that do not. Also, higher levels of firms’ investment in innovation lead to higher innovation sales and productivity.

Sweden

New Zealand

Ireland

Belgium

China

Czech Republic

Definitions

Iceland (2004)

Netherlands

United Kingdom

Spain 0

2

4

6

8

Source: OECD, Innovation microdata project based on CIS-2006, June 2009 and national data sources. See chapter notes.

10 %

Expenditure on innovation includes total expenditure incurred by firms for the following activities: intramural R&D; extramural R&D; acquisition of other external knowledge (e.g. patents, licences, trademarks); and acquisition of machinery, equipment and software. SMEs are firms with fewer than 250 employees. Public support to innovation includes financial support via tax credits, grants and loans. New–to-market product innovations are new or significantly improved goods or services introduced to the firm’s market before its competitors, while new-to-firm product innovations are goods and services already available on the market.

1 2 http://dx.doi.org/10.1787/835838585236

78


Firms investing in innovation – Investing in innovation • 4.2 Firms receiving public support for innovation, by size, 2004-06 As a percentage of innovating firms Large firms

SMEs

% 80 60 40 20

-0

-0

02

06 So

uth

Au

Af

s tr

ric

ali

a(

a(

20

20

Es

02 20 d(

4)

7)

ia ton

-0

ga

rtu lan

Ice

Cz

Ja

pa

4)

l

il e

hR

Po

ep

Ch

ub

ou

ec

Lu

n(

li c

rg

y

mb

xe

Ge

-2

rm

00

an

1)

ina 19

99

Be

lgi

Ch

um

a in

Sp

ia

str Au

Ita Ko ly r ma ea ( nu 200 fac 5tur 07 ing , ) Ne the r la nd s

Ca

na ma da ( nu 200 fac 2tur 04 ing , )

0


Firms’ turnover from product innovation, by type of innovator, 2006 As a percentage of total turnover New-to-market

New-to-firm

% 25 20 15 10 5

ing

do

m

ay rw

ite

dK

No Un

) 04

lan

d(

20

ing

Ca

na

da

(2

00

So

4,

Ice

ma

nu

fac

De

tur

nm

nd rla

the

)

ark

s

l ga

rtu

Ne

Po

ly

Ita

um lgi Be

mb

Lu

xe

20

a( ric u th

Af

ou

05

rg

)

ina Ch

d

lan Ire

ia

str Au

ia ton

Es

a in

Sp

d

Fin lan

ma Kor nu ea ( fac 20 tur 08 ing , ) Ge rm an Cz y ec hR ep ub li c Sw ed en

0


Measurability The Oslo Manual (OECD and Eurostat, 2005) provides a framework for countries to develop internationally comparable innovation surveys. These surveys collect information on the characteristics of firms that innovate, but much of it is qualitative or based on binary/ordinal scales and measurement challenges remain, such as collecting reliable data on innovation expenditure. Firms may not always be able to distinguish the innovation component of certain expenditures or to report reliable figures for some (non-R&D) activities. The CIS provides a common framework, but national surveys are not always fully comparable, and some important differences remain between the CIS and innovation surveys outside Europe in terms of methodology, scope and data collected. For example, in the CIS expenditures only refer to product and process innovations, while in other surveys, they can include a broader range of activities. The OECD works to improve harmonisation between surveys as well as to develop new policy-relevant indicators using firm-level data from innovation surveys (OECD [2009a], Innovation in Firms: A Microeconomic Perspective). Data linkages with administrative databases or with earlier waves of innovation surveys will be needed to better measure the impact of innovation activities.


79

4.3 • Investing in innovation – Government funding R&D Governments perform in-house R&D and also finance R&D in various sectors of the economy. They play many roles in the innovation system, such as providing education, training and skills development, fostering knowledge creation and diffusion, and supporting the R&D efforts of firms.

Government budget appropriations or outlays for R&D, 2007

Did you know?

As a percentage of total government outlays

OECD countries’ stimulus packages for science, R&D and innovation ranged from 0.1% to 0.3% of GDP.

2004

(OECD, Policy Response to the Economic Crisis: Investing in Innovation and Long-Term Growth, 2009.)

Spain United States Korea

Governments invest in R&D for different purposes (national defence, environment, health, etc.). These are usually projects with high social impact but low short-term economic impact or large scientific projects that are too expensive and risky for privatesector investment alone (e.g. space research).

Finland Canada (2004-06) France

In 2007, OECD central governments invested 1% to 7% of their total budget in R&D activities. Spain had the largest increase in the last few years, with more than 7% of total central government outlays for R&D funding.

Sweden Iceland Netherlands

Countries vary widely in terms of the importance of funding by socioeconomic objective and by performance sectors. These differences reflect national priorities and differences in countries’ national innovation systems. For instance, Poland’s high share of public funding to public research organisations and Israel’s high share of public funding to the business sector reflect the particularities of each national innovation system.

Portugal Austria Italy (2005-08) Norway Slovenia Czech Republic Germany Denmark

Definitions

United Kingdom Ireland Poland Luxembourg Belgium Hungary (2005-08) Slovak Republic Greece 0

1

2

3

4

5

6

7

Source: OECD, Research & Development Database, December 2009; OECD Annual National Accounts Database, March 2010. See chapter notes.

8 %

Government budget appropriations or outlays for R&D (GBAORD) are the funds committed by the federal/central government for R&D. It can be broken down by sectors of performance (business enterprise, government, higher education and private non-profit) and by socioeconomic objectives (the main ones are shown on the facing page). Total government outlays are current outlays (e.g. current consumption, transfer payments, subsidies) and capital outlays. Data refer to the central/federal government only to be consistent with the definition of GBAORD. For countries which include regional and local R&D expenditures in their GBAORD estimates (Belgium, Denmark, Germany, Ireland and United Kingdom), total government outlays include the sub-national aggregates. General university funds (GUF) is the estimated R&D content of government block grants to universities (Frascati Manual, 2002).

1 2 http://dx.doi.org/10.1787/835870280132

80


Government funding R&D – Investing in innovation • 4.3 Government budget appropriations or outlays for R&D, by selected socio-economic objectives, 2008 Defence

Economic development

Health and environment

Non-oriented

General University Funds

Other

% 100 80 60 40 20

Un

ite d OE Stat es CD (2 00 7) Un ite Fran dK c ing e do m Ko rea Sp a in EU 2 Sw 7 ed en Au str ali a Ge rm an y Ja pa n Slo N va orw ay kR ep Ca ub na li c da (2 00 7) Po lan d Fin Cz ec h R land ep Ne ubli c the rla nd s Gr Ita ee l ce y (2 00 7) Sw H itz erl ung a an d ( ry 20 0 De 6) nm a Po rk rtu g Be al lgi um Au str ia Ice lan d Ire l Lu xe and Me mbo u x ic o ( rg Ne 200 6 w Ze ) ala nd

0

Source: OECD, Research & Development Database, December 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/835870280132

Government budget appropriations or outlays for R&D, by national sector of performance, 2008 Higher education

% 100

Government

Business

Private non-profit

80 60 40 20

rea

ub ep

Cz

ec

hR

Ko

li c

l

ae Isr

y an

rm Ge

d lan

Po

a

ali str Au

um lgi Be

ay rw

No

da na

Ca

s nd r la

the

lan

d

Ne

w

Ne

Ire

nd ala Ze

(2 ia

st r

Au

Sw

it z

erl

00

an

d

5)

0

Note: This is an experimental indicator. International comparability is currently limited. Source: OECD, based on preliminary data from the Microdata project on public R&D funding, 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/835870280132

Measurability GBAORD (government budget appropriations or outlays for R&D) represents the funds committed for R&D by the federal/central government to be carried out by business enterprise, government, higher education and private non-profit organisations at home or abroad (including international organisations). The data are usually based on budgetary sources and reflect the views of the funding agencies. They are generally considered less internationally comparable than performer-reported data, but they are more timely and reflect current government priorities, as expressed in the breakdown by socioeconomic objectives. The OECD project on modes of public R&D funding is currently developing new indicators based on the type of instrument (academic, innovation and policy, or thematic instruments) or funding agencies (line ministry, independent agency, etc.). The indicators are still experimental, but NESTI (OECD Working Party of National Experts in Science and Technology Indicators) is working to develop methodological guidelines for refining and institutionalising their collection.


81

4.4 • Investing in innovation – Higher education and basic research Most basic research is performed in universities and in public research organisations. Public support for such research remains crucial. It is essential for developing new scientific and technological knowledge and the human capital that can lead to innovation to benefit the economy and society.

Higher education expenditure on R&D, 2008

Did you know?

As a percentage of GDP

On average, more than three-quarters of all basic research in the OECD is performed by governments and universities.

1998

(OECD, Research & Development Database, 2009.)

Sweden (1999-2008) Switzerland Denmark

University spending on R&D accounts for 0.40% of GDP in the OECD area, a share that has increased in most countries over the last decade. This shows the growing importance of universities as providers of useful new knowledge and as trainers of the researchers and other highly skilled workers on which knowledge-based economies rely. In most countries, university basic research accounts for 40% to 70% of all basic research performed in the country.

Iceland Finland Canada Austria Israel Singapore Australia (1998-2006) Netherlands

Governments rely on two main modes of direct R&D funding: institutional and project-based. Institutional funding can help ensure stable long-run funding of research, while project-based funding can promote competition within the research system and target strategic areas.

Norway (1999-2008) Portugal United Kingdom Japan (1998-2007) Germany EU27

A new indicator has been developed on modes of public funding to the higher education sector (see right-hand page). Government R&D funding modes vary widely and reflect the institutional settings of countries’ research systems. In Germany, Israel and New Zealand, institutional funding is the principal mode, while Belgium and Korea rely mainly on project funding. The mix of funding modes can only be changed over the longer run through reforms of the research system.

Belgium France OECD Ireland Italy Korea New Zealand (1999-2007) Spain United States Turkey Greece (1999-2007) Czech Republic Hungary Slovenia Poland

Definitions

South Africa (2001-07) Romania Argentina (1998-2007) China (1998-2007) Slovak Republic Mexico (1998-2007) Russian Federation Luxembourg (2001-08) 0.0

0.2

0.4

0.6

0.8

1.0 %

Source: OECD, Main Science and Technology Indicators Database, March 2010. See chapter notes.

Project funding is defined as funding attributed on the basis of a project submission to a group or individuals for an R&D activity that is limited in scope, budget and time. Institutional funding is defined as the general funding of institutions with no direct selection of R&D projects or programmes. Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundation of phenomena and observable facts, without any particular application or use in view. The public sector comprises the government and highereducation sectors.

1 2 http://dx.doi.org/10.1787/836005248761

82


Higher education and basic research – Investing in innovation • 4.4 Government funded R&D in higher education, by type of funding, 2008 Government funded institutional-based

Government funded project-based

% 100 80 60 40 20

rea Ko

um lgi Be

a

ali str Au

d

lan

na

Ca

Ire

da

li c

Cz

ec

hR

ep

Po

ub

lan

d

ay No

an erl

Sw

it z

rw

d

s rla the Ne

(2 ia

st r

Au

Ze

w

Ne

nd

5) 00

nd ala

an

rm Ge

Isr

ae

l

y

0

Note: This is an experimental indicator. International comparability is currently limited. Source: OECD, based on preliminary data from the Microdata project on public R&D funding, 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/836005248761

Basic research performed in the public sector, 2007 As a percentage of national basic research

% 100

Higher education

Government

80 60 40 20

De

nm

No r ark wa y (2 00 5) Ice lan d Po rtu ga Au l str ia Fra Cy n p ce ru Sw s itz erl (200 an d ( 2) Es to n 2004 ) ia (2 00 2) Sp a in Ire I lan sra e l d( Me 2 x ic 006 ) o( 2 Ita 003 Au ly (2 ) str 00 ali 6) a Un (200 ite 6 dS ) tat es Sin g Ne apo r w Ze e ala nd Po lan So d u th C Af ric hina a( 20 06 Slo Hun ) ga va kR ry ep ub li c Ar ge nti na Ja pa n S l Cz o v ec e n hR ia ep ub Ch l i ile c (2 00 4 ) Ro ma nia Ru ss Ko ian rea Fe de rat ion

0

Source: OECD, Research & Development Database, December 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/836005248761

Measurability Data on R&D in higher education can be broken down by field of science (natural sciences, engineering, medical sciences, agricultural sciences, social sciences and humanities), by type of costs (current expenditures, capital expenditures), and by source of funds (business enterprise, government, higher education, private non-profit and funds from abroad). Measures of R&D performance in the higher education sector are often estimates by national authorities and evaluation methods are periodically revised. It is necessary to review the design and conduct of higher education R&D surveys to improve the comparability of these indicators. Project-based funding to higher education includes R&D national contracts from line ministries or government contributions to national funding agencies (e.g. research councils). Institution-based funding to higher education includes general university funds (GUF) and other institutional funds. The OECD project on modes of public funding of R&D is developing new indicators by exploiting existing budget data. The project demonstrates the feasibility of collecting these experimental indicators. NESTI (OECD Working Party on National Experts in Science and Technology Indicators) is working to develop methodological guidelines for refining and institutionalising their collection.


83

4.5 • Investing in innovation – Information and communication technologies Investment in information and communication technology (ICT) is important for a country’s economic growth. At the firm level, it provides an essential platform for changing organisational methods and introducing new products and processes.

ICT investment, by asset in OECD countries, 2008

Did you know?

