Comparison of innovation policies in selected European, Asian and ...

0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
Source OECD MSTI, 2009
Figure 2.4: HERD, BERD and GOVERD as % GERD
Figure 2.5 shows BERD as a percentage of GDP by HERD as a percentage of GDP. This
chart shows a pattern of association between the two variables such that countries high on one
variable are also generally higher on the other. There are a number of outliers. Interestingly
the chart is helpful in distinguishing Japan and Korea which while high on BERD % GDP are
much lower on HERD % GDP than might be suggested by the levels of other OECD nations.
New Zealand scores low on both counts, along with Portugal, Italy, and Chile.
This chart demonstrates that an important factor differentiating the innovation systems of
nations is the level of BERD % GDP compared with the level of HERD % GDP. Often
nations are compared only by the BERD % GDP but this has a number of shortcomings,
notably that different industrial compositions of different countries will separately influence
the level of BERD 5
.
However, Figure 2.5 demonstrates that the OECD average exhibits a “central tendency” in the
BERD/HERD ratio that is characteristic of the all OECD nations. Such a ratio for all nations
may reflect a nexus between two intrinsic features of innovation systems underscored by the
size of the economy that is common for all OECD nations – human capital for R&D, as
measured in HERD and business capital for R&D, as measured in BERD. If such a nexus
holds for all nations, and as given by the OECD average shown on the chart, then we may
5 Refer Williams et al in http://www.morst.govt.nz/publications/research-reports/berd-in-nz/
21
HERD/GERD
BERD/GERD
GOV&OTH/GERD