Innovation and Growth

Chasing a Moving Frontier

image of Innovation and Growth

Innovation is crucial to long-term economic growth, even more so in the aftermath of the financial and economic crisis. In this volume, the OECD and the World Bank jointly take stock of how globalisation is posing new challenges for innovation and growth in both developed and developing countries, and how countries are coping with them. The authors discuss options for policy initiatives that can foster technological innovation in the pursuit of faster and sustainable growth.


The various chapters highlight how the emergence of an integrated global market affects the impact of national innovation policy. What seemed like effective innovation strategies (e.g. policies designed to strengthen the R&D capacity of domestic firms) are no longer sufficient for effective catch-up. The more open and global nature of innovation makes innovation policies more difficult to design and implement at the national scale alone. These challenges are further complicated by new phenomena, such as global value chains and the fragmentation of production, the growing role of global corporations, and the ICT revolution. Where and why a global corporation chooses to anchor its production affects the playing field for OECD and developing economies alike.

Selected as a 2009 Notable Document by the American Library Association Government Documents Round Table.

English Spanish


Competition, innovation and growth

theory, evidence and policy challenges

Product market competition is essential to the growth process but how much it affects innovation depends upon how technologically competitive the incumbent firm is. What are the guiding principles for pro-competition policies to spur growth?

- Conventional wisdom: competition exerts downward pressure on costs, reduces slack, provides incentives for efficient organisation of production.

- The Schumpeterian alternative: the only effective form of competition is innovation; antitrust measures reduce the reward to innovation.

- Rethinking Schumpeterian theory – an inverted U.

- Policy lessons from the ABHV model.

- Six principles for promoting competition in developing countries.

Conclusion: as you approach the frontier, appropriate policy changes.


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