Conference on the knowledge base for research and innovation policy by Andrew Wyckoff, Director for Science, Technology and Innovation at the OECD

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THE OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016

Andrew WyckoffDirector, Directorate for Science, Technology and Innovation

OECD

2 March 2017

Oslo Norway

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Science, Technology and Innovation Outlook 2016

“What’s new in the field of science, technology and innovation policy? “

International review based on latestpolicy information and indicators

Unique policy questionnaire

A 20-year tradition. Every 2 years.

New in 2016’s edition:

10-15 year horizon scan

Megatrends for STI

Key emerging technologies

Future research systems

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ONLINE CONTENT

~ 40 policy profiles

Cross-country comparison of key STI policy orientation,

instruments and governance

Polic

y Pr

ofile


BOOK and eBOOK

Megatrends for STI

Future technology trends

The future of science systems

Recent trends in STI policies

International benchmarking and recent national STI policy

developments

52 country profiles

ONLINE CONTENT

STI e-Outlook

STI Policy mapping Statistical platform

ONLINE INFRASTRUCTURES

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Main messages of the STI Outlook 2016

• We’re facing pressing, global challenges• From climate change to growing inequalities

• STI can contribute to solutions• Need to harness some of the emerging S&T forces

• But they won’t happen automatically and there’s no guarantee they’ll contribute to solutions – they could even make matters worse

• Technology development and diffusion needs to be open• International, citizen-oriented, interdisciplinary, public-private

• Public research plays pivotal roles• Yet public R&D budgets are falling• Will the promises of a more open science be realised?

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Megatrends& Technology

Trends for STI


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8 Megatrends for STI

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Big challenges lay ahead (1)

Unsustainable growth• Climate change and environmental degradation

• Resource depletion How can we meet this target?

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Ageing societies• Rising costs of health

and social care• Higher dependency

ratios• Slower economic

growth is likely

Productivity slowdown• Declines in knowledge-based

capital investments, which underpin innovation-based growth

• Slowing of the pace at which innovations diffuse through economies

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Growing inequality• There are widening income

distribution and wealth gaps, a trend projected to continue

• This undermines social mobility

• And poses major political, social and economic risks

Too few (good) jobs?• Further hollowing-out of

employment and wages?• A growing precariat working in

non-standard jobs• Risks from rapid automation

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Geopolitical transition• Big changes afoot in

economic power and populations

• A more multi-polar world will generate growing uncertainties in the international system

• Spectre of rising protectionism?

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What do these challenges mean for STI?• Changing demand for innovation

• Ageing societies, areas of population growth (esp. Africa) and a growing middle class (esp. Asia) will impact demand

• New opportunities for citizens to be engaged

• Changing supply factors• Environmental challenges => STI for less resource-intensive production

and a circular economy

• Different skills are needed => STEM, but many complementary skills

• Shift in the nature of capital => More intangible capital

• Grand challenges that need to be addressed• Science and innovation will need to make an important contribution

• Highlights the need for interdisciplinarity, international R&D cooperation, international technology diffusion, public-private partnerships – but a risk of declining government funding.

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Trends for STI


Urgency of policy action

Science and innovation are key

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A large number of technologies are emerging

Emerging technologies

Internet of Things

Big data analytics

Artificial intelligence

Neurotechnologies

Nano/microsatellites

Nanomaterials

Additive manufacturing

Advanced energy storage technologies

Synthetic biology

Blockchain14

10 disruptive technologies for the (near?) future

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Digital technologies (1)

Internet of Things• Reduce electricity waste through smart grids that

utilise real-time energy use information

Big data analytics• Deliver better healthcare through monitoring and predictive

analytics that enable preventive medical interventions

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Digital technologies (2)

Artificial intelligence• Address the needs of ageing

societies through AI-enabled social robots that assist the elderly physically and psychologically

Algorithmic trading as a share of total financial trading in the US

Blockchain• Prevent corruption and boost

efficiencies in the public sector by creating and maintaining trustworthy registries of value transactions

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Energy and environment

Advanced energy storage technologies• Allow more energy to

be sourced from renewables by balancing power fluctuations

Micro- and nano-satellites• Improve crop

productivity in countries where large satellites are too expensive to deploy

Maturity of energy storage technologies

Source: IEA (2014), “Energy storage”, IEA Technology Roadmaps, http://dx.doi.org/10.1787/9789264211872-en

0

100

200

300

400

500

600

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Number of satellites (1-50kg)

