The OECD released new research on emerging national innovation practices in member countries. I found several salient points-

More and more OECD governments are giving firms tax breaks to drive innovation while cutting their direct (federal) spending on business R&D and are also encouraging public research organisations to commercialise their inventions, according to a new OECD report.

Tax breaks OECD governments recognize the importance of private sector investment in innovating activity. Commercial entities are in the best position to gauge technological areas sustainable by business supply-consumer demand market dynamics. Tax breaks give businesses further incentive to undertake basic R&D for innovations spanning years ahead rather than merely focusing on applied R&D or tweaking existing inventions.

Cutting back federal business R&D By shifting reliance for business R&D onto commercial entities, OECD nations' observe the argument by many economists, such as Michael Porter, that innovation is the providence of the business sector and not government. Historically, nations that fostered private commercial activity experienced greater economic growth and innovation than those unsupportive of private enterprise. Even when governments played central roles in developing new technologies, such as DARPA funding of early Internet technologies, successful policies encouraged for-profit business participation.

Commercializing public research Increasing innovation through commercialization of public research is consistent with the ex-post economic justification for patents and technology transfer policies such as the Bayh-Dole Act (and its foreign counterparts). Innovation in public R&D best serves society through commercialization by getting out of the lab and into useful application.

posted by Noel Le @ 10:08 AM | International

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