As a percentage of non-residential gross fixed capital formation, total economy IT equipment Software

Software accounts for 10% of total investment in the OECD area . (OECD Science, Technology and Industry Scoreboard 2009.)

Communication equipment

ICT has the potential to increase innovation by speeding up the diffusion of information, favouring networking among firms, reducing geographic limitations and increasing efficiency in communication.

United States Sweden (2006) Denmark (2007)

Most national studies show the positive impact of ICT investment on GDP growth, but OECD countries continue to differ markedly in this respect. ICT represents around 25% of total fixed nonresidential investment in Denmark, Sweden and the United States but around 10% or less in Ireland, Italy and Greece.

United Kingdom (2007) New Zealand Finland (2005)

New OECD analysis at firm level shows that ICT enables innovation. The probability to innovate increases with the intensity of ICT use. This is true for both manufacturing and service firms and for different types of innovation, although here too countries differ. Further analysis is needed to assess whether these differences are due to national factors or to statistical differences in the measurement of innovation and ICT use.

Switzerland (2006) Belgium (2004) Netherlands (2007) Canada France Spain Germany Australia (2007) Japan (2007) Portugal (2005)

Definitions

Austria (2007) Korea (2005) Greece (2004) Italy Ireland (2007) 0

5

10

15

20

Source: OECD, Productivity Database, April 2010; www.oecd.org/statistics/productivity. See chapter notes.

25

30 %

Expenditure on ICT products is considered investment only if the products can be physically isolated. (e.g. ICT embodied in equipment is not considered investment). ICT use is measured by two variables: number of website facilities for e-commerce (i.e. to sell to customers) and number of automatic links for e-business (i.e. to buy from and sell to other firms). The figures report the largest effect linked to ICT use (number of website facilities for e-commerce and automatic links for e-business). Missing bars indicate that the effect of ICT is not statistically significant. Other factors that may affect the probability to innovate (firm size, R&D and skills) are controlled for by the econometric technique used.

1 2 http://dx.doi.org/10.1787/836006258516

84


Information and communication technologies – Investing in innovation • 4.5 Increase in the probability to innovate linked to ICT use, manufacturing, 2006 Product innovation

Process innovation

Organisational innovation

Marketing innovation

% 100 80 60 40 20

m

)

do

08

ing

20

dK

ite

erl itz Sw

Un

an

d(

No

Sp

rw

a in

ay

s

Lu

Ne

xe

the

mb

rla

ou

nd

rg

4) 00

(2 ly

Ca

na

Ita

da

(2

00

7)

0

How to read this figure Canadian manufacturing firms with high ICT use (large number of website facilities for e commerce) are 31% more likely to introduce a product innovation, 24% more likely to introduce an organisational innovation and 29% more likely to introduce a marketing innovation than those not using ICT (website facilities). ICT use does not have any impact on probability of introducing process innovation for Canadian manufacturing firms. Source: OECD, Microdata project on ICT-enabled innovation, 2010. See chapter notes. 1 2 http://dx.doi.org/10.1787/836006258516

Increase in the probability to innovate linked to ICT use, services, 2006 Product innovation

Process innovation

Organisational innovation

Marketing innovation

% 100 80 60 40 20

m

)

itz Sw

ing dK

ite Un

an

d(

20

do

08

a in

ay rw

Sp

erl

the Ne

No

s

nd rla

ou mb

xe Lu

Ita

ly

(2

00

rg

4)

0

Source: OECD, Microdata project on ICT-enabled innovation, 2010. See chapter notes. 1 2 http://dx.doi.org/10.1787/836006258516

Measurability Correct measurement of investment in ICT in both nominal and volume terms is crucial for estimating the contribution of ICT to economic growth and performance. Data availability and measurement of ICT investment based on national accounts (SNA 93) vary considerably across OECD countries, especially for investment in software, deflators applied, breakdown by institutional sector and temporal coverage. In the national accounts, expenditure on ICT products is considered investment only if these can be physically isolated (ICT embodied in equipment is considered not investment but intermediate consumption). Thus, ICT investment may be underestimated, depending on how intermediate consumption and investment are treated in a country’s accounts. A new OECD project analyses the effect of ICT use on probability to innovate. It is based on firm-level data from ICT business surveys and innovation surveys in eight OECD countries. Results for a larger set of countries are expected.


85

4.6 • Investing in innovation – Firms and smart infrastructure Today, high-speed broadband networks support innovation throughout the economy much as electricity and transport networks spurred innovation in the past. Innovations such as smart electrical grids, tele-medicine, intelligent transport networks, interactive learning and cloud computing will require fast communication networks to operate efficiently.

OECD broadband subscribers per 100 inhabitants, by technology, June 2009 DSL

Cable

Fibre/LAN

Did you know? The transformation of the newspaper, music and video industries indicates how broadband has become the leading delivery system for a wide range of content.

Other

Netherlands

(OECD, Broadband Statistics, 2009.)

Denmark Norway

High-speed broadband access has changed personal and business practices dramatically. It has enabled broader participation in the innovation process by opening it beyond customers, suppliers, competitors, government laboratories and universities to consumers. It has transformed some sectors by making outsourcing and off-shoring more efficient.

Switzerland Korea Iceland Sweden Luxembourg

Statistics show that future growth in super-fast broadband is likely to come from fibre-optic networks rather than DSL or cable. Nearly one in ten OECD subscribers currently accesses the Internet over fibre. In Japan and Korea, most access Internet over fibre. Fibre connections are growing fast in Denmark, Norway, Sweden and the United States.

Finland Canada Germany France United Kingdom

One way to trace the evolution of market broadband prices is to take a representative offer and follow over time its characteristics, such as price, advertised speed and data allowance. From 2005 to 2009, prices generally declined while speeds increased in many OECD countries.

Belgium United States Australia Japan New Zealand Austria Ireland Spain Italy Czech Republic Portugal Greece

OECD average

Definitions

Hungary Slovak Republic Poland Turkey Mexico 0

10

20

Source: OECD, Broadband Statistics, June 2009; www.oecd.org/sti/ict/broadband.

30

40

Broadband includes all subscriptions to DSL lines, cable modem, fibre-to-the-premises (e.g. house, apartment) and fibre-to-the-building subscribers (e.g. apartment LAN) which are capable of download speeds of at least 256 kbit/s. Other includes fixed wireless technologies (satellite, LMDS, MMDS, WiMAX [fixed] and other fixedwireless transport technologies) with speeds faster than 256 kbit/s to end users. It does not include 3G mobile technologies and Wi-Fi.

1 2 http://dx.doi.org/10.1787/836026204506

86


Firms and smart infrastructure – Investing in innovation • 4.6 Evolution of a representative DSL broadband subscription over time, 2005-09 Price (%)

10

5 Germany Canada 0

United Kingdom

Korea Luxembourg

Sweden Japan United States Spain France Iceland Austria Finland Mexico Australia

-5

-10

Norway

Netherlands Italy

Belgium Greece

Ireland

-15

Switzerland

Denmark Poland

-20

New Zealand

Portugal Slovak Republic

-25 Hungary Turkey -30

-35

Czech Republic

-40 0

10

20

30

40

50

60

70

80

90

100 Speed (%)

How to read this figure The speed of the Czech DSL offer increased by almost 70% and its price fell by over 35% during the period. Source: OECD, Broadband Statistics, December 2009; www.oecd.org/sti/ict/broadband. See chapter notes. 1 2 http://dx.doi.org/10.1787/836026204506

Measurability The two leading technologies currently used to provide high-speed Internet access are digital subscriber lines (DSL) and cable modem. Other broadband access technologies include fibre-optic lines installed to users’ homes or to their buildings. Fixed wireless connections and satellite are also available but represent less than 2% of all broadband subscriptions. The data for broadband subscribers include business and residential connections. Broadband delivered over mobile networks is not included but will continue to evolve as an important platform for connectivity and innovation. The OECD has developed a new measure of wireless broadband connectivity which will help policy makers follow growth in this segment.


87

4.7 • Investing in innovation – Governments and smart infrastructure Fostering innovation in the public sector at all levels of government enhances the delivery of public services, improves efficiency, coverage and equity, and creates positive externalities in the rest of the economy.

E-government readiness index, 2008

Did you know? 380 million people used e-voting machines in India during the 2004 legislative elections.

Sweden Denmark

(United Nations Development Programme, 2004.)

Norway United States

A high level of readiness to develop and implement e-government services is a prerequisite for a highperforming, innovative public sector which delivers integrated services for citizens and businesses. E-government readiness is a significant indicator of how prepared a country is to use ICT-enabled public administrations for greater efficiency.

Netherlands Korea Canada Australia France United Kingdom

OECD countries’ capacity to develop and implement e-government services is generally based on an extensive broadband infrastructure; a repository of electronic information on government laws and policies, including links to archived information and downloadable forms; and a high level of familiarity with ICT among citizens and businesses.

Japan Switzerland Luxembourg Finland Austria

Scandinavian countries lead on the readiness index and generally share similar e-government environments (e.g. accessibility and penetration of the electronic infrastructure) and strategies (e.g. online provision of services).

New Zealand OECD Ireland Spain Iceland

As Internet access is a prerequisite for using e-government services, it is a leading indicator of countries’ readiness to harness the potential efficiencies of ICT. One driver for uptake is the penetration of broadband infrastructure in society. The data indicate a strong correlation between the penetration of broadband and the use of e-government services by citizens.

Germany Belgium Czech Republic Italy Hungary Portugal Poland Mexico

Definitions

Slovak Republic

The e-government readiness composite index is created by the United Nations and measures the capacity of governments to develop and implement e-government services. The index ranges from 0 (low level of readiness) to 1 (high level). Developed for the UN global e-government survey, the indicator has three sub-indices: web measure, telecommunication infrastructure and human capital.

Greece Brazil Russian Federation South Africa China Turkey Indonesia India 0.0

0.2

0.4

0.6

0.8

1.0 Index

Source: UN (2008), UN e-Government Survey 2008, From e-Government to Connected Governance, UN, New York.

The e-government take-up by citizens indicator measures the percentage of individuals (aged 16-74) who used the Internet to interact with public authorities in the three months preceding the Eurostat’s annual Community Survey on ICT Usage.

1 2 http://dx.doi.org/10.1787/836040668574

88


Governments and smart infrastructure – Investing in innovation • 4.7 Relation between broadband penetration and citizen uptake of e-government services, 2008 E-government uptake for individuals: percentage using e-government services (%)

70

Norway 60

Iceland Netherlands

Finland Sweden

50

Luxembourg France

Denmark

Austria

40

OECD 22 Slovak Republic

30

Germany United Kingdom

Spain Hungary

Turkey

20

Ireland

Portugal Poland

Czech Republic

Italy

Belgium

10 Greece

0

0

10

20

30

40

50 Broadband penetration rate: subscriptions per 100 inhabitants (%)

Source: OECD (2009d), Government at a Glance 2009, OECD, Paris. See chapter notes. 1 2 http://dx.doi.org/10.1787/836040668574

Measurability OECD countries are transforming government through the use of ICT and ICT-enabled governance structures, new collaboration models (i.e. sharing data, processes and portals), and networked or joined up administrations. Transformation of the public sector and e-government are increasingly seen as closely linked policy areas. OECD e-government studies have shown that ICT is increasingly used to support broader public sector efforts to create a more coherent, user-focused and efficient public sector. ICT can change service delivery approaches by creating personalised, high-quality services, thereby increasing user satisfaction and effective service delivery. It facilitates major changes in work organisation and management through back-office coherence and greater efficiency. It increases the transparency of government activities as well as citizen engagement. However, there is little empirical evidence on these effects. Traditionally, measurement has been limited to input and output indicators, which do not properly capture transformation processes and the outcomes of transformation. To fill this gap, the OECD Directorate for Public Governance and Territorial Development reviewed existing e-government performance indicators. The results of OECD (2009d), Government at a Glance 2009, combined with lessons learned from numerous e-government reviews, today form the basis for developing valid and reliable performance indicators mainly focused on service delivery (e.g. user take-up and satisfaction, administrative simplification) and organisational indicators (e.g. lower administrative burdens, staff satisfaction and skill levels).


89

4.8 • GAP PAGE – Measuring innovation in the public sector Governments are important actors in the innovation process. Not only can they foster innovative activities by firms, they can also develop their own innovations in order to develop more efficient processes and enhance the quality and availability of public services. Even though internationally agreed concepts and metrics for measuring innovation exist for the private sector, there is not as yet a similar framework for the public sector.

Why do we need indicators ? Innovation is now perceived as encompassing the generation, adoption and diffusion of new ideas. A wide range of indicators have been progressively developed to measure the innovation activities of firms (based on the Oslo Manual) but little is known about public-sector innovation dynamics. Many studies have shown (sometimes contrary to public perceptions) that the public sector not only fosters innovation activities in firms but can also be a source of innovation. The public sector is an important economic actor, accounting for between one-third and over one-half of GDP in most OECD countries. Innovation is a key tool for achieving its multiple goals (increasing welfare, improving the quality of life of its citizens, ensuring a stable, fair and predictable environment for economic activities) and for addressing global challenges (e.g. health, poverty, climate change, food security). Recent drivers behind innovation in the public sector include rising costs in today’s constrained budgetary environment, demand for services due to demographic changes, ongoing pressures to contain costs and improve efficiency, growing demand for accountability, and the need to improve the quality and availability of public services (including education and health). Measurement efforts should focus not only on monitoring efficiency and costs, but also on providing a broad set of indicators that can shed light on innovation processes in public sector organisations and show how these can help governments meet their goals.

