In the context of the annual OECD Global Forums on Trade, the OECD Trade and Agriculture Directorate organised a conference on trade, innovation and growth. The event took place in the OECD offices in La Défense, Paris, on 15-16 October 2007. Participation was by invitation only and was welcomed from both OECD and non-OECD economies.
Innovation and technological progress is a key determinant of economic growth. Much of the economic growth and rise in living standards in the post World War II era is due to advances in technology and increase in innovation. Continued economic growth depends on our ability to maintain the current levels of innovation.
Economic theory suggests that exposure to foreign technology, trade and investment can lead to dynamic gains aside from the classical trade benefits arising from more efficient resource allocation and increased specialisation. Trade and investment are important conduits for the international transfer of technology and enhance competition, which in turn affects the incentives to innovate. Furthermore, exports extend the size of the market over which margins can be earned. The internationalisation of R&D, the emergence of global value chains, the rise in offshoring/outsourcing (also referred to as "trade in tasks") and changes to business models triggered by these emerging trends, may have implications for trade policy.
While the role of trade in innovation is acknowledged, the effect of open trade and investment regimes on the performance of innovation systems is often overlooked, as the relationship between trade and innovation is still imperfectly understood.
The objective of this Global Forum was to trigger a fruitful dialogue between OECD and non-OECD economies on the issue of trade, innovation and growth – or how trade and open markets affect the innovation process and how trade policy can be used to help provide the right framework conditions for innovation. This is a new subject of considerable importance for both developed and developing economies.
The conference discussions and inputs from government representatives, academics, industry representatives and other experts both from developed and developing countries will be reflected in a study undertaken by the OECD Trade and Agriculture Directorate which is to be completed in mid-2008. It will also feed into the OECD Innovation Strategy that the Organisation is undertaking as a follow-up to the discussions of the 2007 OECD Ministerial Council Meeting.