Digital Innovation

Seizing Policy Opportunities

image of Digital Innovation

This report discusses how the digital transformation – digital technologies, data and software, AI-based analytics and other advances – is changing innovation processes and outcomes. It highlights the general trends across the economy and factors behind sector-specific dynamics, including increasing use of data as a key input for innovation, the expanding possibilities for experimentation offered by virtual simulation, 3D printing and other digital technologies, and the growing focus on services innovation enabled by digital technologies.

In view of such changes, this report evaluates how innovation policies should adapt to foster innovation and inclusive development in the digital age, and identifies priority areas for policy action. It also explores novel innovation policy approaches implemented by countries to foster digital technology adoption and collaborative innovation.


Characterising innovation in the digital age

This chapter discusses how innovation is changing in the digital age. It begins by looking at the ways in which digital technologies have lowered the cost of producing and disseminating knowledge. That dynamic has led to four key changes in innovation practices and outcomes that are explored in detail: data are becoming a key input for innovation; there is an increasing focus on services innovation enabled by digital technologies; innovation cycles are accelerating, as the possibilities for experimentation and versioning expand; and collaboration is becoming a more critical component of innovation. The chapter also discusses the effects of such changes on market dynamics and the distribution of rewards across businesses, individuals and regions.


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