Government Innovation Policy Research Articles

Public Support for Innovation, Intangible Investment and Productivity Growth in the UK Market Sector

Pressure on public finances has increased scrutiny of public support for innovation. We examine two particular issues. First, there have been many recent calls for the (relatively new) UK R&D subsidy to be extended to other research activities, such as software. Second, argument still rages about the efficacy of direct public spending on R&D via spending on academic research councils, universities, and government undertaken work on civil and military R&D. To evaluate these questions we use data on market sector productivity, R&D and non-R&D intangible assets, and public sector R&D spending. We look for evidence of market sector spillovers from intangible investment and from public R&D. We find (a) no evidence of spillover effects from intangible investment at the market sector level, including from R&D, (b) strong evidence of market sector spillovers from public R&D spend on research councils, and (c) no evidence of market sector spillovers from public spending on civil or defence R&D. Our findings tentatively suggest that for maximum market sector productivity impact government innovation policy should focus on direct spending on research councils.

The Prevalence of User Innovation and Free Innovation Transfers: Implications for Statistical Indicators and Innovation Policy

Statistical indicators have not kept pace with innovation research. Today, it is well understood that many industrial and consumer products are developed by users, and that many innovations developed at private cost are freely shared. New statistical indicators will empower policymakers to take advantage of the latest research findings in their innovation policymaking, and will enable them to benefit from improved measurement of resulting policy impacts.In this paper, we report upon a pilot project in which a novel set of statistical indicators were deployed in a 2007 survey of 1,219 Canadian manufacturing plants. The plants all developed or modified advanced process technologies for in-house use. Responses to the survey showed that data on both user innovation and the transfers of these innovations could be reliably collected, and that novel findings important to policymaking would result. One such finding: About 20% of the user-innovators surveyed reported transferring their innovations to other users and/or equipment suppliers - and the majority of these at least sometimes did so at no charge to recipients. Since cost-free sharing of innovations is understood to result in greater social welfare than licensing for a fee, innovation rates being equal, this finding has important public policy implications. Current government innovation policies tend to favor and even to subsidize the obtaining of intellectual property rights as a means of encouraging innovation. If a significant fraction of user-innovators in the economy are already freely revealing their innovations - despite the availability of intellectual property grants - perhaps intellectual property rights policies should be reexamined.We propose that improved versions of the novel statistical indicators piloted here should be integrated into official statistics so that user innovation, and related matters such as voluntary spillovers of innovation-related information, can be better monitored, better understood, and better managed.

Innovation policy: not just a jumbo shrimp

Policies that predict and direct innovative research might seem to be a practical impossibility, says David H. Guston, but social sciences point to a solution. With US policy on nano-technology as the main source of examples, David Guston's Commentary outlines a vision of an ideal government innovation policy, in a contribution to our Innovations series. A key problem is the inherent dilemma that policy arrives too late to affect the past, but too early to understand the future. Guston's solution is 'anticipatory governance', a concept outlined on http://www.nanohub.org/resources/3270/0 . This approach, he says, retains an element of revolutionary thinking, yet steers policy towards goals that are prudently and democratically arrived at.

Stimulating Research and Development of Pharmaceutical Products for Neglected Diseases

This article provides an introduction to the problem of pharmaceutical research and development of medicinal products for neglected diseases in developing countries. The prevailing market-based intellectual property incentive model of global pharmaceutical innovation has focussed health research priorities mainly on needs of industrialized countries. Increased international attention to the lack of health tools to prevent or treat diseases affecting impoverished regions has raised the discussion on how to encourage sustainable innovation in this area with little or no market. Proposals include models such as for example prize funds, advanced purchase commitments patent pools or creative licensing strategies and seek to complement the current intellectual property based incentive mechanism and government's innovation policy instruments such as tax credits or public research funds. Indispensable requirement to tackle the issue of neglected diseases, however, is a concerted commitment of all stakeholders on national and international levels.

