14-1190b-innovation-managing-risk-evidence

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24 innovation process, or one sector or set of activities. And we should be wary of imposing perspectives or policies that may skew innovation priorities in undesirable ways. Yet, there are data to be studied, rich lessons to be learned, and more benefits to realize. Nevertheless, policy has to be made and the evidence we have tried to assemble is, we would argue, helpful and valuable. This chapter has sought to capture some of the most important evidence from economics and other social sciences. Understanding what has made innovation work or fail can play a valuable role in influencing what can make it work in the future. Drawing together the conclusions of this chapter, we identify four pillars or foundations of a first-class ‘innovation infrastructure’: 1. The first pillar is a high-quality, merit-based system of education and training. Its importance is difficult to overstate. The UK possesses some advantages in toptier institutions, but there is increasing competitiveness in universities worldwide, and these advantages require constant investment to be maintained. Further, the UK faces a serious risk of falling behind rising stars like South Korea in crucial population-wide competencies. Too many children experience low-quality schooling, which presents large economic costs for the long-term. On the national budget, education should be viewed not as an expenditure but as one of the highest-return investments available. 2. The second pillar is substantial investment in basic research. Governments are able to manage levels of risk and time horizons on investment, which the private sector may find more difficult. This gives governments a special and indispensable role in supporting basic research. The UK government should take great care to ensure that its comparative advantage in basic research is not overwhelmed or weakened by understandable enthusiasm for commercialization in universities. By increasing its support for basic research, the UK government can expand the horizon of future growth. 3. The third pillar is the system of governmentmanaged incentives that promote innovation via markets and entrepreneurship. First is an efficient and effective, and appropriately constrained, system of intellectual property rights. The system is due for an evaluation, with sensitivity to industry-specific needs. Secondary institutions include: systems and incentives for technology transfer that promote the diffusion of knowledge; policies to assist small firms to access licensing patents; regimes of taxes, subsidies and regulations that do not arbitrarily discriminate in fostering new firms and new ideas; and state development banks to provide patient, long-term capital to innovators. The details matter, and we have tried to indicate how they should be examined. 4. The fourth pillar is the setting of, and investing in, national innovation priorities. One clear priority is resource management: increasing the productivity of energy, land and other natural resources, and minimising greenhouse gas emissions. The design of cities, as drivers of resource consumption as well as creativity and economic growth, is especially important. These are areas where markets and prices alone are unlikely to capture the interdependence and public nature of many of the key services and outcomes. They are also areas where benefits are likely to be fairly long-term. Other priorities should be determined through assessment of strategic advantages, engagement with leading innovators, and the generation of aspirational technology roadmaps. Finally, we identify four guidelines for the process of innovation policymaking: 1. Take a long-term, systems view of innovation. This means avoiding narrow, compartmentalist views of policymaking that focus on just one sector and/or a short time horizon. An effective policy mix will take account of each part of the innovation system; will take advantage of, and be wary of, feedback between system components; and will appreciate that actions today have critical longterm implications. This type of approach will help lessen the scope for government failure that can arise from bureaucrats and politicians fiddling with processes they fail to understand. On the other hand, the potential market failures are so important, and the subject so vital for growth, competition and living standards, that government disengagement is not a sensible approach. 2. Consult widely. Innovators’ needs vary widely across industries and institutions, and across parts of the innovation chain. Innovators may also recognize the potential for unwanted impacts, or detect them in practice, before policymakers are able. Ensure that important voices which may not be sufficiently prominent, such as those of small firms, teachers and of research scientists, are given weight. 3. Adopt a learning approach to policy design and evaluation. This means trialling different approaches, and improving the collection of data on inputs, processes and outcomes as well as feedback from key actors. A range of innovation policy problems could benefit from this approach, including the design of grant application rules for basic research, of the school system, and of institutions for fostering university-industry linkages. Accompanying this should be a sustained investment in research on innovation itself. Such research is not easy given that the subject is about learning, covers many disciplines, and the outcomes may be uncertain and long term: but it is very important. 4. Ensure that innovation policies are transparent, consistent and stable over time and investment. Innovation will be more likely to proceed where actors are more confident rather than more confused, and where evaluations of sovereign and policy risk favour commitment rather than withdrawal. Where future flexibility may be required, as is often the case for experimental policy, ensure that processes are specified in advance. Certainty is not on offer, but unnecessary uncertainty can be reduced. A fundamental lesson is that government-induced policy risk can be a major deterrent to both innovation and investment.