Historical launches Full market potential SpaceWorks projection

Launch history and projection for nano- and microsatellites, 2009-20

Source: SpaceWorks (2014), www.sei.aero/eng/papers/uploads/archive/SpaceWorks_Nano_Microsatellite_Market_Assessment_January_2014.pdf.

http://dx.doi.org/10.1787/9789264211872-en

http://www.sei.aero/eng/papers/uploads/archive/SpaceWorks_Nano_Microsatellite_Market_Assessment_January_2014.pdf

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Advanced materials

Additive manufacturing• Increase efficiency in production

through the integration of product design, manufacture and delivery

New materials: nanotech• Enhance medical diagnostics by

improving the sensitivity of tests and reducing the need for specialised equipment

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Biotechnologies

Neurotechnologies• Offer great promise in

diagnosis and therapy for healthy ageing and general human enhancement

Synthetic biology• Open up biotechnology to a

large number of innovators discovering and applying new applications

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How can we realise the potential of these technologies?

• Ensuring the benefits are widely distributed• Technology/knowledge diffusion and the scaling of technologies and

new firms are often as important as novel technology development

• Technological change creates winners & losers. Policy should address distribution effects, in particular in helping workers adjust

• Good governance• Emerging technologies carry several risks and uncertainties –their

governance is important

• Engaging citizens and stakeholders

• Support to research and innovation• Public research plays pivotal roles in underpinning all of these

technologies by producing new knowledge and nurturing skills

• But the linking of research and innovation, and the scaling and diffusion of innovations, are key too.

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Trends for STI


Capacity of governments to intervene?

Competing policy priorities and agendas (financial resources?)



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R&D has fallen behind other policy priorities in many countries

Source: OECD R&D Statistics (RDS) Database, April 2016, www.oecd.org/sti/rds; OECD National Accounts Database.

Government budget appropriations and outlays for R&D, as a % of total government expenditures, 2000 and 2015

http://www.oecd.org/sti/rds

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France

United Kingdom

Germany

Unites States

Sweden

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1981 1985 1989 1993 1997 2001 2005 2009 2013

Chinese Taipei

EU28

Mex ico

Norw ay

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1981 1985 1989 1993 1997 2001 2005 2009 2013

Denmark

Korea

Austria

Finland Iceland

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1981 1985 1989 1993 1997 2001 2005 2009 2013


Public R&D budgets are likely to plateau around current ratios

Government budget appropriations and outlays for R&D, as a % of GDP

Source: OECD R&D Statistics (RDS) Database, April 2016, www.oecd.org/sti/rds.



Could increasingly generous R&D tax incentives jeopardize our fundamental research?

Change in R&D tax costs (% annual growth) and the share of public support going to firms (% point) , 2006-14 or nearest years available

Source: Based on OECD R&D Tax Incentive Indicators, www.oecd.org/sti/rd-tax-stats.htm, July 2016; OECD Main Science and Technology Indicators, www.oecd.org/sti/msti.htm, June 2016; OECD R&D Statistics (RDS) Database, April 2016, www.oecd.org/sti/rds.

There is emerging evidence of more public support going to firms – and away from public research -

due to more generous R&D tax incentives

More support given to firms (and less to public research)

More generous tax concessions

http://www.oecd.org/sti/rd-tax-stats.htm

http://www.oecd.org/sti/msti.htm


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0

20

40

60

80

100Industry

High-techmanufacturing

High-knowledgemarket services

Primary andresource-based

industries

Large firms

Foreign affiliates

Services

Medium to low-techmanufacturing

Low-knowledgeservices

Non-resource-basedmanufacturing

industries

SMEs

Domestic firms

0

20

40

60

80

100Industry




industries

Large firms

Foreign affiliates

Services




industries

SMEs

Domestic firms

Source: OECD (2016), “Norway”, in OECD Science, Technology and Innovation Outlook 2016, OECD Publishing, Paris. DOI: http://dx.doi.org/10.1787/sti_in_outlook-2016-61-en

Business R&D is driven by large domestic industrial firms


Structural composition of BERD, 2013, as a % of total BERD performed by sector

Country Profile

0

20

40

60

80

100Industry




industries

Large firms

Foreign affiliates

Services




industries

SMEs

Domestic firms

OECD Norway Norway (2007)

http://dx.doi.org/10.1787/sti_in_outlook-2016-61-en

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Science, Technology and Innovation Outlook 2016Science, Technology and Innovation Outlook 2016

Most relevant policy instruments of funding for business R&D, 2016Country self-assessment, index (9 = high and increasing relevance to 0 = not used)

Source: Based on EC/OECD (forthcoming), International Database on STI Policies (STIP), https://www.innovationpolicyplatform.org/sti-policy-database

Country Profile

0123456789

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Competitivegrants

Debtfinancing andrisk-sharingmechanisms

Repayableadvances

Technologyconsulting

Innovationvouchers

Equityfinancing

Publicprocurement

Taxincentives for

businessR&D

Taxincentives forIP revenues

and otherprofits

Other taxbase

Norway OECD median

Direct funding Indirect funding

https://www.innovationpolicyplatform.org/sti-policy-database

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Public research has shifted towards universities …

Public R&D, OECD, % of GDP

Source: OECD Main Science and Technology Indicators (MSTI) Database, June 2016, www.oecd.org/sti/msti.