An examination of Taiwan's innovation policy measures and their effects

Much greater emphasis is now being placed upon innovation in recognition that it plays an increasingly important role in enhancing industrial technology, thus the governments of many countries are currently adopting specific strategies aimed at stimulating innovation within firms. Taiwan is no exception; however, since the industrial structure of Taiwan comprises predominantly of small and medium enterprises (SMEs), their willingness to engage in innovative activities remains rather low. Furthermore, smaller firms are usually deterred from innovating because of scale barriers in some industries, particularly in the high-tech industries. The government in Taiwan has implemented a number of policy measures in recent decades aimed at enhancing firms' innovative investment, with notable policy measures focusing on speeding up the development of the high-tech sector including: establishing the Hsinchu Science-based Industrial Park to provide an environment conducive to the high-tech industry; organising innovation alliances to spread out firms' R&D risks and secure first mover advantages; expanding the government–sponsored research institutes to serve as a technology transfer channel for the private sector; providing tax incentives to absorb some of the costs of firms' R&D activities; providing access to sources of venture capital. In this study, we examine the effects of policy measures on firm productivity at firm level, since these policy measures are aimed at boosting the innovative environment within industry as a whole, promoting innovative activities and further enhancing firm productivity. Based upon a fixed-effects model extended from the Cobb-Douglas production function, and a sample of 136 manufacturing firms listed in the Taiwan Stock Exchange during the period 1994–2000, the results demonstrate that government innovation policy has had a significant effect on productivity within firms.

Impact of information and communications technologies on government innovation policy: an international comparison

With the rapid development of information and communications technologies (ICT), the greatest challenge to policy makers today is whether it will have a fundamental and structural impact on the way economies function and its sustainability on people's standard of living. Statistics showed that the "Solow's productivity paradox", which saw how productivity growth in major industrialised countries declined in the 1970s and 1980s despite phenomenal growth in technological improvements, has been overthrown by bursting rates of productivity growth since the mid-1990s. Besides establishing evidence of a growth trend, studies also conclude that potential productivity gains from the use of ICT will come from a combination of organisational changes that ICT brings about, a skilled workforce in ICT, and technology R&D spending. Therefore, although productivity gains will extend into the future, the rate at which these gains can be fully realised depends on the speed at which businesses and citizens can embrace ICT. There is clearly a role for the government in the digital economy, not of an economic regulator as under the traditional S&T policy of "picking the winners", but more of a facilitator, enabler, and orchestrator of innovative activities. Public policy in the information society needs to focus not only on preventing the digital divide, but more importantly on stimulating the demand for ICT and encouraging technological innovative activities on a broad scale. This paper looks at three aspects of the innovation policy, namely: innovation in the public sector: e-Government; innovation policy in the private sector: fostering technological innovation; innovation policy in the people sector: building an all-inclusive information society. Recognising that the government has the largest client base and that the public sector can serve as a leveraging platform to demonstrate how ICT can meet needs more efficiently, the development of an e-government can provide a catalytic force by stimulating a demand for ICT and creating a "market" for ICT applications. From the "best practices" of leading e-governments such as Canada, Singapore, the USA, Norway, Australia, and Ireland, four important aspects of an e-government strategy are identified, namely: the development of a broad e-government vision and the implementation of delivery mechanisms; the progression from mainly one-way and passive informational services to providing interactive, citizen-centric, and integrated online services; building transactional capabilities through Public Key Infrastructure, focusing on the authentication, non-repudiation, confidentiality, and integrity of information flows; and equipping civil servants to become knowledge workers in the knowledge economy. In the private sector, critical "pulse points" that will encourage technological innovation on a broad scale are identified, namely developing a financial and technical infrastructure, institutionalising a regulatory framework, developing a skilled workforce in ICT, creating an innovative, creative, and entrepreneurial culture, and forming strategic international alliances, illustrated with "best practices" from Singapore, the USA, Israel, Finland, Sweden, and Japan. Finally, recognising that the digital divide can be an unfortunate consequence of the ICT revolution, the paper examines what countries such as the USA, Singapore, Sweden, and Finland have done to create an all-inclusive information society, firstly by transforming non-ICT users to passive ICT-users through increasing their ability to access information, and finally to active ICT-users, where ICT becomes a means of communication and a way of life. Specific regulatory issues thrown up by the information society, such as the delicate balance between privacy protection and the risks of abuse by specific interest groups, will also be examined.

