In May 2007, OECD Ministers mandated the preparation of an OECD Innovation Strategy. The strategy has two broad aims: first, addressing countries’ needs for a more comprehensive, coherent and timely understanding of how to promote, measure and assess innovation and its underlying dynamics of change; and, second, shedding light on appropriate multi-sector and whole-of-government approaches to innovation as a driver of sustainable growth, productivity and development and as a tool to address global challenges. Work on the strategy is to take place over 2008-2009, with a synthesis report to be delivered to the OECD Ministerial Council meeting in 2010.

This paper forms part of the first phase of work on the OECD Innovation Strategy. It draws on OECD work from the last ten years to provide a broad-brush overview of “what we know” about good policy practices for innovation. It also highlights recent changes in innovation processes and patterns, describes the increasing levels of internationalisation, and draws together early thinking on the contribution of innovation to solving global challenges related to the environment.

The stocktaking highlights that much work, both theoretical and empirical, has already been done to identify the policies, institutions and framework conditions that can provide the most effective means of supporting innovation. However, evaluation of specific government support policies and their impacts on innovation is generally sparse and there is a need for more and better evidence on the costs and benefits of government support for innovation. Measurement of innovation is also an area where further work is likely to yield benefits, particularly in better understanding innovation in the service sector and better capturing the increasingly international nature of innovation activities. Finally, forming a robust approach to the governance arrangements around multi-country challenges, such as climate change and water, will be essential to leverage the impact of national efforts and ensure all countries can gain from the fruits of innovation.