Inclusive Innovation Policies for Strategic or Traditional Sectors

Several countries have implemented innovation policy programmes to promote innovation in traditional and strategic sectors. This page presents a range of relevant examples. Additional interesting facts and figures can be found here.

Please click on the images to find the full policy cases. 

Encouraging R&D in Traditional Industries – Israel

2010-present

Objective: Encourage large companies to establish R&D centres in lagging regions in order to narrow the gap with Central Israel.

Target: Large leading R&D-investing companies.

Instrument: Grants supporting R&D expenses of R&D centres created in peripheral regions for 24-36 months.

Innovation vouchers programme for the design sector – Ireland

2015

Objective: Assist SMEs in gaining the knowledge needed to explore a targeted business opportunity, sourced from higher education institutes and public research bodies.

Target: SMEs in the design sector.

Instrument: Innovation voucher for SMEs to explore a business opportunity or solve a problem with the assistance of a registered public knowledge provider.

Competitive Start Fund for the design sector – Ireland

2012-present

Objective: Provide young companies in the design sector with critical early-stage funding to help them reach key commercial and technical milestones and launch new products and services in the international marketplace.

Target: SMEs in the design sector.

Instrument: Equity investment of up to EUR 50 000 for a 10% shareholding in the company.

EuroAgri Foodchain – Eureka Countries

2012-present

Objective: Increase the competitiveness and innovativeness of the European agri-food industry by supporting R&D projects.

Target: SMEs, large companies, research institutions and universities in the agri-food sectors that intend to introduce an innovation.

Instrument: Different forms of support including the provision of grants, advisory services and promotion of products and technologies across countries.

Did you know...?

The uneven distribution of innovation capacities across firms has contributed to widening the gap in productivity performance between the most  productive and less productive firms. The capacity of less productive firms to learn from leading firms might also have diminished, as the cumulative and frequently tacit and localised nature of knowledge makes it progressively more difficult for laggards to catch up with innovation leaders (OECD, 2015; OECD, 2016). This is frequently referred to as the “dual economy” problem, i.e. where the innovative, technologically advanced and highly productive sectors coexist with the traditional, low productive sectors that benefit little from new technology. Israel constitutes a case in point: the so-called “start-up nation” has a relatively small yet highly dynamic high-tech sector, which is the major driver of growth in the country, while the rest of the economy consists of traditional industries and service sectors characterised by low productivity and low wages. This dual economic structure has increased the levels of inequality and social unrest in the country (Lemarchand, Leck and Tash, 2016). 

Low industrial inclusiveness thus hinders social inclusiveness. High-skilled workers in more productive firms progressively gain higher wages and benefit from regular on-the-job training and from constant interaction with other highly skilled individuals, ultimately increasing their innovation capacities. In turn, those working in less productive firms, even with similar capacities, see their wages stagnate or decline over time, have fewer training opportunities, and progressively have more difficulties move to highly productive jobs. These changesare even harder in contexts characterised by low geographical mobility of workers, rigid labour market regulations, or high levels of skills mismatch. As a result, workers with the potential to be highly productive might be trapped in low-productivity and low-innovative activities, or suffer from long periods of unemployment in case of mass layoffs (OECD, 2016).  

 

References

Lemarchand, G.A., E. Leck and A. Tash (2016), “Mapping research and innovation in the State of Israel”, GO-SPIN Country Profiles in Science, Technology and Innovation Policy, Vol. 5, UNESCO Publishing.

OECD (2016), The Productivity-Inclusiveness Nexus, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264258303-en.

OECD (2015), The future of productivity, OECD Publishing, Paris,http://dx.doi.org/10.1787/9789264248533-en.