Total expenditure of general government, 2008 As a percentage of GDP

% 70 60 50 40 30 20 10

7)

d

00

rea

(2

li c

an

erl

it z

Sw

Ko

a

kR

ep

ub

)

ali str

Au

va

Slo

rg

07

20

ou

Ja

pa

n(

es

mb

Lu

xe

da

Un

ite

dS

tat

ay rw

na

Ca

No

d

a in

Sp

nd

Ire

ala Ze

w

Ne

lan

li c

d

ec

hR

ep

ub

y

lan

an

Po

Cz

Ge

rm

l

s

nd

ga Ne

the

rla

ce

rtu

Po

Gr

ee

m

ly

do

Ita

ing

Un

ite

dK

lgi um Fin lan d Hu ng ary Au str ia

Be

e

ark

d

nc

nm

Fra

De

ed

lan

Sw

Ice

en

0

Source: OECD, National Accounts Database, April 2010. 1 2 http://dx.doi.org/10.1787/836075508855

What are the challenges? Despite the existence of a framework to measure innovation in firms and years of experience in collecting such data (in Europe through the Community Innovation Survey – CIS), challenges relating to the measurement of public-sector innovation are multiple and non-trivial. The first is the scope of what is measured: What should be the target population (general government, public sector, public enterprises)? Which types of activities/domains should be included? What are the appropriate statistical units? Second is how to measure public-sector innovation, and, more specifically, the extent to which the Oslo Manual framework, including its definitions and concepts (types, activities, linkages, drivers, objectives, outcomes/impacts, barriers), can be used or adapted. Are the basic concepts and tools relevant to the characteristics of the public sector, in particular its multiple objectives, its complexity and heterogeneity, and its organisational and incentive structures? Can surveys be harmonised across countries given the large differences in the way that public-sector activities are organised across government levels in each country and in the scope of public services?

90


Measuring innovation in the public sector – GAP PAGE • 4.8 What types of indicators are needed? A set of “core” measures across all government activities? A more focused (sectoral) approach? Or both? Before developing large-scale surveys, it is necessary to consider who would be the appropriate respondents for different types of surveys. What should the periodicity be? To what extent can information (e.g. expenditure data) be extracted from existing administrative sources? Ongoing efforts by many national statistical offices to better measure output and productivity in the public sector will also affect the work on public-sector innovation.

Options for international action Despite the lack of an overall framework, work in this area can build on existing tools for measuring firm innovation and on studies that measure the quality of public services. Various projects are under way both at the OECD and elsewhere to develop a conceptual framework and metrics for public-sector innovation. The OECD’s Working Party of National Experts on Science and Technology Indicators (NESTI) launched a task force in 2009 to examine whether measurement guidelines could be developed. The task force will be preparing a scoping paper in 2010 with measurement priorities and proposals for building a framework. In addition to publishing a large set of indicators on public sector activities (OECD [2009d], Government at a Glance 2009), the OECD’s Public Governance and Territorial Development Directorate is undertaking various projects relating to measuring innovation in the public sector including: • collecting data on the use of co-production in service delivery; • developing new indicators on the quality of public services ; • measuring the adoption of new public management practices; and • expanding data collection on the characteristics of the public-sector workforce. The OECD Centre for Educational Research and Innovation (CERI) has launched work on measuring innovation in education. Among the options being considered are an adaptation of the Oslo Manual concepts to education and the use of various types of tools to measure changes in administrative and pedagogical practices (e.g. new CIS-type surveys, employer/employee surveys, extension of existing educational surveys). Five Nordic countries have launched an initiative to develop a framework for measuring public-sector innovation which includes the testing of a pilot survey during 2010. OECD efforts will build on this work and on initiatives such as various studies in the United Kingdom (NHS/ Department of Health, National Audit Office, NESTA, Audit Commission) and earlier work in Korea (Government Innovation Index).


91

4.9 • GAP PAGE – Multilevel governance of innovation There are major gaps in our understanding of investments to support innovation and related responsibilities at different levels of government and of the mechanisms for managing this shared innovation policy competence. The OECD is working to develop indicators in this area.

Why do we need indicators ? Sub-national governments are active investors. On average, the sub-national level accounts for 64% of an OECD country’s public investment. However, data are lacking at sub-national level on innovation investments and programmes. It is important to capture this regional dimension because regions generally play an active role in innovation policy. They engage public and private actors in networks based on regional characteristics and strengths, and they invest in support for these networks. These efforts lead to positive spillovers. The level of sub-national spending on innovation can be significant. In Germany, just over 50% of public R&D is managed by sub-national governments (2006). Of public R&D and innovation spending by Spain and its regions, approximately 20% of the 10 billion EUR comes from the regional governments (2007). In some cases there may be up to four levels of government involved in innovation policy. The policy issue is to manage the overlaps and gaps and to ensure synergies in the inevitable competence-sharing arrangements. To understand these interdependencies, it is necessary to know: • who does what; • what the key co-ordination challenges are; and • how different levels can work together better. There is also a major gap in understanding regions’ innovation policy portfolios. There have been evaluations of individual instruments, but they do not give a sense of the size and orientation of the overall policy portfolio or of its relevance to the region’s needs. It is difficult to identify the incentives that ensure a coherent innovation policy across levels of government. Given a country’s responsibility-sharing arrangements, there are several possible co-ordination mechanisms. They include ongoing dialogue, formal consultation processes, agencies for regional development or regional innovation, contracts, and different co-financing arrangements, among others.

Share of sub-national government in public investment, 2007 As a percentage of total public investment

% 100 80 60 40 20

rtu ga l Fin lan d Ko rea Po lan d I Slo ce lan va d kR ep ub li c Sw Un ed ite en dK ing do m No Cz rw ec ay hR ep ub Ne li c w Ze ala nd Hu ng Lu ary xe mb ou rg Gr ee ce

Po

s

ark

nd

nm

rla

the

De

ia

e

a in

Sp

Ne

str

Au

d

nc

Fra

n

Ire

lan

y an

pa Ja

rm

Ge

a

ly

ali

Ita

um

Au

str

es

Be

lgi

d

tat

Un

ite

dS

an

na

Ca

Sw

it z

erl

da

0

Source: OECD, National Accounts Database, February 2010. See chapter notes. 1 2 http://dx.doi.org/10.1787/836078386337

What are the challenges? No agreed categorisation of innovation policy instruments Some definitions, such as that of research and development (R&D), are generally accepted throughout OECD countries. While there exists a commonly accepted definition of innovation at the firm level, there is no agreed definition of innovation policy instruments. Some countries and regions use a broad policy approach, others a narrower one.

92


Multilevel governance of innovation – GAP PAGE • 4.9 Regional roles in innovation Various parameters make it difficult to codify the role of regions in a given country, let alone across countries. Even when taking into account different institutional structures (federal, centralised), the domestic allocation of competences for innovation is not always clear. Multi-level governance arrangements differ from one policy area to another and may differ from one region to another in the same country. Multi-level funding of innovation Funding for science, technology and innovation flows from various sources, such as sectoral ministries and various levels of government. What share of the funds from each funding source is spent in a region? Some national funding is regionalised. Regions may have their own budgets. For many countries there is also a supra-national level, such as the European Union, which has programmes to promote science, etchnology and innovation. Indicators at regional level Developing indicators to depict regional innovation policy portfolios is a task fraught with difficulties: the lack of comparable information at regional level, the huge diversity in approaches and scope of these policies, and the large number of entities to be covered. In the OECD area, there are 335 large sub-national regions. Attempts to quantify policy indicators at regional level are therefore more complex than at national level.

Options for international action Analyse the new OECD Survey on the Multi-level Level Governance of Science, Technology and Innovation A recent OECD Survey on the Multi-level Governance of Science, Technology and Innovation provides a first step in collecting data. It includes questions on role-sharing at different levels of government in innovation policy and on how governments co-ordinate policy levels. National and regional governments need to co-design and codeliver these policies effectively. Another pilot study at the OECD is exploring sub-national spending autonomy in policy fields such as education and transport. A survey can help to: Develop taxonomy of policy instruments for supporting regional innovation systems A classification of policy instruments considered part of innovation policy needs to be developed. While there may not yet be agreement on definitions, such a classification will at least make it possible to compare apples to apples across countries and regions. Develop indicators on regional competences in innovation policy Such indicators should capture the multi-dimensional role of regions in different aspects of science and technology (S&T) and innovation policy: setting strategy and objectives; policy development; financing; delivery/ implementation; and evaluation. There are currently no clear measures of regional roles in these policy fields, and no assessments of the relation between different areas of regional competences and the effectiveness of policy outcomes. Developing quantitative indicators on regional support to R&D and innovation The OECD and the EU are planning to create innovation policy indicators at national and regional level that can capture the intensity and direction of innovation policies beyond R&D support. Such indicators should also be developed to show the orientation of regional innovation policies. Databases on innovation policies for European regions exist at the national level and are being developed for the regional level, but for regions outside the European Union, the information needs to be obtained in a harmonised way through surveys or other sources. A quantitative indicator on regional innovation policy intensity is also needed. It should capture efforts made at the regional level to promote innovation. As a first step, regional data on GBAORD (Government budget appropriations or outlays for R&D) should be obtained. The main advantage of this indicator is that the data collected is harmonised. Its disadvantage is that it captures only one aspect of innovation policy.

References: OECD (2010), “Sub-Central Governments and the Economic Crisis: Impact and Policy Responses”, Economics Department Working Paper No. 752; OECD (2009e), Regions Matter: Economic Recovery, Innovation and Sustainable Growth; OECD (2009f), OECD Regions at a Glance 2009; OECD (2009g), Governing Regional Development Policy: The Use of Performance Indicators; OECD (2007a), Linking Regions and Central Governments: Contracts for Regional Development; OECD (2007b), Competitive Regional Clusters: National Policy Approaches.


93

4 • Investing in innovation – Notes


4.1 Firms investing in R&D Business enterprise expenditure on R&D, 2008 • Defence excluded (all or mostly) for Israel. • Excludes most or all capital expenditure for the United States. Direct and indirect government funding of business R&D and tax incentives for R&D, 2007 • The estimates of R&D tax expenditures do not cover sub-national R&D tax incentives. The Austrian estimate covers the refundable research premium but excludes other R&D allowances. The estimate for the United States covers the research tax credit but excludes the expensing of R&D. For Turkey, a calculation by The Scientific and Technological Research Council of Turkey indicates foregone tax revenue of 593 million Turkish liras (or 0.06% of GDP) in 2008. Italy and Greece offered R&D tax incentives in 2007, but estimates of the related foregone tax revenues are not yet available. Source: OECD, based on national estimates from the Working Party of National Experts in Science and Technology (NESTI) R&D tax incentives questionnaire, January 2010; and OECD, Main Science and Technology Indicators Database, December 2009. 4.2 Firms investing in innovation Expenditure on innovation, by firm size, 2006 Source: OECD, Working Party of National Experts in Science and Technology (NESTI) Innovation microdata project based on CIS-2006, June 2009, and national data sources. Firms receiving public support for innovation, by size, 2004-06 • The industries included are: Mining and quarrying; Manufacturing; Electricity, gas and water; Wholesale trade; Transport and storage; Communications; Financial intermediation; Computer and related activities; Architectural and engineering activities; and Technical testing and analysis. • For Australia (2006-07), Business Characteristics Survey 2006-07; Canada (2002-04, manufacturing), Survey of Innovation 2005; Iceland (2002-04), CIS-4; Japan (1999-2001), J-NIS 2003; Korea (2005-07, manufacturing), Korean Innovation Survey 2008; New Zealand (2006-07), Business Operations Survey 2007; South Africa (2002-04), South African Innovation Survey 2005. Source: OECD, Working Party of National Experts in Science and Technology (NESTI) Innovation microdata project based on CIS-2006, June 2009, and national data sources. Firms’ turnover from product innovation, by type of innovator, 2006 Source: OECD, Working Party of National Experts in Science and Technology (NESTI) Innovation microdata project based on CIS-2006, June 2009, and national data sources. 4.3 Government funding of R&D Government budget appropriations or outlays for R&D, 2007 • Total government outlays refers to central/federal government only, in order to be consistent with the definition of GBAORD. • For countries which also include regional and local R&D expenditures in their GBAORD estimates (Belgium, Denmark, Germany, Ireland and the United Kingdom), total government outlays refers to central/federal as well as regional and local government outlays.

