Innovation Policy and Performance

A Cross-Country Comparison

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This publication examines the relationship between innovation policy and economic performance in six OECD countries – Austria, Finland, Japan, the Netherlands, Sweden and the United Kingdom.  In-depth analyses highlight countries’ strengths and weaknesses in innovation, as well as the effectiveness of their innovation policies in driving economic performance.  Taken together, the country studies constitute a rich evidence base which will be of considerable interest to innovation policy makers in all OECD countries.  They indicate that countries share a need to adapt – or even profoundly change – their innovation policies in order to deal with opportunities and threats posed by new technological and economic developments.




The OECD Growth Project indicated that Japan’s economic performance sharply declined from the 1980s to the 1990s. Japan is categorised among those “countries where trend growth declined or stagnated”, and the decrease in the GDP per capita growth rate stands out from other countries that experienced decline or stagnation during these two decades (Figure 4.1) (OECD, 2001a). Other quantitative data also reflect Japan’s declining economic performance. Although annual Japanese GDP per capita in USD still exceeds the OECD average, the annual growth rate of GDP is the lowest of all, and the annual growth rate of multi-factor productivity (MFP) is far below OECD average (see Annex 2, Figure A2.3). On the other hand, Japan is ranked third among OECD countries in GERD as a percentage of GDP, and Japanese BERD as a percentage of GDP is the third highest. Also, in the data on R&D performed by the non-business sector as a percentage of GDP, Japan maintains a level exceeding the OECD average (Figure A2.3). Although it must be noted that there is some time lag between R&D investment and...


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