The Innovation Imperative - Contributing to Productivity, Growth and Well-Being

  • Innovation Team profile
    Innovation Team
    29 January 2016 - updated 2 years ago
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Innovation provides the foundation for new businesses, new jobs and productivity growth and is a key driver of economic growth and development. Innovation can also help address pressing social and global challenges, including demographic shifts, disease threats, resource scarcity and climate change. Innovative economies are more productive, more resilient, more adaptable to change and better able to support higher living standards.Strengthening innovation is therefore a fundamental challenge for countries in their quest for greater prosperity and better lives. This new OECD report on The Innovation Imperative – Contributing to Productivity, Growth and Well-Being provides a toolbox for governments that wish to strengthen innovation and make it more supportive of inclusive and green growth. The list of policies for innovation is long and goes beyond research and technology policies. This report shows that four areas of policy are particularly important. First, innovation relies on a skilled workforce that can generate new ideas and technologies, implement them and bring them to the market. Addressing skills shortages and mismatching is critical in order for the workforce to adapt to technological and structural changes and promote inclusive growth. Second, innovation requires a sound business environment that encourages investment in technology and in knowledge-based capital,that enables innovative firms to experiment with new ideas, technologies and business models, and that helps them to grow, increase their market share and reach scale. Third, innovation needs a strong and efficient system for knowledge creation and diffusion that invests in the systematic pursuit of fundamental knowledge, and that diffuses knowledge throughout society. And finally, specific innovation policies are needed to tackle a range of barriers to innovation and entrepreneurial activity. The impact of good innovation strategies depends on their governance and implementation, including the trust in government action and the commitment to learn from experience. Evaluation needs to be embedded into the process of policy development, and should not be an afterthought. This report extensively discusses how policies for innovation can be applied in different contexts, including for inclusive and sustainable growth, and what challenges need to be overcome in implementing such policies.The report argues that policy makers can and should do better in marshalling the power of innovation to achieve core objectives of public policy. Policies for innovation require a strategic approach. This update of the OECD Innovation Strategy, which we have developed by bringing together expertise from across the entire Organisation, sets out how governments can deliver better innovation policies for better lives.