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Public
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This page is Public
Contributions to socio-economic objectives
Innovation can play a critical role in addressing socio-economic objectives, which are affected by the following factors.
- Economic growth and employment. (see Contributions to growth and jobs). Neoclassical growth models consider knowledge accumulation and technological progress as the only way to achieve long-run growth to reduce effect of diminishing returns to capital. Advances in growth theory have recognised the endogeneity of the accumulation of knowledge capital and human capital: human and knowledge capital derive from investment decisions of individuals and firms in response to economic incentives and therefore to policies and institutions. Innovation is also often associated with setting up new enterprises to provide the market with new offerings and create new jobs. At the same time, innovation can lead to firm closures and job destruction if products or services become obsolete or are displaced by more competitive offerings. Aggregate employment effects will depend on the nature and effectiveness of labour reallocations.
- Environmental challenges. (see Addressing environmental challenges). Innovation is increasingly perceived as crucial for tackling environmental challenges like limiting climate change and global greenhouse gas emissions and maintaining biodiversity. Innovation can contribute to addressing environmental challenges through the introduction of new technologies and non-technological innovations. These non-technological innovations—in particular, organisation innovation—are needed to make environmental technological innovation effective. For example, evidence shows that innovation in climate change mitigation technologies is accelerating and that in recent years manufacturing companies have also been upgrading their efforts towards sustainable manufacturing, from introducing pollution prevention to designing integrated approaches that take into account product lifecycles and wider impacts.
- Social challenges. (see Addressing social challenges) Innovation can help alleviate social challenges, which encompass health and demographic challenges, and social exclusion and inequalities, among others. As an example, innovation can help elderly individuals remain healthier, live independently longer, and counteract the diminishing of physical capabilities that become more prevalent with age. Innovation can also provide more personal, predictive and preventive health care products that improve the quality of human health. In addition, frugal or inclusive innovations that basically are cheaper and simplified versions of existing goods help reduce differences in living standards between groups in society. In addition to innovation addressing social exclusion social benefits arise by creating employment opportunities and addressing particular challenges faced by lower income groups.
What are specific contributions of innovative entrepreneurship?
Innovative entrepreneurship can contribute to socio-economic challenges by:
- Formalising the informal sector (see Formalising the informal sector). The creation and development of innovative enterprises can lead to reductions in the informal sector, in several ways. First, innovative new ventures are less likely to operate in the informal economy, as they have higher returns from operating in the official economy (e.g. by partnering with financial institutions and co-operating with established firms). Second, they may provide employment opportunities and innovations that encourage people and businesses to move from the informal sector to the formal sector.
References
- OECD (2010), "Addressing global and social challenges through innovation", in The OECD Innovation Strategy: Getting a Head Start on Tomorrow, OECD Publishing. http://dx.doi.org/10.1787/9789264083479-8-en
- OCDE (2012), “Innovating for global and societal challenges”, in OECD Science, Technology and Industry Outlook 2012, OECD, Paris. http://dx.doi.org/10.1787/sti_outlook-2012-en

Country Reports

- Overview of food and agriculture challenges and performance in Australia (Innovation, Agricultural Productivity and Sustainability in Australia), 2015
- System innovation for sustainable materials use in Flanders (Belgium), 2014
- Governance for System Innovation Sustainable Housing and Building in Flanders (Belgium), 2015
- System innovation and transition processes in Russian technology platforms (Russia), 2014
- Introduction (OECD Reviews of Regional Innovation: Central and Southern Denmark 2012), 2012
Thematic Reports

- Executive Summary (Data-Driven Innovation: Big Data for Growth and Well-Being), 2015
- Priorities for growth in OECD economies (Innovation and Growth: Chasing a Moving Frontier), 2009
- Readiness indicators: inputs to the space economy (OECD Handbook on Measuring the Space Economy), 2012
- What the data and evidence say about skills and innovation (Skills for Innovation and Research), 2011
- What Drives the Dynamics of Business Growth?, 2012
What Countries are Doing
- Policy intervention on innovative entrepreneurship
- Policy rationales and objectives for innovative entrepreneurship
- Policy-making contexts for innovative entrepreneurship
- Supply-side policy instruments for innovative entrepreneurship
- Demand-side policy instruments for innovative entrepreneurship
- Connectivity policy instruments for innovative entrepreneurship
- Provision of knowledge services for businesses
- Models and contributions for innovative entrepreneurship
- Metrics and evaluation for innovative entrepreneurship
- Regulatory framework for innovative entrepreneurship
- Market environment for innovative entrepreneurship
- Access to labour for innovative entrepreneurship
- Firms' access to knowledge for innovative entrepreneurship
- Access to finance for innovative entrepreneurship
- Entrepreneurial capabilities and culture