More spending needed in science, technology and innovation: OECD

"Science, Technology and Industry Outlook 2010" shows R & D shrinking from more than 4% in recent years to 3.1%

The Organisation for Economic Co-operation and Development (OECD) says in its latest annual report that OECD members and non-members must drive science, technology and innovation (STI) investment in order to contend with intensified global competition and bolster long-term growth. STI offers societies the potential to tackle the myriad challenges they face, such as health issues and demographic change. Maintaining STI investment is key.

The “Science, Technology and Industry Outlook 2010” highlights that OECD members posted sluggish research and development (R&D) spending figures, with annual growth shrinking from more than 4% in recent years to 3.1% in 2008. Patent numbers rose by more than 2% from 1995 to 2008, but growth has weakened in recent years, and the number of OECD-area patents dropped in 2008. Trademarks also decreased by 20%. The report suggests that a rise in quality triggered the drop in the quantity of patents. Companies may also be opting for other ways to safeguard their knowledge base such as collaborative information science mechanisms.

Businesses were forced to rein in their efforts to maintain innovative activity, and trade and foreign investment have adversely affected the global value chains. This in turn has hampered businesses’ technical expertise and market intelligence.

However, the OECD found some positive results as well. Despite the crisis that has played havoc on the global economy in the last two years, a number of countries have reported surges in spending. Germany, South Korea, Sweden and the US have in fact given their long-term innovation a boost by increasing spending on public research. Moreover, all OECD members, save for the US, reported increases in their output of scientific articles between 1998 and 2008.

The report also notes how emerging economies continue to increase their R&D spending. Russia, for example, reported that R&D spending in 2008 was equal to 2% of the OECD total, which is nearly equal to the shares of Canada and Italy.

“Investment in science and technology is an investment in the future,” says OECD Secretary General Angel Gurría. “At a time of fiscal consolidation, countries must carefully consider the long-term impact of spending cuts on science and technology. There is also a need to increase the efficiency of this spending. The right governance structures should be in place if countries are to make the most of the resources devoted to science and technology.”

So how can we give innovation a boost? The OECD report highlights a number of issues that need to be resolved. For instance, governments should establish a new shared system for the governance of international cooperation in science and technology so as to tackle the challenges that affect us all including climate change. Members should also enhance policy support at various stages of the innovation value chain such as entrepreneurship. The report also notes how the information and communication technologies (ICT) infrastructure should be upgraded and greater access to public research data should be offered. Finally, policy at the international, national and regional levels should be coordinated better.


Cordis European Commission News, 2010-12-15.


Organisation for Economic Cooperation and Development (OECD)