OECD report says investment in innovation key to long-term growth

Canada ranks high in engineers grads and scientific papers; R&D spending decreasing

Comments Off on OECD report says investment in innovation key to long-term growth December 16, 2010
by Design Engineering staff

Source: OECD

According to a report (“The Science, Technology and Industry Outlook 2010”) by the Organisation for Economic Co-operation and Development (OECD), OECD governments must maintain spending on science and innovation to strengthen long-term growth; however, real growth in R&D spending by OECD countries has slowed, with annual growth falling from over 4% in recent years to 3.1% in 2008.

Yet, some countries have increased spending since 2008, despite the economic crisis. For example, Germany, Korea, Sweden and the US have boosted spending on public research while emerging economies continue to increase R&D funding. China’s real expenditure on R&D in 2008 was equivalent to 13% of the OECD total, up from around 5% in 2001 while the Russian Federation’s R&D spending in 2008 was equal to 2% of the OECD total, close to the shares of Italy and Canada.

The report’s specific analysis of Canada warns that, since 2005, Gross Expenditure on R&D (GERD) as a share of GDP has dropped steadily. It fell to 1.8% in 2008 after reaching its high point around 2.1% of GDP between 2001 and 2005. In addition, industry’s R&D expediture fell from 50% in 2004 to 48% in 2008, while business expenditure on R&D (BERD) fell to 1% of GDP in 2008, below the 1.6% OECD average. During the same time period, government financing increased from 31% to 32%, while venture capital represented only 0.08% of GDP in 2008.

On the plus side, the report says 39 percent of total new degrees were in science and engineering in 2007, more than any other OECD countries including the U.S., Japan, the U.K. and Germany. In addition, science and technology occupations as a percent of total employment (36 percent) put Canada among leading countries trailing only Sweden.

The OECD Science, Technology and Industry Outlook 2010 report reviews trends and developments in science, technology and innovation policy in 34 member OECD countries and six emerging economies (Brazil, China, India, Indonesia, the Russian Federation and South Africa).

Canada R&D environment vs OECD member country average (Click to zoom) Source: OECD