OECD Secretary-General

Better innovation policies for better lives


Global Forum on the Knowledge Economy, 12-13 September 2011

Opening Remarks by Angel Gurría, OECD Secretary-General

Paris, 12 September 2011
(As prepared for delivery)


Ladies and Gentlemen:
It is a great pleasure to open the Global Forum on “Better Innovation Policies for Better Lives”.

This Global Forum couldn’t be more timely. The world economy is confronting very serious challenges. Governments are struggling to find a balance between fiscal consolidation and growth stimulus, in a context of tragic unemployment numbers, private investment retrenchment, market turbulence and limited space for monetary and fiscal policy.

Where do we go from here? How can governments promote sustained growth and employment in such a challenging context? We believe innovation can do a part of the trick. Let me tell you why.

Innovation: an essential ingredient for rebooting growth

Just last week, we released our Interim Assessment on the Economic Outlook for the world economy. I’m afraid the picture isn’t too rosy. In many countries, economic activity has come close to stagnation, consumer and business confidence has fallen, world trade has weakened, and unemployment levels of 10% -20, 30, even 40% when you refer to the young- are still plaguing our economies.

How do we move out of this dead end? How do we restart growth when our monetary and fiscal weapons have run out of bullets? We are convinced that the only way to restart our economies and get our people back to work is by going structural. Governments should focus their efforts on promoting and implementing structural reforms in strategic areas like education, health, labour and product markets, competition, taxes, green growth and, last but certainly not least, innovation. This is one of the areas in which structural reforms can produce more gains, more investments, more jobs.

We must reboot our economies with a more intelligent type of growth, driven by new start-ups, innovative small and medium enterprises. We need new ideas, new entrepreneurs, new business models. We need renewable energies and green technologies to move to a low-carbon era. And it is imperative that we create new jobs and reduce the disparities in our economies.

With this in mind, the OECD launched an Innovation Strategy which is already helping Governments face some of these challenges. Its three-year preparation was a comprehensive effort to identify the tools needed for governments to build coherent and far reaching innovation policies.

We found that innovation should go beyond supporting science and technology (S&T). Countries need whole-of-government innovation strategies, aligning different Ministries, policies and reforms around a nation-wide “innovation effort”.

Knowledge and innovation have much to do with skills. Thus, innovation, education and skills go hand in hand. Such policies do not only boost growth, they also boost employment, improve people’s employability and offer them new perspectives. This is crucial. We need to put our citizens, our people in the centre of our policy efforts.

Greening Growth with Innovation

In today’s world, well-being is no longer a choice between a growing economy and a cleaner planet, it is about both.

Indeed, in the 20th century, the world population grew 4 times, economic output 22 times and fossil fuel consumption 14 times. This puts the resilience of a wide range of environmental systems to the test. It affects human health and well-being. But since the Rio Earth Summit almost twenty years ago, we have known that green and growth go together.

So, why bring green growth up now? Let me give you a simple answer: it is about making it happen. At our 50th Anniversary Ministerial we unveiled OECD’s Green Growth Strategy to assist policy makers and stakeholders to address the major global environmental challenges, while expanding economic opportunities.

The Strategy encompasses both policy recommendations to make economic growth “greener” and a set of indicators to monitor progress towards green growth. Thus, the strategy is first and foremost about implementing change and achieving a common purpose: a world that is safer, cleaner, and healthier.

Innovation is a key pillar of green growth. It helps to decouple growth from natural capital depletion. It addresses knowledge gaps and fosters new technologies that can help the transition towards greener growth. It is absolutely central in enabling green and growth to go hand-in-hand.

Today we are launching a report on Fostering Green Innovation, which feeds into our Green Growth Strategy. The report gives guidance to policy makers on how to step up their innovation efforts towards a greener future.

Innovation policies have become a strategic instrument to promote inclusive growth, to promote development.

Innovation for Inclusive Growth Worldwide

Inclusive growth must become a priority for policy makers. In the past decades, we have made some progress in addressing global poverty and inequalities. However, the economic crisis, exacerbated by high food and energy price volatility, has had a very negative impact on our efforts to address these twin challenges.

Various estimates suggest that up to 84 million more fell into, or were trapped in, extreme poverty because of this crisis. The current levels of unemployment will keep having a perverse effect on human development in the years to come, as most of the impact is suffered by youth.

From now on, any policy decisions must be scrutinised in terms of their effect on development and poverty reduction. Innovation policy can be of great help.

This is why it is great to see that the role of science and innovation for inclusive development is on tomorrow’s agenda. Innovation can be a highly effective driver of development. Let me give you the example of a company in Kenya - Safaricom - which transformed SMS texting on mobile phones into a virtual banking service, allowing migrants to send money via SMS without needing a bank account.

At the OECD, we are putting our policy knowledge and experience to the service of development. Our interaction with developing countries has never been greater. We are in the process of preparing a Development Strategy, which will include innovation for development. This is a huge challenge for humanity, and it is another policy area where innovation can make a tremendous contribution.

Ladies and Gentlemen:
In the words of Benjamin Franklin, “an investment in knowledge always pays the best interest.”
The OECD @ 50 strives to deepen our knowledge, to improve the prospects of growth and welfare in Member and partner countries, to encourage civic participation and equality of opportunities, and to realign the economy with the environment. I am happy to see that many of these issues feature prominently on your agenda and I am sure that your discussions will produce many creative and innovative ideas.

So, let’s kick off this Global Forum and, following Franklin’s advise, and secure the best interest we can get – let’s invest in “Better Innovation Policies for Better Lives.”
Thank you.


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