R&D INTENSITY AS A POLICY TARGET
The OECD project ‘R&D intensity as a policy target’ (2019-20) explored the relationship between aggregate national R&D performance and disparities at the regional, sectoral and firm levels, as well as the relevance of R&D intensity targets in a context of digital and AI-driven innovation. It also explored the impacts of the COVID-19 crisis on science, technology and innovation systems. The project provided practical policy guidance to countries.
The project was conducted by the Working Party on Innovation and Technology Policy (TIP). It used a mix of research methods and a cross-country analytical approach. Delegates to the TIP from Australia, Finland, France, Germany, Greece, Hungary, Ireland, Israel, Italy, Japan, the Netherlands, Portugal, Sweden, the United Kingdom and the European Union were part of the steering group that oversaw the project development.
The final launch event of the project "R&D policies for better post-pandemic futures: New approaches and tools" took place on 20-21 May 2021. The event was organised jointly by the OECD, the Ministry of Economic Affairs and Employment of Finland, and the VTT Technical Research Centre of Finland.
ACTIVITY 1. COUNTRY POLICY EXPERIENCES IN TARGETING R&D INTENSITY
With R&D intensity targets in place for up to two decades in certain countries, there is extensive policy evidence to understand better the country experiences in defining and reaching R&D targets, and to evaluate whether this is the best measure to assess the innovativeness of an economy. Through an in-depth investigation of the main priorities and related quantifiable targets set in national STI strategies, as well as a number of case studies conducted by countries, this module explored policy approaches to support R&D. Special emphasis was placed on examining how regional disparities and changes of the digital age have been taken into account during target setting and implementation, as well as what possible complementary policies are needed to increase R&D.
COUNTRY CASE STUDIES
Eleven case studies were produced in the context of the OECD project on R&D intensity. They explore the policy experiences in fostering public and private investments in R&D in the following countries:
This synthesis report presents an overview of key lessons learned from countries’ policy experiences in using (or not using) the R&D intensity target over the past decades, building on insights from the 11 case studies produced in the context of the project.
The report explores the rationale for setting R&D intensity targets and the characteristics of the R&D intensity indicator. Some of the takeaways from the 11 cases studies include the following:
The report was released during the project final launch event.
ACTIVITY 2. EXPLORING THE IMPACTS OF COVID-19 ON STI SYSTEMS
Science, technology and innovation (STI) have played a key role in responding to the COVID-19 pandemic and the unprecedented socio-economic crisis it has triggered. In turn, the crisis has affected the activities of universities, research centres, innovative businesses and entrepreneurs. This project module explored the impacts of the crisis on STI systems in the short term and longer term. It also analysed the immediate policy responses provided by countries, and explored how STI policy may evolve after the crisis, in view of new needs and demands, and the insight gained through policy experimentation during the crisis.
SHORT TERM IMPACTS
This paper explores:
Find the policy paper here.
LONG TERM IMPACTS
This paper discusses:
Find the paper here.
ACTIVITY 3. R&D PERFORMANCE AND REGIONAL (AND OTHER) DISPARITIES
National R&D intensity is an aggregate measure of all R&D investments in a country, and thus does not reflect geographical, sectoral and firm disparities. High levels of R&D intensity could thus be driven by the concentration of research excellence in a few specific locations (such as Silicon Valley) or leading firms, or by a more dispersed distribution of R&D activities across innovation ecosystems. By means of quantitative and qualitative analysis, this module investigated how equal or unequal distribution of R&D activities across regions relates to aggregate national R&D intensity levels and theimplications of those disparities on socio-economic policy objectives.
WORKSHOP ON INNOVATION DISPARITIES
The workshop was held at the OECD in Paris on 19 June 2019. It brought together about 100 policy makers and experts from academia and industry to discus about disparities in innovation performance across regions, research organisations and firms, the impacts of the digital transformation on such disparities, and the implications for innovation policy.
POLICY PAPER ON THE CONCENTRATION OF INNOVATION ACTIVITIES
This paper investigates how digital technologies have shaped theconcentration of inventive activity in cities across 30 OECD countries. It finds that patenting is highly concentrated: from 2010 to 2014, 10% of cities accounted for 64% of patent applications to the European Patent Office, with the top five (Tokyo, Seoul, San Francisco, Higashiosaka and Paris) representing 21.8% of applications. The share of the top cities in total patenting increased modestly from 1995 to 2014. Digital technology patent applications are more concentrated in top cities than applications in other technology fields. In the United States, which has led digital technology deployment, the concentration of patent applications in top cities increased more than in Japan and Europe over the two decades. Econometric results confirm that digital technology relates positively to patenting activities in cities and that it benefits top cities, in particular, thereby strengthening the concentration of innovation in these cities.
Find the policy paper here.
ACTIVITY 4. WHAT IS THE RELEVANCE OF R&D INTENSITY TARGETS IN THE DIGITAL AGE?
Digital technologies are transforming innovation practices. Data has become a key input for innovation, and there are more opportunities for services innovation, among other changes. Yet major innovation activities in the digital age, such as software and business model innovation, are not fully captured in R&D investment statistics. In view of such changes, this module explored what the relevance of R&D intensity targets in the digital age is, and what alternative or complementary measures could be.
The project outputs of this module are:
To an ever-increasing extent, innovation is digital. Most innovations today are new products, processes or business models at least partly enabled by digital technologies or embodied in data and software. Innovation processes themselves are changing in an era of digital transformation, with the use of AI-based analytics that allow for large-scale experiments in research and new virtual simulation and prototyping techniques for developing new products.
The report Digital Innovation: Seizing Policy Opportunities describes how the digital transformation is changing innovation processes and outcomes, highlighting general trends across the economy and factors behind sector-specific dynamics. In view of such changes, the report evaluates how policy support to innovation should adapt and in what directions. It also explores novel innovation policy approaches implemented by countries to promote digital technology adoption and collaborative innovation.
The report summarises the main findings of the OECD TIP project on digital innovation (2017-18). More information about the project can be found here.