The report cites sluggish investment and low innovation activity as problems, which it blames on a high degree of regulation and bureaucracy, despite progress in recent years. And while the report salutes new efforts, including a 2005 law to help improve the flow of finance to potential innovating companies, it would like to see more effort to leverage private finance, involving venture capital companies.Poland’s R&D expenditure as a share of GDP remains among the lowest in the OECD, at some 0.7%, even though various official programmes had targeted twice that level. Now, the National Reform Programme for 2005-08 to implement the Lisbon Strategy earmarks a rise to 1.85% by 2008. Innovation drives growth, but some high-level research may be unnecessary, and the report notes that Polish industry could boost productivity simply by adopting best-practice methods and existing technologies, as well as importing the right machines. Most of all, the government must provide the right framework conditions for innovation to flourish anyway, and that includes supplying the right kind of human capital.©OECD Observer No. 256, July 2006