Innovation: Not all peaches and cream

OECD Forum 2007

Different perspectives. ©OECD

As the 8th annual OECD Forum in May showed, everyone agrees that innovation is important, but not everyone agrees on the reasons why.

Innovation is the key for endless economic well-being! Innovation is the only effective response to today’s globalisation! We all want more innovation!These were some of the cries of government and business speakers at this year’s OECD Forum as they stressed the crucial role innovation plays in competitiveness, productivity and national progress. After all, innovation has driven much of the rise in living standards since the Industrial Revolution. And to remain competitive in the face of China and India, OECD countries realise they must move up the value chain and engage in a continuous process of adjustment and innovation.More equitable global development is also possible thanks to innovation, according to a number of speakers. For example, in the Philippines, the average waiting time for a fixed-line telephone was 14 years in the 1980s. Now everyone can buy a mobile phone, and Manila has become the world’s texting capital.According to one estimate, Filipinos send SMS messages at a rate of 500 billion messages per year.Innovations in information technology have enabled countries like India to thrive, while internet and mobile phone banking have allowed wider access to credit.Many OECD countries complain about the difficulties of spurring more innovation. Ultimately a cocktail of policies is needed to ignite the “magic powder” in areas like high quality education, investment in science and technology, and an innovation-friendly business environment, based on strong intellectual property rights, open and competitive markets, and financial markets which back risk-taking. The OECD is now launching an innovation strategy to help governments the world over win the innovation game, the Forum learned.But is innovation all peaches and cream? Many civil society and trade union participants at the Forum were not convinced. For instance, innovation is a major source of economic change and social disruption today, with rapid technological progress, rather than globalisation per se, being the main driver of structural change. Workers are ill-equipped to adapt to this change, they said, and governments could do more to enhance their mobility, upgrade their skills and provide income support. Another concern they voiced focused on financial market innovation, particularly the rise of hedge funds and private equity firms that, whatever the less visible benefits, are seen as swallowing up companies and laying off workers in a quest for short-term profits. And financial innovation has also led to unlimited movements of capital worldwide and a rise of international criminality like money laundering, bribery, corruption and tax evasion. Even intellectual property rights are viewed with scepticism, because they favour corporate profits and restrict access to new products, including important medicines. Nor are IPR regimes effective in combating counterfeiting and piracy, though many poor people suffer the health and safety consequences of counterfeited products. China and Russia may be identified as leading counterfeiters, but the open availability of bogus products on western markets from Canal Street in New York to the flea markets in Paris shows that it takes two to tango.At their annual meeting following the Forum, OECD ministers were very sensitive to these concerns. They stressed that it is urgent to provide information to the public as to the true nature of the issues at stake, based on sound data and analysis, and the OECD is well placed to assist in this task.But ministers also acknowledged that there is more than a “communications deficit”. We must create an environment where the benefits of globalisation are shared more widely, including through adjustment assistance, they said, and underlined the importance of the OECD’s contribution in identifying policies which can help ensure just that. However, the organisation must also“display greater understanding for the many different paths that lead to growth and development.”So, with more effort from us all, innovation could be all peaches and cream, and an effective ingredient in dealing with globalisation. After all, the peach is itself a product of globalisation, having been introduced to the west thousands of years ago from its native home in China where it remains today a Taoist symbol of immortality.OECD Forum 2007–Innovation, Growth and Equity, 14-15 May 2007. Order your OECD Forum Highlights magazine by emailing . For more information on the 2007 Forum, including programme, speakers and sponsors, visit©OECD Observer No. 262 July 2007

Economic data

GDP growth: +0.6% Q1 2019 year-on-year
Consumer price inflation: 2.3% May 2019 annual
Trade: +0.4% exp, -1.2% imp, Q1 2019
Unemployment: 5.2% July 2019
Last update: 8 July 2019

OECD Observer Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Subscribe now

<b>Subscribe now!</b>

To order your own paper editions,email

Online edition
Previous editions

Don't miss

  • MCM logo
  • The following communiqué and Chair’s statement were issued at the close of the OECD Council Meeting at Ministerial level, this year presided by the Slovak Republic.
  • Food production will suffer some of the most immediate and brutal effects of climate change, with some regions of the world suffering far more than others. Only through unhindered global trade can we ensure that high-quality, nutritious food reaches those who need it most, Angel Gurría, Secretary-General of the OECD, and José Graziano da Silva, Director-General of the United Nations Food and Agriculture Organization, write in their latest Project Syndicate article. Read the article here.
  • Globalisation will continue and get stronger, and how to harness it is the great challenge, says OECD Secretary-General Gurría on Bloomberg TV. Watch the interview here.
  • OECD Secretary-General Angel Gurría with UN Secretary-General António Guterres at the 73rd Session of the UN General Assembly, in New York City.
  • The new OECD Observer Crossword, with Myles Mellor. Try it online!
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2019