Long abstract

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OECD economies are simultaneously experiencing a wave of technological change, intensified international interdependence, and social cohesion problems caused by prolonged unemployment or stagnant wages and incomes in parts of the population. Technology is increasingly seen as the main source of long-term growth. It is a major force for the transformation of economies, for growth in productivity, as well as for the creation of jobs and an enhanced quality of life. It is also the fundamental driving force behind globalisation, which represents a huge potential for gains from intensified exchange, specialisation and learning across countries. At the same time, technology is widely blamed for the destruction of jobs. Together with globalisation, the development and widespread introduction of new technologies are indeed a main factor behind the upgrading of skill levels required for jobs, and the weakening of the position of less skilled workers. They contribute to increased unemployment for such workers and/or widening income differences. The expectations and behaviour of firms that directly underlie innovation and technology diffusion are influenced by a range of policies. The perception of what governments can and should do in respect to technology is changing, however. This is a consequence of a better understanding of innovation processes and the increasing importance of technology diffusion, as well as of the new economic conditions resulting from globalisation, regulatory reform and budgetary constraints. So far, reforms of existing policies in the technology field have been limited, however. While it is important to pursue reforms, their feasibility and success hinges on ensuring that the benefits of technical change meet broad-based social expectations. This project represents a contribution to the reform of innovation and technology policies, so as to make them more effective, and more in tune with broader changes in the economic environment. Such policies in OECD Member countries have not yet fully adapted to the transformation underway in our economies, and to the greater role played by technology and globalisation. Innovation and technology policies continue to be seen in isolation from other structural policies, for example human capital development or regulatory reform. The economic impact of technology is still often viewed as being determined only by the performance of technology-intensive manufacturing industries, although it increasingly depends on how technology is diffused and exploited in broad areas. The policy instruments used also are not always appropriate to the objectives of policy, and there is still insufficient hard evaluation of their impacts. A number of countries have nevertheless made important reforms, which can be said to constitute "best practices" in the area. An international comparison and evaluation of different approaches and instruments is therefore needed to stimulate and guide reform in the whole OECD area.