94


Notes – Investing in innovation • 4 Government budget appropriations or outlays for R&D, by selected socio-economic objectives, 2008 • For Japan, military procurement contracts are excluded from defence in government budget appropriations or outlays for R&D (GBAORD). In the United States, general support for universities is the responsibility of state governments; therefore general university funds (GUF) is not included in total GBAORD. Government budget appropriations or outlays for R&D, by national sector of performance, 2008 Source: OECD, Working Party of National Experts in Science and Technology (NESTI) Project on public R&D funding, 2009. 4.4 Higher education and basic research Higher education expenditure on R&D, 2008 • Excluding R&D in the social sciences and humanities: Israel (1998 and 2008) and Korea (1998). • Excludes most or all capital expenditure for the United States. Government-funded R&D in higher education, by type of funding, 2008 Source: OECD, Working Party of National Experts in Science and Technology (NESTI) Project on public R&D funding, 2009. Basic research expenditure performed in the public sector, 2007 • Total cost (current and capital) included for all countries except Norway, Estonia, Poland, Spain, Russian Federation and the United States, for which only current costs are included. 4.5 Information and communication technologies ICT investment, by asset in OECD countries, 2008 • ICT equipment is defined as computer and office equipment and communication equipment; software includes both purchased and own account software. Software investment in Japan is likely to be underestimated, owing to methodological differences. Increase in the probability to innovate linked to ICT use, manufacturing, 2006 Source: OECD, Working Party on Indicators for the Information Society (WPIIS) Microdata project on ICT-enabled innovation, 2010. Increase in the probability of innovating linked to ICT use, services, 2006 Source: OECD, Working Party on Indicators for the Information Society (WPIIS) Microdata project on ICT-enabled innovation, 2010. 4.6 Firms and smart infrastructure Evolution of a representative DSL broadband subscription over time, 2005-09 • Speeds are those advertised by operators and likely do not correspond to typical throughput. • See the OECD Broadband Portal for more details on the broadband pricing collection, www.oecd.org/sti/ict/broadband/prices. 4.7 Governments and smart infrastructure Relation between broadband penetration and citizen uptake of e-government services, 2008 • Data are provided for 22 OECD member countries monitored by the European Commission. The following OECD member countries are not included in the European Commission data: Australia, Canada, Japan, Korea, Mexico, New Zealand, Switzerland and the United States. 4.9 Gap page – Multi-level governance of innovation Share of sub-national government in public investment, 2007 • This figure uses gross fixed capital formation as the measure of public investment.


95

4 • Investing in innovation – References

References OECD (2002), Frascati Manual 2002: Proposed Standard Practice for Surveys on Research and Experimental Development, OECD, Paris. OECD (2007a), Linking Regions and Central Governments: Contracts for Regional Development, OECD, Paris. OECD (2007b), Competitive Regional Clusters: National Policy Approaches, OECD Reviews of Regional Innovation, OECD, Paris. OECD (2009a), Innovation in Firms: A Microeconomic Perspective, OECD, Paris. OECD (2009b), Policy Response to the Economic Crisis: Investing in Innovation and Long-Term Growth, OECD, Paris. OECD (2009c), OECD Science, Technology and Industry Scoreboard 2009, OECD, Paris. OECD (2009d), Government at a Glance 2009, OECD, Paris. OECD (2009e), Regions Matter: Economic Recovery, Innovation and Sustainable Growth, OECD, Paris. OECD (2009f), OECD Regions at a Glance 2009, OECD, Paris. OECD (2009g), Governing Regional Development Policy: The Use of Performance Indicators, OECD, Paris. OECD (2010), “Sub-Central Governments and the Economic Crisis: Impact and Policy Responses”, Economics Department Working Paper, No. 752, OECD, Paris. OECD and Eurostat (2005), Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data, 3rd edition, OECD, Paris. United Nations (2008), United Nations e-Government Survey 2008: From e-Governance to Connected Governance, New York.

96


Chapter 5 Reaping returns from innovation In an economy increasingly based on knowledge and innovation, the development of fully functioning knowledge networks and markets can have a significant impact on the efficiency and effectiveness of the innovation effort. Knowledge linkages and diffusion are hard to measure. Citation analysis is one way to capture science and industry linkages. For example, a new indicator is developed here using “green” innovations as the unit of analysis. Who is capturing the returns to innovation? New ways of looking at traditional indicators (for example, patent granted instead of filed or foreign ownership of inventions) can shed some light on this, although it is clear that developing metrics of knowledge “networks”, as well as of markets for knowledge is still uncharted territory.

5.1 • Scientific collaboration......................................................................... 98 5.2 • Science and industry linkages........................................................... 100 5.3 • Knowledge clusters............................................................................. 102 5.4 • Commercialisation............................................................................. 104 5.5 • Knowledge circulation........................................................................ 106


97

5.1 • Reaping returns from innovation – Scientific collaboration Collaboration is important for innovation at all stages of knowledge production. The increasing specialisation of scientific disciplines and the increasing complexity of research encourage scientists to engage in collaborative research.

Scientific articles, by type of collaboration, 2008

Did you know?

Per capita

37% of all scientific articles published in the last decade have not been cited.

International co-authorship Domestic co-authorship Single author

(Scopus, Elsevier, 2009.)

Switzerland

Co-authorship of scientific articles provides a direct measure of collaboration in science. National and international co-authorship is far more prevalent than single authorship for all countries.

Sweden Iceland Finland

International collaboration varies with country size. Small countries are generally more likely to engage in international collaboration than larger ones. However, when the number of scientific articles is taken into account, Germany, the United Kingdom and the United States attract the most international collaborations.

Denmark Norway Australia Netherlands New Zealand Canada United Kingdom

Top-cited articles provide a measure of “quality‑adjusted” scientific output. This indicator reveals countries’ relative contribution to the pool of the top 1% of cited scientific knowledge. It clearly shows the premium from international scientific collaboration. For almost all countries, internationally co-authored articles are the most frequently included in the world’s most-cited publications. The exceptions are China, India and the United States, which have a large pool of national researchers.

Belgium Ireland Austria United States France Germany Greece Spain Czech Republic Italy Luxembourg Portugal Korea Japan

Magnified

Hungary Slovak Republic Poland Turkey Russian Federation Brazil China

Definitions

Mexico India 0.0

0

1

0.2

0.4

2

0.6

0.8

3

Source: OECD calculations, based on Scopus Custom Data, Elsevier, December 2009; and OECD (2009), OECD Factbook 2009: Economic, Environmental and Social Statistics, OECD, Paris.

4

Single authorship refers to scientific papers with a single author. Domestic co-authorship refers to scientific articles with two or more authors in the same country. International co-authorship refers to scientific articles with two or more authors from different countries. The classification is based on the number of addresses listed in each article. Top-cited articles are the 1% of scientific articles receiving the most citations for 2006-08.

1 2 http://dx.doi.org/10.1787/836087047406

98


Scientific collaboration – Reaping returns from innovation • 5.1 Highly cited (top 1%) scientific articles, by type of collaboration, 2006-08 As a percentage of highly cited scientific articles worldwide Single author

International co-authorship

Domestic co-authorship

48.8

% 25

20

5

Magnified

4 3

15

2 1

10

0

5

I the taly rla nd s Ja p Au an s Sw tral it z i a erl an d Sp a in Sw ed Be en lgi De um nm ark Ko rea Au str ia Ind i Fin a lan d Br Ru az i ss ian Nor l Fe wa y de rat ion Po lan d Tu rke Ire y lan d Ne Gree w ce Ze ala n Cz Por d ec h R tuga ep l ub Hu li c ng ar Me y xic o Slo I va cela kR nd e Lu pub xe l mb i c ou rg

Ne

ite

Un

Un

ite dS d K tate ing s d Ge om rm an y Fra nc Ca e na da Ch ina

0

Source: OECD calculations, based on Scopus Custom Data, Elsevier, December 2009. 1 2 http://dx.doi.org/10.1787/836087047406

Measurability The volume of scientific articles published worldwide is a key indicator as publication is the main means of disseminating and validating research results. Publication counts are based on science and engineering articles, notes and reviews published in a set of the world’s most influential scientific and technical journals. It excludes all documents for which the central purpose is not the presentation or discussion of scientific data, theory, methods, apparatus or experiments. Fields are determined by the classification of each journal. Publications are attributed to countries by the author’s institutional affiliation at the time of publication. Indicators of co-authorship are affected by language barriers and geographical factors. However, these obstacles have lessened as English has become the language most commonly used internationally by researchers. Physical distance between researchers is likely to have some correlation with the ratio of co‑authorship, although the effect of information and communication technologies on knowledge flows has undoubtedly lessened its effect. Because the incentive to publish raises a question of quality, articles can be weighted by the frequency of citations. Citations attest to the productivity and influence of scientific literature. A total of 35 594 highly cited articles, i.e. the top 1% of cited articles in the database for 2006-08, were identified and distributed by country and type of collaboration. Science and engineering include life science (clinical medicine, biomedical research and biology); physical science (chemistry, physics and Earth and space sciences); mathematics, social and behavioural sciences (social sciences, psychology, health sciences and professional fields). Finally engineering includes computer sciences and engineering and technology).


99

5.2 • Reaping returns from innovation – Science and industry linkages Public research has always been an important part of innovation systems and the source of significant scientific and technological breakthroughs. Effective linkages between public research institutions and industry are necessary to optimise the benefits from research.

Patents filed by public research organisations, 2000-07

Did you know?

As a percentage of patent applications filed under the PCT All patents

The Indian Council of Scientific and Industrial Research accounted for over 30% of all green patent applications by India between 2000 and 2007.

Green patents

(OECD, Patent Database, 2010.) Singapore India

Actors (business, non-profit organisations) can draw on the pool of available public research through different channels, one of which is commercialisation via patenting and licensing. Most patent applications are filed by the private sector. Public research organisations (PROs) usually file applications in specialised technological fields such as biotechnology but they also engage in research relating to green technologies (e.g. renewable energy and hybrid and electrical cars).

Ireland Spain United Kingdom Israel Canada France United States

Links between PROs and industry also occur through spin-offs, joint research projects, training, consultancy and contract work, staff mobility between workplaces and informal co-operation by researchers.

Belgium Australia Brazil

Citation analysis (the analysis of non-patent literature cited in patents) is a novel way to assess science and industry linkages. For example, an indicator is developed using “green” innovations (patents) as the unit of analysis. Results show that green innovations mostly draw on material science, chemistry and engineering. However, compared to the United States, green innovations patented by Japanese inventors are more likely to draw on scientific production in chemistry and physics, while in Germany they are more likely to be linked to the engineering and energy fields.

Mexico World total OECD Czech Republic Korea China Denmark Italy Japan EU27

Definitions

South Africa

Public research organisations (PROs) include government laboratories, universities and research hospitals. Data relate to patent applications filed under the Patent Co-operation Treaty (PCT), at international phase, designating the European Patent Office (EPO). The green patent category is a sub-sample of patents for pollution abatement and waste management and climate change mitigation technologies. For the classification of green patents, see www.oecd.org/environment/innovation/indicator.

Austria Switzerland New Zealand Netherlands Germany Hungary Russian Federation Norway Finland Sweden 0

5

10

15

20

25

30

Source: OECD, Patent Database, January 2010. See chapter notes.

35 %

The low share of patents filed by PROs in 2000-07 in some countries may be explained by a measure called the Teachers’ Exemption or “Professor privilege”, whereby academics own the intellectual property rights for their inventions. Over time this exemption has been removed, except in Sweden.

1 2 http://dx.doi.org/10.1787/836143718831

100


Science and industry linkages – Reaping returns from innovation • 5.2 Main scientific fields cited in “green” patents, by inventor country, 2000-07 As a percentage of all citations United States

% 20

Japan

Germany

Other countries

15 10 5

lec

r he

Ot

A & gric bio ult u sc logic re ien al ce s

mo

& Imm mi un cr ob olog iol y og y

gy

er En

he m ula gen istry r b eti , iol cs, og Ea y rth & pla sc neta ien ry ce s

Bi

oc

on m sc enta ien l ce

vir En

en Chem gin i ee cal rin g

En

gin

Ph

ee

ys

rin

g

ics

ry

ist em Ch

Ma sc teria ien ls ce

0


Environmental technologies draw on scientific knowledge that comes from material science (17%), from chemistry (14%), etc. The link to publications from material science (17%) originate from US patents (4%), from Japanese patents (2%), from German patents (3%), and the remaining 8% from all other countries. Source: OECD calculations, based on Scopus Custom Data, Elsevier, July 2009; OECD, Patent Database, January 2010; and EPO, Worldwide Patent Statistical Database, September 2009. 1 2 http://dx.doi.org/10.1787/836143718831

Relative citation rate in “green” patents, by main scientific fields, 2000-07 United States citation rate = 100 Japan

Germany

200 180 160 140 120 100 80 60 40 20 0

Other countries

A & gric bio ult u sc logic re ien al ce s

& Imm mi un cr ob olog iol y og y

gy

er En

pla sc neta ien ry ce s

& rth

En

vir

on m sc enta ien l ce Ea


en Chem gin i ee cal rin g

En

gin

ee

rin

g

ics

ys Ph

ry

ist em Ch

Ma sc teria ien ls ce

United States set at 100

Japanese and German green patents are respectively 63% and 17% more likely to cite scientific articles in the field of physics than US patents. Source: OECD calculations, based on Scopus Custom Data, Elsevier, July 2009; OECD, Patent Database, January 2010; and EPO, Worldwide Patent Statistical Database, September 2009. 1 2 http://dx.doi.org/10.1787/836143718831

Measurability A search algorithm developed by the OECD and the EPO is used to generate the list of environmental patent applications. Fields include: renewable energy; fuel cells and energy storage; alternative-fuelled vehicles; energy efficiency in the electricity, manufacturing and building sectors; and “clean” coal (including carbon capture and storage). The link between patents and the scientific literature is based on an analysis of the “non-patent literature” (NPL) listed in patent documents. NPL includes peer-reviewed scientific papers, conference proceedings, databases and other literature. The listed NPL gives journal title, author name(s), volume and page number, article title, but usually not information needed for bibliometric analysis (e.g. name and address of the author’s organisation, names of authors other than the first listed). To fill in information gaps, NPL was matched with Scopus, the scientific literature database. This makes it possible to know if the NPL is a scientific article and to obtain bibliographical information not recorded in NPL. The matches were based on combinations of volume, page, year, journal name, author name, and article title. As a result, 1 612 green patents were retained out of the 48 249, and 2 803 NPL were scientific papers recorded in Scopus.


