27/10/2008 - OECD governments should increase international co-operation and strengthen links between public research bodies and industry in order to boost science and innovation and drive long-term growth, according to a new OECD report.
OECD Science, Technology and Industry Outlook 2008 reviews trends and developments in science, technology and innovation policy in OECD countries and six emerging economies, including China, Israel and the Russian Federation.
Emerging economies account for a sharply growing share of global spending on research and development (R&D), up from 11.7% in 1996 to reach 18.4% in 2005, the most recent year for which data are available.
While the United States remains the world’s leading investor in R&D, spending USD 344 billion in 2006, its share in global R&D has been falling due to weak business spending on R&D. The share of the EU-27, which includes France, Germany and the UK, has also declined.
China’s spending on R&D in the business sector as a percentage of GDP, known as R&D intensity, has increased rapidly from 0.25% of GDP in 1996 to 1.01% in 2006, almost catching up with the EU-27 business intensity of 1.11%. In real terms, this represents an annual increase of 20% in China over the past decade compared with 3% R&D growth in the business sector in both the EU-27 and the US.
Looking ahead, the report notes, future global investment will depend in part on the longer-term impacts of financial market instability on business spending, which accounts for most R&D investment by OECD countries.
Reviewing the different challenges facing OECD countries to foster innovation, OECD Science, Technology and Industry Outlook 2008 says that a number of key themes emerge that need tackling urgently. These include:
• Increase co-operation with foreign firms and governments. OECD countries must strengthen capacity to attract foreign investment and foster participation in global innovation networks.
• With growing demand for skilled workers and growing competition for foreign talent, OECD countries will need to improve policies to foster talent in the domestic economy.
• Innovation in firms goes considerably beyond technological innovation and also includes process, organisational and marketing innovation; policies to foster innovation will need to expand to capture the full range of innovation activities.
To help countries advance their policies for science and innovation, the OECD is currently elaborating an Innovation Strategy, based on a mandate endorsed by Ministers in 2007.
Science, Technology and Industry Outlook 2008 is available to journalists on the OECD's password-protected website. For further information, journalists are invited to contact the OECD's Media Division (tel.  1 45 24 97 00). More detail, including the country profiles for 36 countries, is available at www.oecd.org/sti/outlook