Slide 1

Innovation Systems and Development Strategies Thomas Andersson Santiago, Chile 13 May 2004

Slide 2

IKED IKED addresses the emerging issues of the knowledge-based economy (KBE), with a holistic view and a cross-sectional approach Bridges between research/analysis and policy-making Has a Nordic base, leveraging the Nordic regions strength in KBE as well as the Nordic need of learning from others to confront current challenges Has a global reach working with countries and institutions, aiming for concrete reforms Has partners/clients ranging from the most advanced to transition and least developed economies Collaborates with and includes all key stakeholders, including the private sector and consumer side, in its activities/projects in order to promote contructive dialogue and concrete results

Slide 3

IKED Integrated Approach Integrity and internal analysis Networks between government, business and experts Direct involvement in key reform processes Policy fora with continuous exchange and international impetus

Slide 4

Flagship Publications 2004 ASEM Proceedings: Globalisation and ICT: The Role of Government, Private Sector and Civil Society in an Information Society for All World Competitiveness Proceedings: Innovative Clusters A New Challenge Towards a New Growth and Innovation Policy in Norway Towards Effective Policies for Innovation and Enterprise in the Baltic Sea Region Handbook for Evaluation of Innovation Policy Flagship Conferences organized/co-organized by IKED 2003-2004 Future Nordic Welfare Society (Stockholm, February 5, 2003) An Information Society for All, ASEM (Malm, March 10-12, 2003) The Competitiveness Institute (Gothenburg, September 15-17, 2003) Baltic Development Forum (Riga, October 5-7, 2003) World Knowledge Forum (Soeul, October 15-17, 2003) Virtual Opportunity Congress (Sydney, December 16-17, 2003) INSME Roundtable (Malm/Helsingborg, February 25-27, 2004) Measuring and Analysing Digital Divides (Beijing, March 24-26, 2004) Welfare policies in the Era of Globalisation (Havana, April 26-29, 2004)

Slide 5

Source: UNCTAD, World Investment Report 2002. Manufactured exports share in world exports by technology groupings

Slide 6

Source: ITU (2002). The Digital Divide and ICT Infrastructure

Slide 7

IKEDIKED 2004 Broadening basis for growth Room for higher productivity - R&D and ICT can generate higher labor productivity and TFP - Synergy effects/enabling conditions - Favorable cross-border resource flows - Using time better: hours worked, life-long health - Encompassing SMEs - Regional and sectoral broadening - Untapped potential population groups: immigrants, women, minorities -

Slide 8

Supply: Science, R&D Demand: Market Ideas technologies Innovations Scientists Clients Contractors Competitors INNOVATION SPIRAL Increased potential both directions through ICT

Slide 9

Improving exchange mechanisms among actors Universities Society Individuals Companies Reward Building new companies Skills Competitive intelligence Product development Entrepreneurship Environmental sustainability ICT-infrastructure Career Conditions for competition University/ Private sector cooperation Labour markets Education Social capital Applied research IPR Tax systems Venture capital Financial markets Demand for knowledge Strengthening framework conditions to support innovation processes Innovations, Commers- ialisation Growth and welfare Actors

Slide 10

SWEDEN FINLAND USA JAPAN SWITZERLAND WORLD FINLAND US SWEDEN CANADA KOREA DENMARK SINGAPORE AUSTRALIA KOREA NETHERLANDS ICT Weighted country positions Innovation Tentative, based on international estimates

Slide 11

Investment in knowledge assets, % GDP 2000 0 2 4 6 8 MexicoGreecePortugalItaly Spain Hungary Ireland Czech RepublicAustria EU Belgium AustraliaUnited KingdomNorwayFrance Germany Netherlands Denmark OECD JapanCanada Switzerland FinlandKorea United StatesSweden % R&DSoftwareHigher Education IKEDIKED 2004

Slide 12

Government role in R&D varies considerably across countries, % of GDP 2000 IKEDIKED 2004

Slide 13

Selected variables Innovation System

Slide 14

Barriers to entrepreneurship Source: OECD IKEDIKED 2004

Slide 15

GDP-growth and entrepreneurship U.S. U.K. Switzerland Sweden Spain Portugal Norway Netherlands Luxembourg Japan Italy Ireland Iceland Greece Germany France Finland Belgium Denmark Austria 0 1 2 3 4 5 6 7 456789101112131415 Start-up Rates, 1988-96 GDP Growth, 1989-99 Source: OECD Source: OECD, 2001

Slide 16

Application of Rule of Law Varies by Region (based on aggregation of surveys/polls 1997-99*) OECDEast Asia Middle East South Asia Eastern Europe Latin America Sub- Saharan Africa Former Soviet Union High Index of Rule of Law Appli- cation Low Index Source: Kaufmann, Kraay and Zoido-Lobaton (1999). "Aggregating Governance Indicators" and "Governance Matters" PWRP 2195 and 2196. http://www.worldbank.org/wbi/governance

Slide 17

Patents invented in collaboration with foreign inventors (%) Share of scientific publications with a foreign co-author (%) 0 5 10 15 20 25 30 Japan EU Italy Germany United States France OECD United Kingdom Canada 1985-87 1993-95 0 5 10 15 20 25 30 35 40 Japan EU United States OECD United Kingdom Canada Germany France Italy 1981 1995-97 International co-operation in S&T IKEDIKED 2004

Slide 18

Bilateral Investment Treaties , 2003 Source: UNCTAD Source: UNCTAD, 2003

Slide 19

Challenges for National FDI Policies Maximizing benefits of FDI Minimizing negative effects of FDI Attracting FDI Development objectives

Slide 20

Coordination to put in place comprehensive innovation policy Appropriate mechanisms for public funding of R&D Science-industry interplay: incentives for university and scientists to work with industry, upgrading science parks and incubators Reforms to strengthen conditions for provision of micro-funding and better functioning venture capital markets Valuing knowledge, competence upgrading in SMEs, enabling meeting specific needs through internal upskilling or strengthened networking with regard to external competence Plugging into global knowledge networks while underpinning traditional skills through institutional support Intensifying policy challenges

Slide 21

Scientists Innovation Policy Positioning: Traditional Research Education Industry Finance Trade Etc. Labour Unions Firms NGOs Environment I.P.

Slide 22

Scientists Innovation Policy Positioning: Implicit Research Education Industry Finance Trade Etc. Labour Unions Firms NGOs Environment

Slide 23

Scientists Research Education Industry Finance Trade Etc. Labour Unions Firms NGOs Environment Innovation Policy: Explicit positioning I. P.

Slide 24

Scientists Research Education Industry Finance Trade Etc. Labour Unions Firms NGOs Environment Innovation Policy: Explicit Positioning I. P.

Slide 25

Inward FDI stock, 2002 Note: The size of the region/country's box reflects the size of the FDI stock. Source: UNCTAD

Slide 26

Slide 27