101

5.3 • Reaping returns from innovation – Knowledge clusters While different forms of innovation activity may occur in all regions, R&D-based innovation is geographically concentrated. Industrial structure, research capabilities and other territorial characteristics affect the capacity of actors to generate and absorb knowledge. Governments increasingly focus on regional clusters of innovation.

R&D intensity, by region, 2007

Did you know?

Regional R&D expenditures as a percentage of regional GDP

Half of OECD R&D investment is performed in less than 13% of OECD regions.

Country average

(OECD, Regional Database, 2009.) United States

New Mexico

Finland

Pohjois-Suomi

Korea (2005)

Capital Region

Sweden

Sydsverige

France (2005)

Midi-Pyrénées

United Kingdom

Eastern

Germany

Baden-Württemberg

Austria

Steiermark

Australia (2005)

Capital Territory

Norway (2005)

Trøndelag

Czech Republic

Strední Cechy

Spain

Madrid

Netherlands (2005)

Zuid-Nederland

Canada (2006)

Québec

Portugal

Lisboa

Italy (2005)

Lazio

Hungary

Közép-Magyarország

Poland

Mazowieckie

Belgium

Région Wallonne

Slovak Republic

Bratislavský kraj

Greece (2005)

Attiki

Ireland

Border, Midlands and Western

0

1

2

3

4

5

6

7

OECD regions with high GDP per capita are generally also those with high R&D intensity. A key policy debate is whether it is better to concentrate resources in leading regions or to use innovation resources to trigger catch-up outside the leading regions. Countries with high R&D intensity often display large regional disparities. They are greatest in Finland, Korea, Sweden and the United States. Moreover, in Australia, Norway, the United Kingdom and the United States the R&D intensity of the leading region is at least twice the national average. The intensity of investment in a given region is affected by regional sectoral specialisation, the presence of research hubs of multi-national firms, and the location of public research labs and leading research universities. It may be partly influenced by regional actions and policies as well as national policies and global trends. Proximity is important for knowledge creation and technological progress. Domestic co-patenting is the most frequent mode of co-patenting in almost all countries. On average for OECD regions, it is slightly more frequent when the inventors are in the same region (39%), than when they are in different regions in the same country (35%) or in another country (19%).

Definitions Gross domestic expenditures on R&D is the total intramural expenditure on R&D performed in the sub-national territory (region) during a given period. Patent Co-operation Treaty (PCT) applications are regionalised according to the inventor’s residence. The same patent may be classified in more than one region if there are multiple co-inventors. 8 %

How to read this figure The most R&D-intensive region in Finland is Pohjois-Suomi with R&D intensity of 5.4%, above the country average (3.5%). Source: OECD, Regional Database, March 2010; OECD, Main Science and Technology Indicators Database, December 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/836148814748

102


Knowledge clusters – Reaping returns from innovation • 5.3 Regional average of PCT patents with co-inventor(s), by location, 2005-07 As a percentage of all patents Co-inventor(s) in the same region

Co-inventor(s) in other domestic regions

Co-inventor(s) in foreign countries

% 80

60

40

20

Ca n h R ada ep ub li c De nm ark Fin lan d Fra nc e Ge rm an y Gr ee ce Hu ng ary Ire lan d Ita ly Ja pa n Ko Lu r e xe a mb ou rg Me xic Ne o the rla Ne nd s w Ze ala nd No rw ay Po lan d Slo Por tug va al kR ep ub li c Sp a in Sw ed Sw en it z erl an d Un Tu ite rke dK y ing do Un m ite dS tat es

ia

um

lgi

Cz

ec

Be

str

Au

Au

str

ali

a

0


Measurability Defining the territorial unit is of prime importance as the word “region” can mean very different things both within and across countries. To address this issue, the OECD has classified the regions of each member country into two territorial levels. The higher level (territorial level 2 – TL2) consists of 335 large regions and the lower level (territorial level 3 – TL3) is composed of 1 681 small regions. All the regions are defined within national borders and in most cases correspond to administrative regions. Each TL3 region is contained within a TL2 region except in Germany and the United States. This classification – which, for European countries, is largely consistent with the Eurostat classification – facilitates comparability of regions at the same territorial level. Indeed these two levels, which are officially established and relatively stable in all member countries, are used as a framework for implementing regional policies in most countries. A limited number of indicators are available at regional level to characterise collaboration in the innovation process. Co-patents represent collaboration that leads to an invention which may or may not be commercialised. Patenting is more likely in certain sectors and focuses on technological innovation. Therefore sectors of activity with a low propensity to patent are under-represented, as are non-technological forms of innovation. More detailed analysis of networks is needed to better understand collaboration dynamics and determine whether it involves inventors in the same entity or across different types of actors (e.g. firms, research institutions), as well as the intensity of such interaction. Patterns of collaboration for knowledge generation by individuals within and across regions may also be explored through co-publications.


103

5.4 • Reaping returns from innovation – Commercialisation Investing in innovation is risky. Several R&D projects will not result in an invention, and not all patent applications will be novel enough to receive a patent.

Patents granted at the European Patent Office by 2009

Did you know?

As a percentage of patent applications first filed in 2000-03

By 2009, less than 40% of all patent applications filed at the EPO between 2000 and 2003 had been granted. (OECD, Patent Database, 2010.)

Austria Luxembourg Germany

Patent applications are used as an indicator of inventive activity. However, to receive patent, the invention must be of practical use and have an element of novelty (“inventive step”).

Italy Norway EU27

An indicator of patents granted can show the likelihood of an invention being commercialised. Depending on the patent office, a patent is granted on average three to five years, but sometimes up to ten years, after application.

Switzerland France Czech Republic Sweden

The indicator shows grant rates for patents filed at the EPO. Use of a single patent office eliminates differences in time to process, stringency of requirements for granting a patent or other institutional differences, but differences in the grant rate for countries remain. This may be due to applicants’ patenting strategies (how selectively businesses choose which inventions to patent) and time needed to process applications in different technological fields. Grant rates are usually lower for non-European than for European countries, notably owing to a longer examination phase.

Spain Hungary Brazil Denmark Finland Belgium South Africa Poland OECD World total

Grant rates for new technology fields (ICT, nanotechnology, biotechnology, renewable energy) are around 15%, less than for grant rates overall. In these fields, applications are filed for a large share of inventions because of uncertainty about their potential value. Also, processing time at the EPO for these technologies is longer. Thus, the average examination period for the United States, which has a relatively large share of applications in hightechnology fields, is longer. However, indicators of grant rates for a given technology also show differences among European countries.

India United Kingdom Japan BRIICS Ireland Canada Netherlands Russian Federation Korea Greece China

Definitions

United States Singapore Israel New Zealand Australia 0

10

20

30

40

50


60 %

Data relate to overall patent applications and applications in selected fields (ICT, biotechnology, nanotechnology and renewable energy) filed at the EPO with a priority date in 2000-03. Patent counts are based on the priority date, the inventor’s country of residence and fractional counts. Only economies with more than 20 patents (in nanotechnology and renewable energy) or 50 patents (in biotechnology and ICT) are included.

1 2 http://dx.doi.org/10.1787/836170884881

104


Commercialisation – Reaping returns from innovation • 5.4 ICT-related patents granted at the European Patent Office by 2009

Sw ed Hu en ng ar No y rw ay Ch ina Fin lan Au d str ia Ita ly De nm ark Gr ee c BR e II C S Ind ia Ca na d Po a lan d Ge rm an y EU 27 Fra nc e So Spa uth in Af ric a Ja Sw p it z an Un e ite d K rland ing do m O EC W or ld D tot Be al lgi um Ko re Ire a l an Ru d A ss ian ust Fe rali a de Ne ratio the n r la nd s Un I ite srae dS l t Sin ate s ga po re Br Ne a w z Ze il ala nd

As a percentage of patent applications related to ICT first filed in 2000-03 % 35 30 Country share 25 1.7 0.1 0.3 in ICT patents (%) 0.5 1.8 0.6 1.7 0.2 0.6 0.0 1.0 1.7 0.0 13.4 36.3 5.6 0.4 0.1 20 23.0 1.6 5.0 97 100 0.7 2.9 0.2 0.8 0.1 4.2 1.0 15 30.2 0.3 0.0 0.1 10 5 0

Biotechnology patents granted at the European Patent Office by 2009 As a percentage of patent applications in biotechnology first filed in 2000-03

% 35 30 25 20 15 10 5 0

0.5 Country share in biotechnology patents (%)

ae

l

a

Isr

str

es

1.4

ite

Au

dS

tat

po

ga

Sin

1.8

ali

re

42.5

Un

W

w

Ne

0.2

CD

al

96

OE

da na

ld

Ca

100

or

Ze

ala

nd

m

s

nd

do

r la

ing

dK

the

2.7

Ru

ss

Un

ite

Ne

0.3

tot

5.7

2.4

ina

ia

0.6

Ch

Au

str

n

d

pa

an

erl

0.8

Sw

Fe ian

11.2

1.8

Ja

e

rat

ion

0.3

de

27

nc

EU

Fra

De

4.8

it z

33.8

ark

y

1.9

nm

an

rm

d

11.9

Ge

ay

0.2

lan

rw

Ko

0.4

No

en

rea

1.1

Ire

1.5

ed

um

Be

Ita

1.4

lgi

ly

1.5

Sw

1.6

ain Fin lan d BR II C S

0.5

Sp

Ind

ia

0.6

Nanotechnology patents granted at the European Patent Office by 2009 As a percentage of patent applications in nanotechnology first filed in 2000-03

0.7

dS

da Ca

tat

na

es

a

str Au

erl

it z

Un

Sw

dK

1.3

Un

ite

36.2

ali

d

an

do

ae

m

l

2.1

ite

0.8

ing

ed

ld or W

Ne

4.5

en

al tot

pa Ja

1.3

Isr

100

n

CD OE

II C

nd r la

22.9

Sw

97

S

s

1.4

the

Be

Ge

Country share in nanotechnology patents (%)

2.6

um

27 EU

an

1.2

BR

30.1

y

rea

11.7

lgi

3.2

ly

Ita

Fra

nc

e

1.4

rm

5.4

Ko

% 35 30 25 20 15 10 5 0

Renewable energy patents granted at the European Patent Office by 2009 As a percentage of patent applications in renewable energy first filed in 2000-03 1.4

1.4

Ne

um

2.6

lgi

str

ali

a

2.3

Au

erl

pa

an

n

d

2.5

Be

18.3

it z

the

r la

nd

ly

s

3.6

Sw

3.9

Ita

es tat

dS ite

Fra

nc

e

12.4

Un

W

or

ld

tot

do

ing dK

3.5

Un

ite

97

CD

al

100

m

y

4

OE

28.2

an

27

57.7

EU

ain Sp

da na

Ca

ia str

Au

ay

en

ed Sw

rw No

nm

ark

1.6

De

Country share in renewable energy patents (%)

1.3

Ja

2.5

rm

4.5

Ge

% 35 30 25 20 15 10 5 0

How to read this figure Germany has the highest share in renewable energy patent applications (28.2%), but only about 14% of patents applied for in 2000-03 had been granted in 2009. Source: OECD, Patent Database, January 2010. See chapter notes. 1 2 http://dx.doi.org/10.1787/836170884881


105

5.5 • Reaping returns from innovation – Knowledge circulation Circulation of knowledge – in particular international circulation of knowledge – has increased over time and is now an important component of technology transfer. Well-designed knowledge networks and markets can reduce transaction costs, enable new knowledge transfers and make existing transfers more efficient.

International technology flows, 1997-2008 Average annual growth rate, based on USD, percentage International technology flows

Did you know? One-third of young patenting European firms consider patents important for convincing private investors to provide them with funds.

GDP

(Zuniga and Guellec, 2009.)

Luxembourg (2002-08) Poland

Technology receipts on patents and licences and payments from R&D services are the main forms of disembodied technology diffusion. The internationalisation of technology flows reflects to some extent cross-border trade in R&D outcomes. Unlike R&D expenditures, these are payments for production-ready technologies. While it is not possible to distinguish between intra- (parents and affiliates) and inter-firms transactions, the rise in international technology flows shows that knowledge is increasingly implemented in a different country from the one in which it was developed.

Hungary Czech Republic Iceland (1998-2007) Switzerland Finland Greece (2000-08) Slovak Republic

Results from a pilot study on patent licences show that licensing is widespread among patenting firms. Around one patenting company in five in Europe licenses patents to non-affiliated partners, and more than one in four does so in Japan. The relation between size of firm and probability to license out is U-shaped: small and large firms are more likely to license out their patented inventions. The major barrier to licensing out patents is identifying partners.

Denmark (1999-2008) Ireland Sweden (1998-2008) Canada France Norway

Many countries with a high share of patents invented by foreign businesses either have large multinational firms that perform R&D abroad or are low-tax countries with no track record of innovation activities. In this case, the intellectual property (IP) may be located there as a way to minimise taxes.

Austria Australia Japan (1997-2007) OECD Germany Portugal

Definitions

New Zealand (1999-2007) Belgium United States United Kingdom Netherlands Italy -5

0

5

10

15

20

Source: OECD, Technology Balance of Payments Database, December 2009; and OECD, Trade in Services Database, December 2009.

