Mario Cervantes OECD

1. Mario Cervantes OECD Innovation, Technology Transfer and STI Co-operation to address Global Challenges 17 March 2011

2. Outline • Role of innovation in economic growth • Globalisation of R&D and innovation • Knowledge Markets • STI c0-operation for global challenges

3. Innovation is key to growth... Contributions to labour productivity growth, 1995-2006, in % * Investment in intangibles and multi-factor productivity growth account for between two-thirds and three-quarters of labour productivity growth.

4. Decomposition of cross-country differences in GDP per capita into their determinants, 2005 (United States = 100) GDP PPP per capita TFP Human capital Physical capital Employment United States 100.0 100.0 100.0 100.0 100.0 Canada 83.5 72.0 103.3 105.8 106.0 Japan 72.6 52.6 100.4 130.7 105.1 China 9.8 13.6 57.3 105.2 119.5 India 5.2 12.7 47.7 98.3 87.1 Brazil 20.5 29.3 70.1 103.1 96.8 97.4 Russian Federation 28.6 31.5 84.9 99.3 EU27 + EFTA 64.7 67.8 91.2 114.1 91.3 Total World 22.8 27.9 64.2 104.2 95.8 Source: OECD. • …constitutes the major gap in GDP between OECD and emerging economies.

5. … and can help address global challenges such as climate change Potential technological contributions to CO2 emission reductions Note: WEO refers to the IEA’s 2007 World Energy Outlook. Source: International Energy Agency, Energy Technology Perspectives 2008: Scenarios and Strategies to 2050.

6. Policy can induce greater innovation Patenting in climate mitigation technologies relative to all sectors (indexed on 1980=1.0, Annex 1 ratification countries)

7. New global players have emerged … Contributions to growth in global R&D, 1996-2001 and 2001-2006 (in billion constant US PPP and %) Note: (1) Australia, Canada, Iceland, Korea, Mexico, New Zealand, Norway and Turkey (2) Argentina, Brazil, India, Israel, Russian Federation, Singapore, South Africa, Chinese Taipei Source: OECD.

8. R&D funding from abroad is important • About 10% of total R&D funding in EU27 in 2006 • Over 20% in Austria and the UK • 2/3 is intra-company funding

9. In some OECD countries, foreign affiliates carry out more R&D than at home

10. Rising international technology transfers Technological receipts and payments ,1996-2006 • EU15 transformed its technological deficit into a surplus • Japan increased its surplus by 6 times

11. But knowledge and technology are unevenly distributed…

12. Patenting rises ; increasing opportunities for technology transfer and exchange

13. Connecting to Global Research International cooperation mostly within OECD countries and among those with linked value chains or close proximity • 15% of patents filled in OECD countries are invented abroad • Small countries rely more on foreign sources • EU rely mainly on EU • Japan and Korea on the US

14. Foreign students within the OECD area have doubled over • International mobility of doctoral students up significantly in New-Zealand, Canada, Norway and in Spain. • International doctoral students are between 25% and 40% in Canada, France, Belgium, Australia and the United States.

15. Firms today no longer innovate in isolation … Then: Closed Innovation • Approach: “not invented here” • Innovation: • Strategy independent of overall business strategy • Performed in-house • Internal pool of innovators • Outputs: • Incorporated in firm’s products and services. • Product revenues finance next cycles of in-house R&D Now: “Open“ Innovation • Approach: “proudly found elsewhere” • Innovation: • Business strategy drives targets • Technology developed cooperatively or acquired • Work with many innovators and users/consumers • Leverage own IP • Outputs: • Both internalized and externalized (licensing, spin-offs, venturing)

16. … but collaborate on innovation internationally

17. Co-operation in science is increasing: co-authored S&T articles (whole count), 1997 and 2007 1997 2007

18. In sum…. • Deepening of the internationalisation of research • Deepening of R&D globalisation, but appears more sensitive to asynchronous business cycles and shocks • FDI and trade are important channels but their role in the creation of spillovers remains unclear • Mobility of human resources is major channel.

19. Clustering/regional proximity matter • Open innovation and open science are increasing • Role of absorptive capacity in capturing spill overs from trade and technology transfer, but how to support it?

20. One solution: Developing collaborative knowledge markets… • Knowledge markets encompass a number of different mechanisms, or marketplaces, where buyers and sellers trade a variety of knowledge intensive goods and services. • E.g.: IP exchanges, patent pools, networking, matching or brokering services

21. But also need for STI co-operation: a priority for OECD • High-Level Oslo Meeting (03 2008) of the Committee for Scientific and Technological Policy (CSTP) • to address global challenges multilateral STI cooperation is needed • existing policies and frameworks may not be sufficient to meet requirements • delegates recognized • the need to consider policies and rules affecting multilateral STI cooperation • the possibility that new or improved mechanisms are needed

22. Importance of STI for addressing global challenges • G8+7 Science and Technology Ministerial Meeting 15 June 2008 G8 countries and Brazil, China, India, Mexico, Philippines, Republic of Korea and South Africa • emphasis on the important role that science, technology and innovation have to play in understanding global challenges facing our society and in developing appropriate solutions to those challenges

23. Rationale for International cooperation in S&T for green growth • The global nature of the key challenges facing the mankind… • An emerging political consensus: Addressing global challenges (GCs) requires collective actions… • S&T and innovation must make an important contribution to addressing key global challenges…

24. Rationales for international cooperation in S&T for green growth • Lack of existing framework for multilateral cooperation (MC) in STI, • meanwhile emerging new approaches, players and initiatives needing government support • Uneven distribution of R&D resource and capacity and gaps between technology supply and needs

25. Objective of the work • identify principles and best practices for multilateral cooperation in STI • Enhance the effectiveness of multilateral STI to address global challenges such as • climate change • global health • food security and agriculture • energy security

26. Principles and best practices for… • Outreach, Agenda and Priority Setting • Funding and Spending Arrangements • Institutional and Access Arrangements • Putting Opportunities into Practice; translating science into innovative solutions • Technology transfer and capacity building

27. Approach • Case studies in meeting global challenges – successes and failures: • IPCC; CGIAR; GEO; EDCTP; GF AIDS, TB, Malaria; others… • Good practice in governance • Measurement of expenditure • Complement with analysis bilateral co-operation • Complete case studies work in 2010; Principles by 2012. • Steering Group - Australia, Austria, France, Germany, Korea, Norway, Spain, Turkey, UK,US, EU: Chile, China, Israel and South Africa

28. But we need some of the other big players involved…..so come join.Mario.cervantes@oecd.org