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.

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The development of global innovation networks and the transfer of knowledge

Confronted with increasing global competition and rising research and development (R&D) costs, companies can no longer survive on their own innovation efforts. Their innovation activities are increasingly international, and they are embracing more “open” approaches – collaborating with external partners, whether suppliers, customers or universities, to keep ahead of the game. Multinational enterprises (MNEs), in particular, have increasingly shifted R&D activities across borders within their global value chain and rely on outside innovation for new products and processes. Non-OECD economies play a growing role in this internationalisation process and accounted for 40% of the growth of global R&D in recent years. Moreover, migration of talent now plays an important role in shaping skilled labour forces throughout the OECD area. This chapter examines the globalisation of innovation, its drivers and impacts, and examines how policy can draw greater benefits from the globalisation process.


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