25

30 %

Technology flows refer to the average of technological payments and receipts. Trade in technology comprises four main categories: transfer of techniques (through patents and licences, disclosure of know-how); transfer (sale, licensing, franchising) of designs, trademarks and patterns; services with a technical content, including technical and engineering studies as well as technical assistance; industrial R&D. Foreign inventions refer to patents none of whose inventors resides in the country in which a resident owns the patent. Patent applications are filed through the Patent Co-operation Treaty (PCT) at international phase.

1 2 http://dx.doi.org/10.1787/836172515787

106


Knowledge circulation – Reaping returns from innovation • 5.5 Patenting firms licensing out at least one patent to non-affiliated companies, 2006

en

Ita

Ge

Sw

ed

ly

y an

rla the Ne

Sw

Un

ite

rm

nd

EU

d

it z

Ja

erl

pa

an

n

e

dK

ing

Fra

do

nc

m

ia

str Au

ark nm

De

s

As a percentage of total patenting firms

% 50 40 30 20 10 0

Source: Zuniga, M.P. and D. Guellec (2009), “Who licenses out patents and why? Lessons from a business survey”, OECD Science, Technology and Industry Working Papers 2009/5, OECD, Paris. 1 2 http://dx.doi.org/10.1787/836172515787

Foreign inventions owned by countries, 2005-07 Relative to country shares in patent applications Country share in patents (log, %)

50 United States

EU27

Japan Germany

10 Korea Italy

0

India

0


Sweden Finland

Spain Austria

Russian Federation Brazil South Africa Turkey New Zealand Mexico

France

Canada

Australia

Israel 1

United Kingdom

China

Norway

< 5%


Denmark Belgium Singapore

10

Ireland

Virgin Islands (British) < 30%

Barbados Liechtenstein Luxembourg 100 Foreign inventions owned by countries (log, %)

Switzerland filed 2.2% of all patent applications, and 35% of these patent applications have no inventor residing in the country. Source: OECD, Patent Database, January 2010. See chapter notes. 1 2 http://dx.doi.org/10.1787/836172515787

Measurability Technology receipts and payments reflect a country’s ability to sell technology abroad and use of foreign technologies. Most transactions involve operations between parent companies and affiliates. Additional qualitative and quantitative information is needed to analyse a country’s deficit or surplus position in a given year correctly. As it is difficult to dissociate its technological from its non-technological content, trade in services may be underestimated if a significant portion does involve financial payments or if payments are not in the form of technology payments. In 2007 the OECD, the European Patent Office and the University of Tokyo surveyed businesses to investigate licensing out to affiliated and non-affiliated companies, its intensity, evolution, characteristics, motivations and the obstacles encountered by companies that licensed or were willing to do so. Some 600 European firms and 1 600 Japanese firms that were patent holders responded to the survey. The location of patent ownership may reveal the importance of IP tax shifting in OECD countries and may indirectly reveal attractive tax incentives for IP revenue and tax planning strategies. However, the data currently available do not include revenue generated by patents. This limits the analysis that can be undertaken.


107

5 • Reaping returns from innovation – Notes


5.2 Science and industry linkages Patents filed by public research organisations, 2000-07 • Data relate to patent applications filed under the Patent Co-operation Treaty (PCT), by priority date and applicant’s country of residence. Institutional sectors are identified using an algorithm developed by Eurostat and Katholieke Universiteit Leuven. Public research organisations cover the government sector, higher education and hospitals. Green patents are patents applied for technologies relating to pollution abatement and waste management and climate change mitigation. Only economies with more than 50 green patents over the period are included in the figure. 5.3 Knowledge clusters R&D intensity by region, 2007 • Data for Denmark, Iceland, Japan, Mexico, New Zealand, Switzerland and Turkey are not available at the regional level. • The regional breakdown is provided at Territorial Level 2 (TL2). Regional average of PCT patents with co-inventor(s) by location, 2005-07 • Data relate to patent applications filed under the Patent Co-operation Treaty (PCT), by priority date and inventor’s region of residence. • The regional breakdown is provided at Territorial Level 2 (TL2). 5.4 Commercialisation Patents granted at the European Patent Office by 2009 • Data relate to patent applications filed at the European Patent Office (EPO) with a priority date in 2000-03. Patent counts are based on the priority date, the inventor’s country of residence and fractional counts. Only economies with more than 250 patent applications in 2000-03 are included in the figure. ICT-related patents granted at the European Patent Office by 2009 • Data relate to patent applications in ICT filed at the European Patent Office (EPO) with a priority date in 2000-03. Patent counts are based on the priority date, the inventor’s country of residence and fractional counts. Only economies with more than 50 ICT-related patents in 2000-03 are included in the figure. Biotechnology patents granted at the European Patent Office by 2009 • Data relate to patent applications in biotechnology filed at the European Patent Office (EPO) with a priority date in 2000-03. Patent counts are based on the priority date, the inventor’s country of residence and fractional counts. Only economies with more than 50 biotechnology patents in 2000-03 are included in the figure. Nanotechnology patents granted at the European Patent Office by 2009 • Data relate to patent applications in nanotechnology filed at the European Patent Office (EPO) with a priority date in 2000-03. Patent counts are based on the priority date, the inventor’s country of residence and fractional counts. Only economies with more than 20 nanotechnology patents in 2000-03 are included in the figure.

108


Notes – Reaping returns from innovation • 5 Renewable energy patents granted at the European Patent Office by 2009 • Data relate to patent applications in renewable energy filed at the European Patent Office (EPO) with a priority date in 2000-03. Patent counts are based on the priority date, the inventor’s country of residence and fractional counts. Only economies with more than 20 renewable energy patents in 2000-03 are included in the figure. 5.5 Knowledge circulation Foreign inventions owned by countries, 2005-07 • Data refer to counts of patent applications filed through the Patent Co-operation Treaty, at international phase, by applicant’s country of residence and priority date. Foreign inventions owned by countries are the share of patents owned by a resident of a country, for which no inventors reside in the country, as a share of total patents owned by that country. Only economies that applied for more than 100 patents over the period are included in the figure.


109

5 • Reaping returns from innovation – References

References OECD (2009), OECD Factbook 2009: Economic, Environmental and Social Statistics, OECD, Paris. Zuniga, M.P. and D. Guellec (2009), “Who Licenses out Patents and Why? Lessons from a Business Survey”, OECD Science, Technology and Industry Working Paper 2009/5, OECD Directorate for Science, Technology and Industry, OECD, Paris.

110


Chapter 6 Addressing global challenges Innovation is a means of dealing with global and social challenges. A selection of R&D and innovation indicators in the areas of health, climate change and other environmental technologies is presented.

6.1 • Health ................................................................................................. 112 6.2 • Climate change................................................................................... 114 6.3 • Other environmental challenges...................................................... 116


111

6.1 • Addressing global challenges – Health Improving world health is an enormous policy challenge which requires both national and international policy action. Over the coming decades, innovation – both technical and organisational – will play a major role in delivering more personal, predictive and preventive health-care products and will radically change how medicine is practised and health care is delivered.

Total expenditure on health, 2007

Did you know?

As a percentage of GDP Public expenditure on health, % total expenditure on health 2007

United States

45.4

France

79.0

Switzerland

59.3

Germany

76.9

Belgium

79.5

Austria

76.4

Canada

70.0

Portugal (2006)

71.5

Denmark

84.5

Greece

60.3

Iceland

82.5

Sweden

81.7

New Zealand

78.9

Australia

67.5

Netherlands (2002)

62.5

Norway

84.1

Italy

76.5

Spain

71.8

United Kingdom

81.7

Finland

74.6

Japan (2006)

81.3

Slovak Republic

66.8

Ireland

80.7

Hungary

70.6

Luxembourg (2006)

90.9

Czech Republic

85.2

Poland

70.8

Korea

54.9

Mexico

45.2

Turkey (2005)

71.4 0

5

10

15

Source: OECD Health Data 2009, www.oecd.org/health/healthdata. See chapter notes.

The US stimulus package contains over USD 25 billion for the adoption and use of health information technologies by 2014. (US Department of Health and Human Services, 2010.)

Health-related expenditure is one of the most important budgetary expenses of governments and households. For most OECD countries, health-related expenditures account for 6% to 11% of GDP, two-thirds of which is spent by governments. Population ageing, the growing impact of chronic diseases such as diabetes, HIV/AIDS, malaria and tuberculosis, and emerging infectious diseases such as new influenza strains are major challenges for the coming decades. Innovation can help to meet these challenges by improving the performance of health systems and making them more efficient and effective. Health-related research and development (R&D) expenditures provide a useful indicator of innovative efforts in this field. The data on health R&D in GBAORD suggest that the United States accounts for around three-quarters of the OECD total. However, when data from additional government R&D funding categories (general university funds and non-oriented research) are used to adjust for institutional differences in the funding of health R&D, the picture changes.

Definitions

20 %

Government budget appropriations or outlays for R&D (GBAORD) measures the funds committed by the federal/central government for R&D. It can be broken down by various socioeconomic objectives, including health care. Advancement of knowledge comprises non-oriented R&D and general university funds (the estimated R&D content of government block grants to universities). Other includes other relevant national and international categories such as general support for R&D in hospitals.

1 2 http://dx.doi.org/10.1787/836200183171

112


Health – Addressing global challenges • 6.1 Health R&D in government budget appropriations or outlays for R&D, 2008 As a percentage of GDP

% 0.25 0.20 0.15 0.10 0.05

Un

ite d Sp Sta a in te s Un (2 ite O d K ECD 007 ) in g ( do 200 6) m Ca na (200 da 6 (2 ) 00 6 Ice ) lan No d rw ay Ita Au ly str De ali a nm ar Fin k lan d Po rtu K ga orea l( EU 200 27 7 (2 ) 00 6) Ne Fran w c e Hu Z ng eala ar n Es y (2 d to n 00 Cz ia (2 5) ec h R 007 ep ) u Ge bli c Ne rma the ny rla nd Ire s Lu lan xe d mb ou Jap an rg (2 00 7 Au ) Gr ee str c S lo e ( i a ve 200 n Be ia ( 7) 20 lgi 0 u Slo m ( 7) v Ru ak 200 7 ss R ian Me epu ) Fe x ico bli c de ( Sw ratio 200 n ( 6) itz erl 2 an 007 Po d (2 ) lan 00 6) d Isr (20 0 ae l ( 7) 20 0 Sw 7) ed en

0.00

Source: OECD (2009), OECD Science, Technology and Industry Scoreboard 2009, OECD, Paris. 1 2 http://dx.doi.org/10.1787/836200183171

Public funding of health-related R&D, 2007 As a percentage of GDP Direct health GBAORD

%

Advancement of knowledge (medical sciences)

Other

0.30 0.25 0.20 0.15 0.10 0.05

nia

ve Slo

ce ee Gr

08 d( lan

Ire

ep hR ec Cz

ark nm

De

20

ub

00

(2

20

y( an

)

li c

8)

) 08

) rm Ge

rla the Ne

do in g

dK Un

ite

nd

m

s(

(2

20

00

08

6)

d

a in

Fin lan

20

e( nc Fra

(2 ia st r

Sp

) 06

8) 00

en

ed Sw

Au

Un

ite

dS

tat

es

0.00

Source: OECD (2009), OECD Science, Technology and Industry Scoreboard 2009, OECD, Paris. 1 2 http://dx.doi.org/10.1787/836200183171

Measurability Health-related R&D is difficult to measure owing to institutional complexity and diversity; it may be publicly or privately funded and be carried out in firms, universities, hospitals and private non-profit institutions. The GBAORD health category is used here as a proxy for total central government funding of health-related R&D. However, it only covers programmes for which health is the primary objective. Furthermore, the classification of programme and institutional funding depends on how governments present their R&D priorities as well as on the formal mandate of the institutions concerned. Arrangements for funding R&D in hospitals also vary among countries. To address some of these limitations and to provide a more complete picture of health-related R&D, funding of medical sciences via non-oriented research and general university funds are included when available as are other relevant funds, notably general support for R&D in hospitals.


113

6.2 • Addressing global challenges – Climate change Climate change is one of the most significant policy challenges faced by OECD and non-OECD countries. The costs of meeting this challenge depend crucially on the pace of innovation in mitigation technologies. While there is some evidence that the pace is accelerating, further policy efforts are needed to ensure a sufficient response.

Renewable energy patents, 1998-2006

Did you know?

Number of triadic patent families Share of renewable energy patent families in total

Patents to address climate change challenges are increasing and represent approximately 2% of total patent applications.

Japan

0.23

(OECD, The Invention and Transfer of Environmental Technologies, based on patent data, forthcoming.)

Germany

0.42

United States

0.12

United Kingdom

0.24

France

0.12

Netherlands

0.24

Denmark

0.96

Sweden

0.25

Switzerland

0.19

Australia

0.54

Norway

Innovation in climate change mitigation technologies has been increasing, driven largely by public policy incentives. However, in most fields it is still concentrated in Germany, Japan and the United States. Countries tend to specialise. In 2007, Japan’s patent applications were mostly for innovation in energy‑efficient buildings and lighting, as well as electric and hybrid vehicles. Efforts in the United States focused particularly on renewable energy.

1.47

Magnified

Canada

0.19

Belgium

0.26

Spain

0.67

Italy

0.12

Finland

0.22

Austria

0.25

Korea

0.03

Israel

0.11

Brazil

0.61

China

0.18

India

0.21

Russian Federation

0.23

Mexico

1.53

Czech Republic

0.59

Slovenia

0.94

0

A number of technologies associated with energy use result in reduced emissions of greenhouse gases. Technological advances which allow for more efficient combustion, capture of emissions, or substitution of fossil fuels by renewable energy sources will result in reduced atmospheric emissions.

