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Headlines Published on 01 February 2005

Title Science, technology and innovation regaining momentum, OECD reports

Science, technology and innovation (STI) are central to improving economic performance – this much is known. What governments do to grease the innovation wheels is the subject of volumes of analysis and strategy. Every year, the Organisation for Economic Co-operation and Development (OECD) surveys the STI outlook in its member countries and beyond. Its 2004 report previews the future of R&D spending and other important trends.

More than a drop of innovation is needed in science and technology. © PhotoDisc
More than a drop of innovation is needed in science and technology.
© PhotoDisc
As sluggish economies give way to better prospects in the OECD region – and in many other countries surveyed in its recent report on the STI outlook – attention turns to ways of tapping into research and development (R&D) as a conduit for achieving wider socio-economic objectives.

According to this 30-member international organisation, the transition to knowledge-based economies, coupled with growing competition from non-OECD countries, has increased developed countries’ reliance on creating, diffusing and exploiting scientific and technological knowledge – and other intellectual assets – in an effort to boost economic growth and productivity.

“High-technology industries,” the report says, “account for a growing share of OECD-wide value-added and international trade, and can be expected to play a significant role in economic recovery.” However, until very recently, investments in STI have been constrained by slower than normal economic growth, it continues.

Take, for example, global investment in R&D, which grew less than 1% between 2001 and 2002, compared with an average of 4.6% annually in the seven years prior. As a result, the report says, R&D spending slipped from 2.28% down to 2.26% of GDP across the OECD region, driven down by the USA, in particular, which was hard hit by the economic slump.

Governments plump up
Meanwhile, OECD governments – especially in the USA, Japan and EU – modestly increased their R&D expenditures between 2000 and 2002, from 0.63% to 0.68% of GDP. But this is still a far cry from the halcyon days of spending in the 1990s. Indeed, science and innovation has been receiving much greater political attention, the 2004 Outlook insists.

Many OECD countries have introduced new or revised national plans for STI policy, and a growing number, including EU members, have established targets for increased R&D spending. At the European level, this has been driven by policy decisions aimed at strengthening and structuring the fabric of European research, a strategy enshrined in the European Research Area (ERA) and activated by the Union’s Lisbon and Barcelona goals.

“But policy must adapt to the growing role of the service sector and increased globalisation of science and technology,” the report continues. According to the latest figures, services now account for 23% of total business R&D (2000), compared with 15% in 1991. “The ability of service-sector firms to innovate will greatly influence overall growth, productivity and employment patterns,” it adds.

Among other things, the 2004 Outlook predicts that public R&D budgets are poised to grow, especially for information communications technology, biotechnology and nano-technology. Reforms of public research organisations, such as those undertaken in Denmark, Japan and the Slovak Republic, will improve their ability to contribute to socio-economic well-being. Several OECD countries, such as Norway and Switzerland, have reformed the way intellectual property is dealt with and introduced schemes to boost technology transfer. Public-private partnerships are seen as increasingly important for getting better returns from public investment in research, it concludes.

Source:  OECD

Research Contacts page

More information:

  • OECD STI Outlook 2004 (PDF icon [168 Kb] summary)
  • Lisbon Strategy (on Europa)

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