Innovation policy for developing Taiwan’s competitive advantages

Innovation is a prerequisite for every nation and business facing the emergence of a knowledge–based economy and globalization. For small and medium firms in developing countries with limited resources and relatively low national advantage innovation is much more difficult. Government innovation policy, stemming from three sides – supply, demand, and environment, has been shown to play a major role in assisting firms to conduct innovation activities, especially in developing countries. This paper first summarizes recent tends and issues relevant to Taiwan’s innovation structure and policy. Then, considering the present situation of Taiwan, analyzes the effect of government policy and current problems. Recommendations are presented systematically, based upon innovation policy.

Evaluations of innovation programmes in selected European countries

The incorporation of an evaluation procedure in a growing number of innovation policy programmes has now become an accepted feature in the public management of many countries. There already exists substantial experience on the conduct of such evaluations. The purpose of this paper is to present some sample evaluations of measures to promote innovation in a number of European OECD countries (Federal Republic of Germany, France, Netherlands, Sweden). Reference will be made to four of them to illustrate the diversity of the evaluative approaches applied to the wide spectrum of measures to promote innovation. Each of these examples will be studied in detail in order to identify their characteristic features, particularly with attention to their causes, performance and their use in political decision processes. A conceptual framework will be presented in order to propose a typology of various forms of evaluation and to characterize the four case studies. It shows that concept and process of evaluations are strongly influences by the specific context and consensus or dissent on objectives and resources. The case studies give a clearer insight into the factors determining the use of results of evaluations; and to what extent the role of evaluations varies from pure legitimation to a systematic and rational basis for decision making in the area of technology policy. Innovation policy consists of government actions towards technological developments and their implementation in the economy. Innovation, in this case, is defined as the development of technologically new or improved products or techniques and their commercialization in the market or implementation within production. Often evaluation means the examination and assessment of the mode of action and of the effectiveness of government innovation policy. However, finding a general interpretation of the expression “evaluation of an innovation policy” presents greater difficulty, and here wide divergences are evident. In the Federal Republic of Germany and the Netherlands, the term encompasses all forms of monitoring and assessing the operation and/or the effectiveness of an innovation policy. In Sweden, evaluation usually means performance of the a posteriori analysis of a measure. The terms “ex ante evaluation” and “follow-up evaluation” are respectively used for the explicit designation of prospective and retrospective analyses. In France, the term “evaluation” is associated with the notion of value. It often carries the connotation of a value assessment with the full monitoring implications of that expression.

Government Innovation Policy : Technological Forecasting and Social Change

Government Innovation Policy : Technological Forecasting and Social Change

Government innovation policy: Some past problems and recent trends

Introduction Following the so-called energy crisis of 1973-1974 there has been a marked reduction in the rate of growth in the world economy and, within Western Europe at least, high levels of structural unemployment now exist [ 161, with greatly reduced employment opportunities for college graduates. Moreover, convincing evidence suggests that the roots of the current economic crisis go back further than 1973 and are very much bound to the rate and nature of technological innovation [4, 21, 231. The energy crisis merely accelerated previously established trends. As a result, governments have become increasingly involved in the formulation and implementation of measures to assist and to instigate innovations in industry. With high levels of unemployment, low rates of industrial expansion, and increasing competition from the newly industrializing nations in traditional areas, high rates of innovation would appear to be essential to the maintenance of competitiveness, quality of services, and high living standards in the advanced market economies. Innovation policy is essentially a fusion of science and technology policy (patents, technical education, infrastructurally based pure and applied research) and industrial policy (investment grants, tariff policy, tax policy, industrial restructuring). Governmental policies to stimulate industrial innovation are many and varied, and a classification of government policy tools is given in Table 1. These innovation policy tools can be grouped under three main headings: