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

nanotechnology and biotechnology. Developing economies
— and their billions of people — will enter the digital age,
lowering barriers to growth and unlocking an enormous
amount of creative potential. Developed economies
will continue to drive innovation and begin competing
with developing economies to harness the fruits of that
innovation. Companies and countries that are successfully
able to invest in and harness emerging technologies will be
better suited to thrive in this new era.
Policy makers and societies need to prepare for the
inventions that will emerge and disrupt the global economy.
Not every invention will change the way society functions
nor even work at all. Technological progress at times rises
out of the ashes of dead-end research programs, useless
inventions and failed commercial ventures. Many of our
greatest inventions have come through partnerships
between states and corporations. The American railroad
network and the underlying infrastructure of the Internet
were initially funded by federal initiatives. Investors and
entrepreneurs joined these initiatives and have made
them into what they are today, huge communication
and transportation networks. In order to provide these
for future generations, policymakers need to decide
how to partner with business to invest in new forms of
infrastructure and education. In particular, lawmakers and
regulators are faced with a particularly difficult challenge of
new moral dilemmas relating to the human condition and
the protection of citizen’s rights in new domains, where
technological progress is leaping ahead of our knowledge of
its potential applications and consequences.
1.2 A more global world is a more innovative world
The contemporary period of economic integration was
inaugurated with the General Agreement on Tariffs and
Trade (GATT) in the aftermath of the Second World War.
From 1950 to 2007, global trade grew at an average pace
of 6.2% per year 13 , and GATT’s successor organization, the
World Trade Organization (WTO), now has 159 country
members. The 2012 accession of Russia brought all of the
major global economies into the WTO fold. India, not usually
thought of as a particularly strong proponent of open
borders, reduced its peak tariffs on industrial products from
over 200% in 1990 to less than 10% in 2009 (ref.14), and
China has seen a similarly radical reduction in its restrictions
on trade. The flows of products, services and people across
borders have been further facilitated by regional agreements
and groupings such as NAFTA, APEC and European Union’s
Single Market Programme.
Meanwhile, international agreements such as the 1989
Montreal Protocol and the 2003 Framework Convention
on Tobacco Control have yielded significant results in
mitigating ozone emissions and improving public health.
International coalitions and partnerships have brought
stakeholders together to find creative new solutions to
major global problems 15 . The Intergovernmental Panel
on Climate Change (IPCC), for example, collates interdisciplinary
research on climate change (see case study).
The IPCC’s major ‘assessment’ reports are collaborative
Policy makers and
societies need to prepare
for the inventions that
will emerge and disrupt
the global economy.
projects and include researchers from across the scientific
community as well as policymakers. In the sphere of public
health, the Global Alliance for Vaccines and Immunisations
(GAVI) and the Global Fund to Fight AIDS, Tuberculosis and
Malaria bring together representatives from government
ministries, donor organizations, civil society, the private
sector, and the academic community. According to their
own estimates, GAVI and the Global Fund have worked to
prevent 5.5 million and 6.5 million deaths respectively since
their inception 16 .
Along with goods and ideas, people are becoming
increasingly mobile both within and across countries,
creating networks of collaboration and ‘brain circulation’.
International migration increased 42% in the first decade of
the twenty-first century 17 , and by 2010 well over 200 million
people resided outside of their country of origin 18 . People
are moving within countries as well, notably from rural to
urban areas. 2008 marked the first year that the number
of urban dwellers surpassed the number of people living in
rural areas worldwide 19 .
A mobile population leads to increases in productivity,
wealth and innovation. Because of their heightened
mobility, migrants help to stabilize economies through
their willingness to move in response to labour market
fluctuations 20 . Moreover, flows of people facilitate innovation
by connecting people with opportunities. Evidence from
OECD countries suggests a strong connection between
migration and GDP growth and total employment in
recipient countries 21 . In the United States, United Kingdom
and the European Union, up to a third of economic growth
has been attributed to migration by some 22 . In addition
to filling jobs in low-wage sectors, migrants are a key
component of innovation in research and technology
sphere. In the United States, migrants are only 12% of
the population, but they file more than 40% of patent
applications annually every year 23 . Evidence from the US also
suggests that a higher concentration of migrant employees in
a particular sector correlate with increased patent filings by
natives 24 . It is not surprising, then, that high concentrations
of migrants can be found in the most dynamic US industries.
1.3 Education and growth
The future prospects for continued innovation also look
positive in the context of the improvements in quality and
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