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CONSIDERING INNOVATION

CONSIDERING INNOVATION. Nicholas Vonortas Center for International Science and Technology Policy The George Washington University 5th Regular Meeting of the Inter-American Committee on Science and Technology Organization of American States Washington, D.C. September 20-21, 2007.

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CONSIDERING INNOVATION

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  1. CONSIDERING INNOVATION Nicholas Vonortas Center for International Science and Technology Policy The George Washington University 5th Regular Meeting of the Inter-American Committee on Science and Technology Organization of American States Washington, D.C. September 20-21, 2007

  2. CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y Global Economy The on-going globalization process brings more intense and widespread competition, consequently faster rates of change, and radical rethinking of company strategy and public policy. Current buzzwords of the global economy: • Knowledge-based economy • Innovation • Entrepreneurship • International division of labour (investment, outsourcing)

  3. CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y Innovation Imperative • Globalization is: • Generally Good for Business • On Average Good for the World • Generating Winners and Losers • Competitiveness is: • Essential for Firms that Would like to be Winners • Essential for Countries that Do not Want to be Marginalized • Innovation is Central to Competiveness and: • Generates New Business Models and Strategies • Stimulates New National Innovation and Growth Strategies • Changes the Public Policy Agenda

  4. CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y The “Old” New Era It has become commonplace to argue that technological advance is the most important source of long term economic growth. The traditional perception of high technology has been research and development (R&D) intensive manufacturing industries. The importance of technology-based economic activities has been associated with the share of high technology manufacturing industries in the gross domestic product (GDP) of a country.

  5. CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y The “New” New Era The penetration of “infrastructural” technologies (ICTs, biotech, advanced materials, nano) throughout the economy has dramatically altered the basic meaning of high technology during the past decade. Rather than referring to the output of R&D-intensive industries, high tech now refers to a style of work applicable to just about any business. Several policy and business analysts have gone on to claim that there are no longer high and low tech industries there are high and low tech firms.

  6. Many now argue that advanced economies have entered an era of knowledge-based development and growth CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y Materials technologies revolution Biotech revolution Knowledge-Based Economy Communications revolution Infotech revolution Globalization international trade finance investment

  7. CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y Implications • Innovation has become: - more market-driven; - more rapid and intense; - more closely linked to scientific progress; - more widely spread throughout the economy. • The ways in which organizations interact in an economy have been affected, with networking, cooperation, and the rapid flow of knowledge within and across national borders gaining in importance.

  8. CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y Implications • In reaction to (i) increasing costs and risks of innovation and (ii) intensifying international competition, many firms have opted for more focus and specialization. • At the same time, as the range of technologies required for innovation in many industries has expanded and technologies have become more complex, companies can no longer cover all relevant disciplines and the required wide range of scientific and commercial knowledge. • The need for cooperation has thus become greater than ever before. The number of strategic partnerships has exploded the last couple of decades.

  9. CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y A New Era for Policy Effective policy for competitiveness must, thus, focus on the broader notion of innovation than just technology. Innovation policy, which has traditionally been considered as an extension of R&D policy, is now starting to be seen as a generic policy area in which governments can promote an innovative, flexible adaptation of their economies.

  10. CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y A New Era for Policy Innovation policy will be more user-centered and demand-based than technology policy. As such, innovation policy must be better integrated with: - General economic policies that affect incentives to innovate; - Policies that shape the regulatory and institutional environment in which innovation takes place; and, - Policies providing safety nets for parts of the population that fail to follow the ever increasing pace of change.

  11. CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y Policy Recommendations Ensure that economic and social fundamentals are in place: • Preserve macroeconomic stability; • Encourage openness; • Make financial systems more supportive of innovation; • Mobilize labor resources; • Address the redistributive implications of structural change.

  12. CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y Policy Recommendations Foster innovative environment: • Give greater priority to basic research: future innovation will be jeopardized without it; • Improve the effectiveness of government funding for innovation; • Make greater use of competitive funding and evaluation in supporting public research; • Tackle new challenges in intellectual property regimes; • Remove barriers and regulations that limit effective interaction between universities, firms and public laboratories.

  13. CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y Policy Recommendations Enhance human capital: • Invest in high-quality early education and child care; • Raise completion of basic and vocational education and improve the quality of the system; • Improve school-to-work transition; • Strengthen the links between higher education and the job market; • Provide wider training opportunities; • Reduce obstacles to workplace changes and give workers a greater voice.

  14. CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y Policy Recommendations Stimulate firm creation / entrepreneurship: • Promote access to financing; • Facilitate firm entry and exit; • Review and access the relevance and effectiveness of government support systems; • Encourage an entrepreneurial spirit in society.

  15. CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY T h e G e o r g e W a s h i n g t o n U n i v e r s i t y Message Think beyond just R&D Nurture a cutting-edge knowledge-based economy Promote Innovation

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