Demand-side Innovation Policies

image of Demand-side Innovation Policies

Demand-side innovation policies have been receiving increasing interest from a number of OECD countries in recent years in the context of slow growth and lagging productivity performance. Pressures on fiscal budgets in the aftermath of the financial crisis have also motivated governments to seek ways to boost innovation without necessarily engaging in new programme spending, primarily to meet social demands in areas such as health, energy or the environment.

This book examines dynamics between demand and innovation and provides insights into the rationale and scope for public policies to foster demand for innovation. It shows the potential - but also the limits - of using public procurement, regulations or standards to stimulate public and private demand for innovation, including among SMEs. Drawing on country experience and case studies, this report illustrates good practices for designing, implementing and evaluating demand-side innovation policies.

English Also available in: Chinese

Demand-side innovation policies and instruments

Recent trends in innovation policy place growing emphasis on demandside policies and instruments. A number of OECD countries, from the United Kingdom to Finland, Spain and Japan, as well as the European Commission, have made explicit policy statements on the need to give greater importance to demand-side innovation policies. Japan, for example, has recently re-oriented its innovation strategy towards a series of demandoriented national goals such as the transition to a low-carbon economy and tackling the challenges of an ageing society. Finland has adopted a general plan for demand-side innovation – The Finnish Policy Framework and Action Plan for Demand and User-Driven Innovation Policy (2010). And the United Kingdom’s plan, Innovation Nation (2008), introduced demand-side initiatives affecting public procurement and regulation. Spain is currently implementing the State Innovation Strategy (2010) which has a programme oriented towards public procurement. Demand-side innovation policies are now increasingly integrated in the full portfolio of government policies on innovation in a number of OECD countries.


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