0

5

10

50

100

150

200


Some countries have begun to invest considerable resources in advanced climate change mitigation technologies (e.g. solar photovoltaic energy, hydrogen and fuel cells, carbon capture and storage). Such technologies are currently the most promising in terms of long-term abatement.

Definitions

250

Renewable energy patents include energy‑generation technologies such as wind, solar, geothermal, ocean, hydro, biomass and waste-to-energy. For classifications see www.oecd.org/environment/ innovation/indicator. The OECD triadic patent families are defined as a set of patents protecting the same invention filed at the European Patent Office (EPO), at the Japan Patent Office (JPO) and granted by the US Patent and Trademark Office (USPTO).

1 2 http://dx.doi.org/10.1787/836230555431

114


Climate change – Addressing global challenges • 6.2 Patents for climate change mitigation technologies, 2007 PCT patent applications Renewable energy

Electric and hybrid vehicles

Energy-efficient buldings and lighting

800 600

20

400

10

200

0

Magnified

str ali Sw a ed en Au Sw stri a it z erl an d No rw ay Be lgi um Hu ng ary Ire lan d Fin Cz ec l h R and ep ub li c Gr ee ce Po rtu ga l Me xic Ne w o Ze ala nd Slo Po l va k R and ep u Lu bli xe mb c ou rg Tu rke y

ly

da

Au

na

Ca

ark

nm

De

Ita

m

a in

Sp

rea

do

Ko

dK

Un

ite

Ne

ing

e

s

the

rla

nd

y

Fra

nc

an

rm

Ge

tat

Ja

Un

ite

dS

pa

n

es

0

Source: OECD, Patent Database, January 2010. See chapter notes. 1 2 http://dx.doi.org/10.1787/836230555431

Government research, development and demonstration (RD&D) expenditures on selected climate change mitigation technologies, 2004-08 As a percentage of yearly average RD&D budget CO2 capture and storage

Photovoltaics

Hydrogen

Fuel cells

Energy storage

% 40 30 20 10

ay

ark nm

De

rw

d

an erl

it z

03

-0

Sw

No

7)

m 20

s( nd

rla

Ne

th e

Un

ite

dK

ing

ala

do

nd

y

Ze

rm

ly

an

w

Ne

Ge

Ita

rea Ko

)

00

3-

07

a in

Sp Au

str

ia

(2

da na

3-

Ca

) 07

n

pa lgi

um

(2

00

-0 03

Ja Be

Fra

nc

e(

20

dS

7)

es tat

en

ed

ite Un

7)

-0 03 20

a(

Sw

d

lan Ire

ali

s tr Au

Fin l

an

d(

20

03 -

07

)

0

Source: OECD, Patent Database, January 2010; IEA, Energy Technology Research and Development Database, December 2009. See chapter notes. 1 2 http://dx.doi.org/10.1787/836230555431

Measurability The OECD uses search algorithms to generate data on patent applications for environmental technologies. The data are being further refined with inputs from the European Patent Office. Fields covered are: renewable energy; fuel cells and energy storage; alternatively fuelled vehicles; energy efficiency in the electricity, manufacturing and building sectors; and “clean” coal (including carbon capture and storage). Data on government appropriations and outlays for R&D (GBAORD) by socioeconomic objectives classify energy and the environment separately. However, R&D on climate change mitigation is not explicitly distinguished. In addition, the International Energy Agency (IEA) collects data on public-sector RD&D budgets through inputs from the IEA Implementing Agreements on renewable energy technologies and from members of the Renewable Energy Working Party. In both cases coverage is restricted to OECD/IEA countries and a small number of non‑member countries. A significant gap concerns harmonised data on private-sector R&D expenditures on climate change mitigation. In addition, harmonised microdata are not available on the development and adoption (including licensing) of climate change mitigation technologies. Given the global scale of the challenge, data on non-OECD countries and technology transfer are sorely needed.


115

6.3 • Addressing global challenges – Other environmental challenges Technological change is essential to ensure that economic growth and environmental improvements progress together. It is important for environmental and technology policies to provide appropriate incentives to develop and diffuse environmental technologies.

Patent applications in pollution abatement and waste management technologies, 2002-07

Did you know? The share of the government R&D budget devoted to the environment decreased by 7% in the OECD area in the last decade.

As a percentage of patenting in all sectors 1997-2001

(OECD, Research and Development Database, 2009.)

Number of patents 2002-07

Greece

26

Poland

31

Czech Republic

30

South Africa

8

Hungary

23

Denmark

65

Brazil

26

Austria

167

Norway

57

Portugal

6

Russian Federation

54

Australia

69

Luxembourg

7

New Zealand

12

Sweden

187

Belgium

87

Spain

100

Mexico

12

Germany

2 481

France

801

Netherlands

173

Finland

127

Italy

172

Canada

242

United Kingdom

406

Japan

3 194

Switzerland

94

United States

1 632

India

30

Ireland

8

Israel

29

Korea

484

China

93 0

2

4

6

8

Source: OECD calculations based on EPO, Worldwide Patent Statistical Database, September 2009. See chapter notes.

While the major OECD economies are generally the most active innovators in air and water pollution abatement and solid waste management, some smaller economies have developed specialisations in this area. Work undertaken at the OECD indicates that predictability, flexibility and stringency of environmental policies are conducive to higher investment in innovation. Over the last decade, both the level of patenting and public research efforts related to environmental technologies have decreased. However, while patent levels for air pollution abatement have generally increased, innovation for solid waste management has decreased. Evidence at the plant level shows differences in innovation efforts across sectors and countries. Empirical analysis indicates that the propensity to report environmentally related R&D increases with the use of incentive-based measures such as environmentally related taxes.

Definitions

10 %

Pollution abatement technologies include air pollution control, water pollution control and wastewater treatment. Waste management technologies cover disposal of solid waste, waste material re-use and recycling, and energy recovery from waste. For further details on classifications see www.oecd.org/ environment/innovation/indicator. Government budget appropriations or outlays for R&D (GBAORD) measures the funds committed by the federal/ central government for R&D. It can be broken down by various socioeconomic objectives, including control and care for the environment. Facility is defined as business establishment. For more information see the OECD Project on Environmental Policy and Corporate Behaviour (www.oecd.org/env/cpe/firms).

1 2 http://dx.doi.org/10.1787/836234010113

116


Other environmental challenges – Addressing global challenges • 6.3 Government R&D budget devoted to control and care for the environment, 2008 As a percentage of total government R&D budget 1998 % 16 14 12 10 8 6 4 2

str al Po ia rtu g Hu al ng ary Po Ko lan rea d (1 99 9 ) Slo Ger m va k R any e Lu publ xe i mb c ou rg EU 27 Cz Fra ec n hR ce ep Gr ub ee l ic ce (2 00 7 Un Den ) m ite d K ark Me in gd o x ic o( m 20 06 ) Be lgi um No rw ay Au str ia OE CD Sw ed en Fin lan d Ire lan d Ja Un ite pan dS Ne tate s the rla nd s Ice Sw land it z erl an d

ly

a in

Au

Sp

7)

Ita

00

(2

da

na

Ca

Ne

w

Ze

ala

nd

(1

99

9)

0

Source: OECD, Research & Development Database, December 2009. 1 2 http://dx.doi.org/10.1787/836234010113

Facilities with environmentally related R&D in selected manufacturing sectors, 2003 As a percentage of facilities with at least some R&D expenditures

% 25

Chemical

20

Machinery

Metal

Transport

15 10 5

e

y an

Ge

rm

es

nc

Fra

tat

ite

dS

n

ary

ng

Hu

Un

ay

pa

Ja

y

da

rw

na

No

Ca

e

an

nc

rm

Fra

Ge

da

ary

na

ng

Ca

Hu

n

es

pa

tat

ite

dS

ay

Ja

Un

y an

rw

No

Ge

rm

n

ary

pa

ng

Ja

Hu

ay

da na

Ca

e

rw

No

es

nc

tat

Fra

y an

Un

ite

dS

ary

rm

Ge

Hu

ng

es

n

pa

tat

Un

ite

dS

nc

e

Ja

da

Fra

na

Ca

No

rw

ay

0

Source: OECD (2007), Business and the Environment, OECD, Paris. 1 2 http://dx.doi.org/10.1787/836234010113

Measurability Collection of data on environmental innovation is complicated because many innovations with positive environmental consequences are not explicitly concerned with environmental improvement. Many environmentally significant innovations involve changes in production processes that reduce operating costs or improve product quality. Determining whether an innovation is environmental or not is a question of degree and not of kind. Bearing this in mind, search algorithms developed by the OECD Secretariat with the help of researchers from the Paris Graduate School of Economics, Statistics and Finance were used to generate data on environmental technology patent applications. The data cover technologies for water and wastewater treatment, air pollution abatement, and waste management, recycling and prevention. A 2003 OECD survey of over 4 000 manufacturing facilities collected data on environmental R&D expenditures, the adoption of integrated environmental technologies, and organisational innovations with positive environmental consequences. Development of a panel database would help to understand the determinants of environmental innovation.


117

6 • Addressing global challenges – Notes


6.1 Health Total expenditure on health, 2007 • Total expenditure on health, % of GDP: Estimated data for Belgium, Luxembourg, the Netherlands and Switzerland. • Public expenditure on health, % of total expenditure on health 2007: Estimated data for Switzerland. • Current expenditure on health: New Zealand. • Public and private expenditures are current expenditures (excluding investments): Belgium and the Netherlands. • Health expenditure is for the insured population rather than the resident population: Luxembourg. 6.2 Climate change Renewable energy patents, 1998-2006 • Triadic patent families are patents filed at the European Patent Office (EPO), the US Patent and Trademark Office (USPTO) and the Japan Patent Office (JPO) which protect the same invention. Counts are presented according to the priority date and the residence of the inventors. Patents for climate change mitigation technologies, 2007 • Data relate to patent applications filed under the Patent Co-operation Treaty (PCT), by priority date and inventor’s country of residence. Government research, development and demonstration (RD&D) expenditures on selected climate change mitigation technologies, 2004-08 • Average taken over the four-year period, zeros are treated as missing. • Only countries with budget of RD&D higher than USD 10 million are included. 6.3 Other environmental challenges Patent applications in pollution abatement and waste management technologies, 2002-07 • Data refer to counts of patent applications (claimed priorities), by priority date and inventor’s country of residence. • Only countries with at least five pollution abatement and waste management technology patents in both periods are included.

118


References – Addressing global challenges • 6

References OECD (2007), Business and the Environment: Policy Incentives and Corporate Responses, OECD, Paris. OECD (2009), OECD Science, Technology and Industry Scoreboard 2009, OECD, Paris. OECD (forthcoming), The Invention and Transfer of Environmental Technologies, OECD, Paris. US Department of Health and Human Services (2010), US Department of Health and Human Services – American Recovery and Reinvestment Act Programs, www.hhs.gov/recovery/programs/index.html#Health (accessed March 2010).


119

List of figures

List of Figures Chapter 1 Innovation today Sources of growth – Decomposition of growth in GDP per capita, 2001-08. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 New sources of growth – Labour productivity growth: adding the contribution of intangible assets, 1995-2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Intangible assets – Investment in fixed and intangible assets as a share of GDP, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Innovation beyond R&D – New-to-market product innovators, 2004-06. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Protection of innovation – Patents and trademarks per capita, 2005-07. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Trademarks – Service-related trademarks, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 – Comparing cycles: United States gross domestic product and trademark applications at the USPTO, 1999-2010 . . . . . . . . . . . . . . . . . . . . . . . 25 Mixed modes of innovation – Complementary innovation strategies in manufacturing, 2004-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 – Complementary innovation strategies in services, 2004-06. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Collaboration in innovation – Firms with national/international collaboration on innovation, 2004-06. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 – Collaboration on innovation, 2004-06. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Mapping hot research areas – Hot research areas on a science map, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Multidisciplinary and interdisciplinary research – Locations of inter/multidisciplinary research areas on the science map, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 New players in research – Scientific articles and co-authorship, 1998 and 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Scientific collaboration – Trends in co-operation on scientific articles, 1985-2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 – Scientific collaboration with BRIC countries, 1998 and 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Clusters of knowledge – Patents per million inhabitants, Europe, average 2005-07. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – Patents per million inhabitants, North America, average 2005-07 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – Patents per million inhabitants, Japan and Korea, average 2005-07 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – Patents per million inhabitants, Australia and New Zealand, average 2005-07. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

32 33 33 34

Innovation hotspots – Innovation hot spots in renewable energy, 2005-07 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 – Innovation hot spots in biotechnologies and nanotechnologies, 2005-07 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Science for environmental innovation – The innovation-science link in “green” technologies, 2000-07. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Technological innovation for climate change – Trends in technological innovation for climate change mitigation, 1978-2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Transfers of environmental technologies – Transfer of wind (top) and solar photovoltaic (bottom) technologies, 1990-2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Chapter 2 EMPOWERING PEOPLE to innovate 2.1 • Basic scientific skills – Reading, mathematics and science proficiency at age 15, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 – Length of time students have been using a computer and mean PISA science score, 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 2.2 • Tertiary education – Transition from upper secondary education to graduation at the university level, 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 – Annual tuition fees charged by public universities and public subsidies to private entities, 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 – Private net present value for an individual obtaining tertiary education as part of initial education, 2005. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47