Higher education

Government

Funding by industry, OECD, USD million 2010 PPP

… that are increasingly relying on private funding

http://www.oecd.org/sti/msti

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The trend is poised to last: STI policy is focusing on immediate economic imperatives

and policy efficiency gains

Source: Based on EC/OECD (forthcoming), International Database on STI Policies (STIP), https://www.innovationpolicyplatform.org/sti-policy-database

STI policy priority index, 2016 compared to 2014


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Trends for STI


Capacity of governments to intervene?

Competing policy priorities and agendas (financial resources?)

Shaping future R&D and innovation policy agendas?

Opening science

Building international cooperation



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More responsible R&I policies encourage a greater intertwining of science and citizen

Policy mix for addressing societal challenges

Gender balance

Building an innovation

culture

New RRI governance arrangements

Percentage of policy initiatives newly introduced, substantially revised or repealed over the period 2014-16

Source: Based on country responses to the EC/OECD (forthcoming), International Database on STI Policies (STIP), https://www.innovationpolicyplatform.org/sti-policy-database


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Science, Technology and Innovation Outlook 2016Open science is on the march

Number of papers, 2000-13

Source: Based on Laakso, M. and B.-C. Björk (2012), “Anatomy of open access publishing: A study of longitudinal development and internal structure”, BMC Medicine, Vol. 10, p. 124, http://www.biomedcentral.com/1741-7015/10/124, and website of the Open Access Scholarly Publications Association (OASPA), http://oaspa.org/growth-of-fully-oa-journals-using-a-cc-by-license/.

http://www.biomedcentral.com/1741-7015/10/124

http://www.biomedcentral.com/1741-7015/10/124

http://oaspa.org/growth-of-fully-oa-journals-using-a-cc-by-license/

http://oaspa.org/growth-of-fully-oa-journals-using-a-cc-by-license/

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International knowledge networks are more diverse

Source: OECD (2013), OECD Science, Technology and Industry Scoreboard 2013: Innovation for Growth, http://dx.doi.org/10.1787/sti_scoreboard-2013-en.

Internationally co-authored articles


http://dx.doi.org/10.1787/sti_scoreboard-2013-en



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Highest expected citation impact of scientific authors by mobility profileBased on the median Scimago Journal Rank (SJR) score of 2013, mobility patterns over 1996-2013

Source: OECD (2015), OECD Science, Technology and Industry Scoreboard 2015: Innovation for growth and society, http://dx.doi.org/10.1787/sti_scoreboard-2015-en.

International mobility is a major channel for knowledge circulation, if not the first





Networks, clusters and transfers

ICT and Internet infrastructures Skills for innovation

Top half OECD

Bottom half OECD

100

0

200

150

50

b. Interactions and skills for innovationNetworks, clusters

and transfersICT and Internet infrastructures Skills for innovation

Top half OECD

Bottom half OECD

100

0

200

150

50

b. Interactions and skills for innovation


Normalised index of performance relative to the median values in the OECD area (Index median = 100)

Source: OECD (2016), “Norway", in OECD STI Outlook 2016, http://dx.doi.org/10.1787/sti_in_outlook-2016-61-en

Country Profile

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Top/Bottom 5 OECD values Middle range of OECD values OECD median Norway

Universities and public research R&D and innovation in firms

Innovative entrepreneurship

Top half OECD

Bottom half OECD

100

0

200

150

50

a. Competences and capacity to innovate



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http://oe.cd/STIOutlook

• Global megatrends and societal challenges highlight the need for some big solutions and radical changes, including in our STI policies.

• There is a risk of greater protectionism that could threaten future international cooperation for R&D and innovation and international mobility.

• At the same time, new and emerging technologies will have a deep impact on economies and societies. Although we can already anticipate their disruption, it is still difficult to know precisely what form and scale this will take.


• There are serious concerns about declining public funding for R&D and innovation, and the situation could deteriorate further with austerity and ageing societies.




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