OECD Economics Department Working Papers
Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
- ISSN: 18151973 (online)
- https://doi.org/10.1787/18151973
Upgrading Japan's Innovation System to Sustain Economic Growth
Increasing productivity growth through innovation is a key to raising living standards. Although R&D
intensity in Japan is the third highest in the OECD area, the benefits do not appear to have been
commensurate with the level of investment. The innovation system, which developed during the catchingup
process, is largely input-driven and focused on incremental innovation based on closed and stable
corporate and employment systems. However, this approach is less appropriate in the current global
environment that favours risk-taking and a more open system relying on external linkages. To improve the
innovation system, a broad-based strategy is needed, including a reform of framework conditions in the
product and labour markets to strengthen competition and mobility, enhance international R&D links and
improve the environment for venture business. Education and public research should be upgraded through
stronger competition. The effectiveness of science and technology policy should be increased by
strengthening its link to economic framework policies.
This Working Paper relates to the 2006 OECD Economic Survey of Japan
(www.oecd.org/eco/surveys/japan).
Keywords: intellectual property, service sector, product market competition, venture capital, Third Basic Plan, R&D system, science and technology, regulatory reforms, ICT, tertiary education, innovation, technological change, Japan, patents
JEL:
O53: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Economywide Country Studies: Asia including Middle East;
O39: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Technological Change: Other;
O33: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Technological Change: Choices and Consequences; Diffusion Processes;
O34: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Intellectual Property and Intellectual Capital;
O31: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Innovation and Invention: Processes and Incentives;
O38: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Technological Change: Government Policy;
I2: Health, Education, and Welfare / Education and Research Institutions
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