121

List of figures

2.3 • Doctorate holders – Graduation rates at doctorate level, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 – Science and engineering graduates at the doctoral level, 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 – New graduates at doctorate level, by country of graduation, 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 2.4 • Skills mismatch – Unemployment rate of university graduates, 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 – Supply of and demand for highly skilled employees, 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 – Percentage difference in median gross annual earnings between doctorate holders working as researchers and those not working as researchers, 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 2.5 • International mobility – International students, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 – Job-to-job mobility of human resources in science and technology (HRST), employed 25-to-64-year-olds, 2007 . . . . . . . . . . . . . . . . . . . . . . . . 53 – International mobility of doctorate holders, by main destination, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 2.6 • Entrepreneurial talent – Self-employed, by place of birth, 15-to-64-year-olds, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 – Percentage of the population aged 18 to 64 years old who received any type of training in starting a business, during or after school, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 2.7 • Gap page – Innovative workplace and skills for innovation – Firms engaged in innovation-related training activities, by size, 2004-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 2.8 • Consumers’ demand for innovation – Final consumption expenditure of households, by selected category, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 – Percentage of households having invested in environmentally friendly products in the last ten years, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 – Monthly household expenditures on communication services, by type of access, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Chapter 3 Unleashing innovation in firms 3.1 • Entry and exit – Entry rate, average 2000-07. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 – Employer enterprise birth rate (2006) and death rate (2005) in the manufacturing sector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 – Employer enterprise birth rate (2006) and death rate (2005) in the services sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 3.2 • Mobilising private funding – Long-term interest rates, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 – Venture capital investment, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 – Business angels, 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 3.3 • Policy environment – Days needed to start a business, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 – Barriers to entrepreneurship, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 – Taxation on personal income and corporate income, 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 3.4 • Young and innovative firms – One- and two-year-old employer enterprises in manufacturing and in services, 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 – Patenting activity of young firms, 2005-07. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 – Patenting and survival – within a two-year window, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Chapter 4 Investing in innovation 4.1 • Firms investing in R&D – Business enterprise expenditure on R&D, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 – Direct and indirect government funding of business R&D and tax incentives for R&D, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 4.2 • Firms investing in innovation – Expenditure on innovation, by firm size, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 – Firms receiving public support for innovation, by size, 2004-06. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 – Firms’ turnover from product innovation, by type of innovator, 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 4.3 • Government funding R&D – Government budget appropriations or outlays for R&D, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 – Government budget appropriations or outlays for R&D, by selected socio-economic objectives, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 – Government budget appropriations or outlays for R&D, by national sector of performance, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 4.4 • Higher education and basic research – Higher education expenditure on R&D, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 – Government funded R&D in higher education, by type of funding, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 – Basic research performed in the public sector, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 4.5 • Information and communication technologies – ICT investment, by asset in OECD countries, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 – Increase in the probability to innovate linked to ICT use, manufacturing, 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 – Increase in the probability to innovate linked to ICT use, services, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

122


List of figures

4.6 • Firms and smart infrastructure – OECD broadband subscribers per 100 inhabitants, by technology, June 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 – Evolution of a representative DSL broadband subscription over time, 2005-09. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 4.7 • Governments and smart infrastructure – E-government readiness index, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 – Relation between broadband penetration and citizen uptake of e-government services, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 4.8 • Gap page – Measuring innovation in the public sector – Total expenditure of general government, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 4.9 • Gap page – Multilevel governance of innovation – Share of sub-national government in public investment, 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Chapter 5 Reaping returns from innovation 5.1 • Scientific collaboration – Scientific articles, by type of collaboration, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 – Highly cited (top 1%) scientific articles, by type of collaboration, 2006-08. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 5.2 • Science and industry linkages – Patents filed by public research organisations, 2000-07 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 – Main scientific fields cited in “green” patents, by inventor country, 2000-07. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 – Relative citation rate in “green” patents, by main scientific fields 2000-07. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 5.3 • Knowledge clusters – R&D intensity, by region, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 – Regional average of PCT patents with co-inventor(s), by location, 2005-07. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 5.4 • Commercialisation – Patents granted at the European Patent Office by 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 – ICT-related patents granted at the European Patent Office by 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 – Biotechnology patents granted at the European Patent Office by 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 – Nanotechnology patents granted at the European Patent Office by 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 – Renewable energy patents granted at the European Patent Office by 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 5.5 • Knowledge circulation – International technology flows, 1997-2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 – Patenting firms licensing out at least one patent to non-affiliated companies, 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 – Foreign inventions owned by countries, 2005-07 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Chapter 6 Addressing global challenges 6.1 • Health – Total expenditure on health, 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 – Health R&D in government budget appropriations or outlays for R&D, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 – Public funding of health-related R&D, 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 6.2 • Climate change – Renewable energy patents, 1998-2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 – Patents for climate change mitigation technologies, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 – Government research, development and demonstration (RD&D) expenditures on selected climate change mitigation technologies, 2004-08. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 6.3 • Other environmental challenges – Patent applications in pollution abatement and waste management technologies, 2002-07. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 – Government R&D budget devoted to control and care for the environment, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 – Facilities with environmentally related R&D in selected manufacturing sectors, 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117


123

Data sources

Data sources EPO, Worldwide Patent Statistical Database, www.epo.org/patents.html. EUROSTAT, Community Innovation Survey (CIS), epp.eurostat.ec.europa.eu/portal/page/portal/science_technology_innovation/data/database. EUROSTAT, European Labour Force Survey, epp.eurostat.ec.europa.eu/portal/page/portal/employment_unemployment_lfs/data/database. EUROSTAT, National Accounts Database, epp.eurostat.ec.europa.eu/portal/page/portal/national_accounts/data/database. EU KLEMS Database, www.euklems.net. IEA, Energy Technology Research and Development Database, www.iea.org/stats/rd.asp. OECD, ANSKILL Database (forthcoming), www.oecd.org/sti/stan. OECD, Broadband Statistics, www.oecd.org/sti/ict/broadband. OECD, Education Database, www.oecd.org/education/database. OECD, Educational Attainment Database (for internal use only). OECD, Entrepreneurship Financing Database, www.oecd.org/statistics/measuringentrepreneurship. OECD, HAN Database, www.oecd.org/sti/ipr-statistics. OECD, Health Data 2009, www.oecd.org/health/healthdata. OECD, Main Economic Indicators Database (MEI), www.oecd.org/std/mei. OECD, Main Science and Technology Indicators Database (MSTI), www.oecd.org/sti/msti. OECD, National Accounts Database, www.oecd.org/std/national-accounts. OECD, Patent Database, www.oecd.org/sti/ipr-statistics. OECD, PISA Database, www.pisa.oecd.org. OECD, Product Market Regulation Database, www.oecd.org/eco/pmr. OECD, Productivity Database, www.oecd.org/statistics/productivity. OECD, Regional Database, www.oecd.org/gov/regional/statisticsindicators. OECD, REGPAT Database, www.oecd.org/sti/ipr-statistics. OECD, Research and Development Database, www.oecd.org/sti/rds. OECD, Structural and Demographic Business Statistics Database (SDBS), www.oecd.org/std/entrepreneurship. OECD, Technology Balance of Payments Database, (for internal use only). OECD, Trade in Services Database, www.oecd.org/std/trade-services. OECD/UIS/Eurostat CDH data collection, www.oecd.org/sti/cdh. OHIM, Community Trademark Database, CTM Download, www.tm-xml.org. ORBIS© Database, Bureau Van Dijk Electronic Publishing, www.bureauvandijk.com/en/ORBIS.html. Scopus Custom Data, Elsevier, www.customdata.scopus.com. Statistics Canada, Innovation Survey 2005, www.statcan.gc.ca/imdb-bmdi/4218-eng.htm. Thomson Reuters, Science Citation Index, www.thomsonreuters.com/products_services/science/science_products/a-z/science_citation_index. USPTO, Trademark BIB ACE Database (Cassis), www.uspto.gov/products/catalog/media/cassis/index.jsp. USPTO, Trademark Electronic Search System (TESS), www.uspto.gov/ebc/tess. World Bank, Entrepreneurship Database WBGES08, econ.worldbank.org/research/entrepreneurship. WIPO, Trademark Statistics, www.wipo.int/ipstats/en/statistics/marks.


125

OECD PUBLICATIONS, 2, rue André-Pascal, 75775 PARIS CEDEX 16 PRINTED IN FRANCE (92 2010 04 1 P) ISBN 978-92-64-05946-7 – No. 57375 2010

Measuring Innovation A NEW PERSPECTIVE


Measuring Innovation: A New Perspective presents new measures and new ways of looking at traditional indicators. It builds on 50 years of indicator development by OECD and goes beyond R&D to describe the broader context in which innovation occurs. It includes some experimental indicators that provide insight into new areas of policy interest. It highlights measurement gaps and proposes directions for advancing the measurement agenda.

A NEW PERSPECTIVE

This publication begins by describing innovation today. It looks at what is driving innovation in firms, and how the scientific and research landscape is being reconfigured by convergence, interdisciplinarity and the new geography of innovation hot spots. It presents broader measures of innovation, for example using new indicators of investment in intangible assets and trademarks. Human capital is the basic input of innovation, and a series of indicators looks at how well education systems are contributing to the knowledge and research bases. Further series examine how firms transform skills and knowledge, and shed light on the different roles of public and private investment in fostering innovation and reaping its rewards, with concrete examples from major global challenges such as health and climate change. Measuring Innovation is a major step towards evidence-based innovation policy making. It complements traditional “positioning”-type indicators with ones that show how innovation is, or could be, linked to policy. It also recognises that much more remains to be done, and points to the measurement challenges statisticians, researchers and policy makers alike need to address. For more information about the OECD Innovation Strategy, see www.oecd.org/innovation/strategy.


Further reading The OECD Innovation Strategy: Getting a Head Start on Tomorrow

A NEW PERSPECTIVE

The full text of this book is available on line via these links: www.sourceoecd.org/education/9789264059467 www.sourceoecd.org/environment/9789264059467 www.sourceoecd.org/scienceIT/9789264059467 www.sourceoecd.org/socialissues/9789264059467 www.sourceoecd.org/agriculture/9789264059467 Those with access to all OECD books on line should use this link: www.sourceoecd.org/9789264059467 SourceOECD is the OECD online library of books, periodicals and statistical databases. For more information about this award-winning service and free trials ask your librarian, or write to us at [email protected].

www.oecd.org/publishing

ISBN 978-92-64-05946-7 92 2010 04 1 P

-:HSTCQE=UZ^Y[\:

Measuring Innovation: A New Perspective

Entrepreneurship: A New Perspective

A New Ecology: Systems Perspective

Microeconomic Policy: A New Perspective

A New Perspective on Thermodynamics

Chemical Engineering. A New Perspective

A New Perspective on Thermodynamics

A New Perspective on Thermodynamics

Measuring Economic Welfare: New Methods

Measuring Economic Welfare: New Methods

United Arab Emirates: A New Perspective

Atherosclerosis And Oxidant Stress - A New Perspective

Abnormal Psychology Casebook: A New Perspective

Perspective: A New System for Designers

A New Perspective on Asset Allocation

The Handbook of Innovation and Services: A Multi-Disciplinary Perspective

Technocapitalism: A Critical Perspective on Technological Innovation and Corporatism

Facilitating Sustainable Innovation through Collaboration: A Multi-Stakeholder Perspective

Malaria: A Hematological Perspective: A Hematological Perspective

Measuring College Learning Responsibly: Accountability in a New Era

Measuring and Sustaining the New Economy

E-Governance: A Global Perspective on a New Paradigm

Measuring Up

Innovate the Future: A Radical New Approach to IT Innovation

Measuring Psychopathology

Measuring Up

Innovate the Future: A Radical New Approach to IT Innovation

Global Innovation: Innovation 01.02

Innovate the Future: A Radical New Approach to IT Innovation

Research and Technological Innovation: The Challenge for a New Europe

Measuring Innovation: A New Perspective

Entrepreneurship: A New Perspective

A New Ecology: Systems Perspective

Microeconomic Policy: A New Perspective

A New Perspective on Thermodynamics

Chemical Engineering. A New Perspective

A New Perspective on Thermodynamics

A New Perspective on Thermodynamics

Measuring Economic Welfare: New Methods

Measuring Economic Welfare: New Methods

United Arab Emirates: A New Perspective

Atherosclerosis And Oxidant Stress - A New Perspective

Abnormal Psychology Casebook: A New Perspective

Perspective: A New System for Designers

A New Perspective on Asset Allocation

The Handbook of Innovation and Services: A Multi-Disciplinary Perspective

Technocapitalism: A Critical Perspective on Technological Innovation and Corporatism

Facilitating Sustainable Innovation through Collaboration: A Multi-Stakeholder Perspective

Malaria: A Hematological Perspective: A Hematological Perspective

Measuring College Learning Responsibly: Accountability in a New Era

Measuring and Sustaining the New Economy

E-Governance: A Global Perspective on a New Paradigm

Measuring Up

Innovate the Future: A Radical New Approach to IT Innovation

Measuring Psychopathology

Measuring Up

Innovate the Future: A Radical New Approach to IT Innovation

Global Innovation: Innovation 01.02

Innovate the Future: A Radical New Approach to IT Innovation

Research and Technological Innovation: The Challenge for a New Europe

Recommend Documents