OECD report urges countries to promote science and innovation
The Organisation for Economic Cooperation and Development (OECD) has published a review of science, technology and innovation policies in its member countries and six others (including China, Israel and the Russian Federation) that advises governments to promote science and innovation in order to drive long-term growth. The publication, 'OECD Science, Technology and Industry Outlook 2008,' encourages OECD member countries to foster links between public research bodies and industry, and to increase international cooperation. According to the OECD's report, business accounts for the majority of research and development (R&D) performed in most OECD countries, and while this investment has grown over the past decade the pace of growth has slowed considerably since 2001. Business expenditure on R&D (BERD) in the US fell from 2.05% of GDP in 2000 to 1.84% of GDP in 2006, while in the EU member states it has increased so slowly that 'the EU will not be able to reach its BERD target of 2% GDP by 2010'. Global shares of expenditure on R&D are estimated by the OECD to be around 35% for the US, 24% for the EU and 14% for Japan. Since 2000, the report says, the slow growth of business spending on R&D caused a 2% drop in the European share. Importantly, the report says that the current financial market instability is expected to have some long-term impacts on business spending on R&D globally. Emerging economies account for a sharply growing share of global spending on research and development (R&D). China's spending on R&D in the business sector as a percentage of GDP has increased annually by around 20%, compared with an average annual growth factor of around 3% in the EU and the US. Patents and scientific publishing have increased in recent years, according o the report, but the European share of patents that are filed in the US, Japan and EU has fallen, while the share from Asian economies has increased sharply. Publication of scientific articles remains highly concentrated in a few countries. Foreign talent contributes significantly to the number of people working in science and technology fields in many OECD countries. 'With many countries developing a range of initiatives to facilitate mobility,' the report says, 'the internationalisation of the [science and technology] labour market is likely to continue. At the same time, the growing international competition for talent means that countries will increasingly need to strengthen their own investment in human resources.' Increased globalisation of research activities, more open forms of innovation, and evolving national and global concerns have challenged national science and technology policies, the report says. 'Countries must build national research and innovation capacity to attract foreign investment in R&D and innovation must foster participation in global value chains.' The report describes the European Union's development of a European Research Area (ERA) as an example of improving coordination of national policymaking and implementation. Notably, targets set by the EU for countries to increase research spending have led to an increase in public funding of R&D, despite persistent budget constraints. The OECD report concludes that themes that need to be addressed urgently include increasing co-operation between foreign firms and governments in order to attract foreign investment, and improving policies to foster talent in domestic economies. Also, because innovation in firms comprises technological, process, organisational and marketing innovations, policies to foster innovation will need to embrace the full range of these diverse activities. The OECD is located in Paris, France and currently has 30 members and a budget of around EUR 343 million. Members include 22 European countries, the US and Japan, among others. The European Commission participates in the work of the organisation and has a quasi-member status. The OECD provides statistics on economic and social data, monitors trends, analyses economic developments and researches evolving patterns in society and trade. The organisation also provides a platform for governments to 'compare policy experiences, seek answers to common problems, identify good practice and coordinate domestic and international policies'.