Support where it works

Business Innovation Policies: Selected Country Comparisons
OECD Observer

Inventors, entrepreneurs and start-ups offer a glimmer of hope in a time of low growth and austerity, with governments and economists alike shifting their attention towards innovation as a way out of a protracted crisis. Government-supported policies and programmes to support business innovation have been around for decades, but how successful are they and what lessons can be drawn for these more austere times? 

Business Innovation Policies: Selected Country Comparisons looks at innovation policies across seven OECD countries, highlighting the trends in support measures. It also considers the growing shift towards so-called “demand-side” policies, aimed at increasing demand for innovation among enterprises. For instance, R&D tax credits are more generous now than they have ever been, and are currently provided in 22 OECD countries, up from 12 in 1995. Individual grants to entrepreneurs and inventors are also an important part of innovation policy; the Foundation for Finnish Inventions, for instance, financially supports the development and commercialisation of invention proposals, with awards typically ranging from US$2,800 to $280,000.

Successful non-R&D innovation policies include Denmark’s Vækstfonden, which has used US$12 billion in public funds to support over 3,500 companies since 1992, and the UK’s Knowledge Transfer Partnership, which encourages collaboration between businesses and universities through projects which receive government funding. The average project cost is around $93,000 a year, but results in an increase in annual profit of $357,000 for participating firms (of which there are typically over 1,000 at any given time). The report notes that some schemes require improvements, such as the Pre-Seed Fund in Australia, which encourages private sector investment in research institutions. The fund caps grants at US$780,000, which in certain cases leaves firms “stranded”, lacking funds to continue with a project once they have already made large investments.

Investment in innovation does not come cheap, but it pays off, not only in the short term, but by opening up the business world to new technologies and job-creating growth.

OECD (2011), Business Innovation Policies: Selected Country Comparisons, Paris.

OECD Directorate for Science, Technology and Industry.

Denmark’s Vækstfonden.

UK’s Knowledge Transfer Partnership.

©OECD Observer No 287, Q4 2011




Economic data

E-Newsletter

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

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly


Online edition
Previous editions

Don't miss

  • Read some of the insightful remarks made at OECD Forum 2017, held on 6-7 June. OECD Forum kick-started events with a focus on inclusive growth, digitalisation, and trust, under the overall theme of Bridging Divides.
  • 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.
  • How do the largest community of British expats living in Spain feel about Brexit? Britons living in Orihuela Costa, Alicante give their views.
  • Brexit is taking up Europe's energy and focus, according to OECD Secretary-General Angel Gurría. Watch video.
  • OECD Chief Economist Catherine Mann and former Bank of England Governor Mervyn King discuss the economic merits of a US border adjustment tax and the outlook for US economic growth.
  • Africa's cities at the forefront of progress: Africa is urbanising at a historically rapid pace coupled with an unprecedented demographic boom. By 2050, about 56% of Africans are expected to live in cities. This poses major policy challenges, but make no mistake: Africa’s cities and towns are engines of progress that, if harnessed correctly, can fuel the entire continent’s sustainable development.
  • OECD Observer i-Sheet Series: OECD Observer i-Sheets are smart contents pages on major issues and events. Use them to find current or recent articles, video, books and working papers. To browse on paper and read on line, or simply download.
  • How sustainable is the ocean as a source of economic development? The Ocean Economy in 2030 examines the risks and uncertainties surrounding the future development of ocean industries, the innovations required in science and technology to support their progress, their potential contribution to green growth and some of the implications for ocean management.
  • 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.
  • They are green and local --It’s a new generation of entrepreneurs in Kenya with big dreams of sustainable energy and the drive to see their innovative technologies throughout Africa. blogs.worldbank.org
  • 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 www.oecd.org/careers .

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 2017