Ian Goldin (Director of the Oxford Martin School, and Professor of Globalisation and Development at the University of Oxford) 25 CHAPTER 2: FUTURE GLOBAL TRENDS IN INNOVATION Innovation and the associated flow of ideas, products, services and people are likely to continue to provide significant opportunities for progress — but these same trends are also likely to be associated with increasing systemic risk, complexity and uncertainty.
Page 1 and 2: INNOVATION: MANAGING RISK, NOT AVOI
Page 3: FOREWORD Advances in science and te
Page 6 and 7: EDITOR AND CHAPTER AUTHORS 6 Editor
Page 8: 8 CASE STUDY AUTHORS Framing Risk -
Page 11: Global Alliance for Vaccines and Im
Page 14 and 15: 14 INTRODUCTION In today’s global
Page 16 and 17: 16 Investors face additional risks
Page 18 and 19: 18 unclear patent law), or barriers
Page 20 and 21: More problematically, system-wide r
Page 22 and 23: 22 is unwilling or unable to undert
Page 26 and 27: 2 1. TRENDS IN INNOVATION AND GLOBA
Page 28 and 29: 28 the body. Nanoparticles generate
Page 30 and 31: access to education that are occurr
Page 32 and 33: to seek opportunities for more subs
Page 34 and 35: 34 Middle East and Africa mean that
Page 36 and 37: At their core, decisions are about
Page 38 and 39: 38 CASE STUDY CONSISTENCY AND TRANS
Page 40 and 41: 40 within Her Majesty’s Inspector
Page 42 and 43: 42 liabilities. The coalition gover
Page 44 and 45: 44 Advances in the life sciences co
Page 46 and 47: SECTION 2: UNCERTAINTY, COMMUNICATI
Page 49 and 50: Andy Stirling (Science Policy Resea
Page 51 and 52: as a whole, for seeding and selecti
Page 53 and 54: information concerning public polic
Page 55 and 56: Kingdom. It has 34 participating an
Page 57 and 58: Cinderella, too often uninvited to
Page 59 and 60: have been awarded in rational choic
Page 61 and 62: ecomes easier to accept and justify
Page 63 and 64: Tim O’Riordan (University of East
Page 65 and 66: CASE STUDY HUMAN RIGHTS AND RISK Ka
Page 67 and 68: give the impression that certain ki
Page 69 and 70: adioactive waste in many countries
Page 71 and 72: David Spiegelhalter (University of
Page 73 and 74: course, means that 1% are violent,
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level was announced on 22 January 2
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Even in situations with limited evi
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Steve Elliott (Chemical Industries
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THE NGO PERSPECTIVE Harry Huyton (R
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SECTION 3: FRAMING RISK — THE HUM
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David Halpern and Owain Service (Be
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letter and discovered that this is
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measures have been put in place and
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Nick Pidgeon and Karen Henwood (Car
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equity of risk distribution, the pe
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individual include the emergence of
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domain of biosecurity risks. In the
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Edmund Penning-Rowsell (University
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— that is, governed by random pro
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90% 80% Media scare stories linking
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Judith Petts (University of Southam
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The impact of intuition on response
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policy has moved towards less-inten
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more children, raising the risk of
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Nick Beckstead (University of Oxfor
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CASE STUDY POLICY, DECISION-MAKING
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might be developed, and what the li
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Julia Slingo (Met Office Chief Scie
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transport disruption, wind damage,
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the premiums that we have received
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Only three GM crops have been appro
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Joyce Tait (University of Edinburgh
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evidence used to support policy and
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1). In essence, the more developed
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that engage with policy decisions o
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Lisa Jardine (University College Lo
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debate, which enabled the non-scien
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again concluded that there was stil
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we had been at such pains to educat
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ANNEX: INTERNATIONAL CONTRIBUTIONS
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center of Paris has led to a comple
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production of unconventional hydroc
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3.3. The current difficulty faced b
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• How can we give entrepreneurs s
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As experienced by the World Trade O
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nanodashboard.nano.gov/. 77. See Ma
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41. Vanichkorn, S. and Banchongduan
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22. OECD. Dynamising National Innov
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engagement. London: Zed Books; 2005
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science and technology. Washington
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structural model. Risk Analysis 12(
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Chalmers, David John. (2010). “Th
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171
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