rieti bbl seminar handout · → competition (“creative destruction”) → resource...
TRANSCRIPT
RIETI BBL Seminar
Handout
Speaker1: Andrew W. WYCKOFF (OECD)
Speaker2: Dominique GUELLEC (OECD)
http://www.rieti.go.jp/jp/index.html
September 14, 2012
Research Institute of Economy, Trade and Industry (RIETI)
INNOVATION IN THE ECONOMIC CRISIS AND BEYOND
Dominique Guellec
Caroline Paunov
Country Studies and Outlook Division
Directorate for Science, Technology and Industry
OECD
Structure of the presentation
1. Innovation and the macro economy
2. Innovation in the current crisis
3. Policies
4. The Outlook for innovation?
2
3 key factors of the current business cycle for
innovation
Downturn in
Economic Activity
Weaknesses in
Financial Systems
High Levels of
Sovereign Debt
What to expect for innovation?
Reduced demand for products
→ competition (“creative destruction”)
→ resource reallocations
Public budgetary situation
Reduced demand for products
→ cash flows reduce innovation possibilities
→ demand for high-tech products
→ competition (“rents” for innovation)
Reduced liquidities
Uncertainties
Public budgetary situation
Two factors for aggregate innovation: i) innovation performance of the
existing system and ii) firm dynamics/ entrepreneurship
Innovation in the crisis and beyond
1. The economic crisis that started in 2008 has negatively affected business innovation and R&D in all countries.
2. The crisis and the recovery have been uneven across countries, industries and categories of firms.
3. Some have featured better: countries in Asia, including Korea and China; large multinational firms in high tech industries.
4. VC, start ups and SMEs have been hit the hardest, and have not recovered yet (entrepreneurship still low).
5. The crisis has revealed and amplified weaknesses (and strengths) which pre-existed, across countries, sectors and firms.
5
Business enterprise R&D has partially
recovered after the 2008-9 shock
-15.0
-10.0
-5.0
0.0
5.0
10.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Japan
United States
Total OECD
EU-15
6
BERD funded by business, yearly growth rate (%)
Source: OECD.
A deep through followed by a fragile recovery
7
-15
-10
-5
0
5
10
15
2007 2008 2009 2010 2011 2012
Patent Filings are hit by the crisis
US EU World
PCT Filings; 5 months moving average; yearly growth rates (%)
Source: WIPO.
Large firms have recovered quickly
8
Source: EU (2011), R&D Scoreboard.
Growth rates in R&D investments and sales of top EU and US corporate R&D investors, 2008-10 (%)
Large medium-tech manufacturers (e.g.
automobile) have been hit strongly
9
-3.8
0.6
3.9
-16.3
-6.5
-2.9-1.4
-0.6
3.8
9.9
4.5 4.4
9.4
1.5
5.54.3
3.0
5.6
-20
-15
-10
-5
0
5
10
15
%
2008-09 2009-10
Companies in medium-tech industries (N. 359)
Companies in low-tech industries (N. 103)
Sales Sales SalesR&D R&D R&DEmployment Employment
Companies in medium-tech industries (N. 359)
Companies in low-tech industries (N. 103)
Sales Sales SalesR&D R&D R&DEmployment Employment
Companies in high-tech industries (N. 475)
Employment
Source: OECD STI Outlook 2012 based on EU (2011), R&D Scoreboard.
Sales, R&D and employment growth for firms in high-, medium-high and low-technology industries, 2008-09 and 2009-10 (%)
Business dynamics:
More destruction than creation
10
50
60
70
80
90
100
110
120
130
140
150
Australia Finland Germany
Denmark United States
50
60
70
80
90
100
110
120
130
140
150
Australia Japan Finland
Germany Netherlands
Source: OECD STI Outlook 2012 based on OECD (2012), Entrepreneurship at a Glance.
Creation of new businesses Bankruptcies
Venture Capital Investment has
partially recovered in the US
3
4
5
6
7
8
9
2005 2006 2007 2008 2009 2010 2011 2012
11
Source: Extracted from the OECD STI Outlook 2012 based on Venture One, Money Tree.
Sum of deal value, quarterly amount, billion USD
Certain countries have better resisted to the
crisis than others: China, Korea
12 -10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Korea
Total OECD
China
Source: OECD, Main Science and Technology Indicators (MSTI) Database, June 2012.
Business funded R&D, yearly growth rate (%)
An further step in the rise of the innovative
strength of China and Korea
13
Source: OECD, STI Outlook 2012.
40.8 39.8 37.4 35.6 35.4 34.3 34.3 33.8 31.6 29.4 27.4 26.9
3.1 3.13.6 3.9 3.5 3.3 3.0 2.8
2.72.9
2.5 1.9
13.5 13.0 13.0 12.7 12.4 11.7 11.2 11.111.6
10.810.7 10.3
5.2 5.1 4.9 4.5 4.13.7 3.4 3.5 3.3
3.23.0 2.7
10.3 11.0 12.7 15.1 16.5 18.2 18.1 17.3 17.619.2
19.6 21.4
4.4 4.3 4.6 4.5 4.2 4.2 4.2 4.1 4.3 4.74.4 4.1
1.7 2.1 2.3 2.6 2.9 3.4 4.0 4.4 4.8 5.25.9 5.7
0.81.6 0.9 1.1 1.4 1.8 2.6 3.4 3.7 5.1 7.5 9.0
20.2 19.9 20.6 19.9 19.6 19.4 19.3 19.6 20.3 19.6 19.1 18.0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
United States Netherlands Germany United Kingdom Japan France Korea China Other Countries
The policy reaction to the crisis
Policy responses: Recovery plans (2009) were heavily loaded in S&T and innovation related expenses.
Examples of measures:
- Funding of public research organisations (accelerating ongoing projects);
- Loan guarantees to SMEs.
- Tax breaks for businesses performing R&D
14
Counter-cyclical STI policies Government support to business R&D as % of GDP
15
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
0.50
%Direct funding of BERD Indirect support through R&D tax incentives No cost estimate of R&D tax incentives
Direct and indirect government support to business R&D, 2005
or nearest year available
Five sources of long-term risks for innovation-
based growth in OECD economies!
• Depletion of available skills for innovation due to long-term unemployment
• Loss of valuable “tacit knowledge“ for firms with dismissals
1 Damages to human capital
• Foregone investments affect future rate of innovations • Possible “scars” to the innovation infrastructure, not for the
big ones so far though
2 Damages to investment
• Probably takes much longer to materialise, yet if unequal growth performance persists there might be risks
3 Relocation of innovation activities
4 Financial market conditions
5 Public support for innovation
What about innovation policy?
While strong innovation performance contributes to raising growth prospects high levels of public spending in its support can be a
challenge for tight budgets.
- seeking greater efficiencies in public sectors‘ innovation support
- concentrating funding in sectors of strategic relevance
- exploiting co-operative arrangements with the private sector
Avoid possible damages of the
downturn (esp. long- term risks) !!
Support positive trends
The Outlook for Innovation and public support to
innovation?
Both constructive and negative forces at work in the coming years:
- The macroeconomic and budgetary picture will not be favourable. BUT:
- Innovation keeps a distinctive competitive factor in a globalised economy, both companies and governments are aware of that.
- Social and global challenges keep calling for more innovation
- Sustained opportunities in a number of industries: ICT, bio, nano
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Thank you
Oecd.org/sti/outlook
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