INNOVATION AND INCLUSIVE GROWTH

Advisory Group Meeting

Caroline Paunov

Paris, France - 3 July 2014

2

Session 1b: Overview of the publications’ main messages

(Document: Innovation for Inclusive Growth)

Innovation matters for inclusive growth

• Growth is not necessarily inclusive nor complete solution for addressing poverty and exclusion

3

• Innovation is relevant because:

A. “Disruptive” nature of innovation with effects on distribution

B. Innovation can be a solution: “inclusive innovations”

Three trends drive impacts

Information and Communication Technologies

Labour demand effects depending on education & nature of changes (automatisation / work reorganisation)

4

Knowledge Economy Changing role of capital depending on capital / input needs for innovation

Growing Emerging Markets Changing demand for types of innovations & contributions depending on type of bias in innovations

Industrial and territorial inclusiveness:

dispersion is substantial

• “Islands of excellence” whether firms, industries, universities, territorial exist everywhere …

• R&D activity support growth of leading regions !

5

87

83 81

73 73

72 65 64 64 64

62 60

57 55

54 52

51 49 49

45 44

42 30

26

0 20 40 60 80 100

TurkeyCanada

AustraliaChile

China (TL2)United States

FinlandGreece

SpainBrazil (TL2)

MexicoIndia (TL2)

FranceSweden

KoreaNetherlands

PortugalJapan

South Africa (TL2)United Kingdom

AustriaGermany

Czech RepublicIreland

%

• Industrial and territorial dispersion in performance

National patent concentration by top 10% of TL3 regions, average 2008-10

Source: OECD Regions at a Glance 2013

Factors affecting industrial and territorial

inclusiveness

• Divergent trends in terms of future opportunities for “level-playing field” (ICTs (+/-), costs of R&D, ...) reducing “islands of excellence”

6

“Trickle-down” dynamics

• Contributions of “islands” for remainder

• “Absorptive” capacities • Linkages with remainder

Policies for industrial inclusiveness

• Focus of policies on open “excellence” vs. creating “level-playing field”

= relative balance matters, not setting criteria for excellence

7

• Practice of policies and their potential exclusion of smaller players and biases from policy interactions

• Innovation policy instruments differ in impacts on industrial inclusiveness: “inclusiveness footprint”

8

Inclusive Innovations as a solution

Mobile money

3D printing from waste

2000$ car

“Assembly line” cataract

operations

Fuel from waste

Community phone shop

Products

Services

Well-being

Entrepreneurship

Off the grid electricity

Pedal

washing

machine

Sustainability and scale: what is needed?

• Frugal & grassroots innovations if focused on financially sustainable initiatives & business development opportunities

• Focus: Inclusive innovations in education

– Critical factor: skills and training

– Focus on building certain abilities (motivation, etc.) & removing obstacles (financial constraints)

• Some specificities including reliance on public finance, donations, … different type of “sustainability” and “scale”

9

Requirements for scale and policy

• Scale success requires

– Correctly understanding demand of the poor

– Innovation!

– Private businesses involved in steering

– Taking advantage of infrastructures

– “Pragmatic” regulation (esp. public services)

10

Policy responses - Consultation processes involving the poor - Governmental co-operation - Regulatory efforts - Evaluation (& measurement) efforts

Reaching “open excellence” for the

benefit of all?

11