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How to Build a Knowledge
Economy and How to Know When
You Have One
John Dryden
Deputy Director
Directorate for Science, Technology and Industry, OECD
MEASURING AND FOSTERING THE PROGRESS OF SOCIETIES
Second OECD World Forum on "Statistics, Knowledge and Policy"
Istanbul, Turkey, 27-30 June 2007
1
What is a Knowledge Economy?
Related concepts
 The New Economy
 The Information Economy (bio-economy, etc.,)
 The Service Economy
 The Innovation Economy
 The Knowledge-based Economy
2
Characteristics of a Knowledge Economy

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High value-added goods and services mainly because of the
“knowledge content” of their factor inputs
Performance of R&D
High educational standards, human resources in S&T,
workforce skills
Strong innovation performance, innovations successful in the
market
Intensive and broad use of generic technologies, esp. ICTs
Strong “high-tech” sectors, intensive use of “knowledgeintensive services”
Value chains highly globalised
Investment in “knowledge” now about the same as that in fixed
capital (~8pc of GDP)
3
How to Build One?

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Copy the Lisbon Agenda?
Research and Development – inputs, outputs and outcomes
Human Resources – education, skills, mobility
Innovation and linkages between the “actors”; “open innovation”
Encourage (production and) use of generic technologies
Framework conditions – open markets, absorptive capacity;
attention to the demand side
Open-ness and globalisation – knowledge flows and the global
enterprise
4
How to Know When You’ve Got One?

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Hard to measure, as the concept isn’t tightly defined.
It’s the results in terms of growth, incomes,
productivity and employment – and other measures
of well-being that take account of social and
environmental “wealth” – that count
Measures of international “competitiveness”
Doubts about utility of composite “knowledge
economy index”
Need to take account of scope (intl, natl, regional,
local); and aggregation (whole economy, sector, firm)
Need data and analytical toolkit to develop battery of
indicators in main issue areas
5
The OECD
STI Scoreboard



Published every other year,
in print and online
Over 200 internationally
comparable indicators
Free access on-line edition
with Statlinks: direct URL
links to underlying Excel
sheets used in the graphs.
STI Scoreboard 2005 available at:
www.sourceoecd.org/scoreboard
Multilingual summaries: www.oecd.org/sti/scoreboard
6
STI Scoreboard 2007
Forthcoming in October
Comprehensive coverage of the different facets
of the knowledge economy in 9 sections:
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R&D and investment in knowledge
Human resources in S&T
Innovation policy
Innovation performance
ICT: an enabler for the knowledge society
Particular fields
Internationalisation of S&T
Global economic flows
Trade and productivity
7
New in the 2007 Scoreboard


90 families of indicators, over 200
figures
Around 25% of new indicators
compared to 2005 edition. Examples:
– S&T indicators in biotech, nanotech and
environmental technologies
– Patenting by universities, patenting by regions,
science linkages in technology
– Employment by skills and earnings by level of
skills
– International outsourcing of intermediary inputs

New multi-colour double-page layout
for easy readability
8
Investment in Knowledge
R&D, Software and Higher Education as a percentage of GDP (2003)
The knowledge economy is about more than R&D

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OECD economies taken together, invested 5% of GDP in knowledge in 2003.
In US, close to half of this investment concerns software and higher
education, whereas in EU countries the main component is R&D investment.
9
R&D Intensity
as a percentage of GDP (2005)
China is now one of the major players in the global knowledge economy

In 2005, China stood just behind the Triadic countries in terms of share of R&D in
total R&D; R&D investment represents 15% in total OECD R&D.
10
OECD output of university and doctoral degrees
% of all OECD graduates receiving their degrees
by region of graduation and field of study, 2004
Total university degrees
EU19
United States
Other
39
Japan
31
20
S&E doctorate degrees
57
20 14
9
10
11
8
24 22
43
S&E university degrees
14
27
50
Doctorate degrees
European universities are a main source of science and engineering degrees in the world

43% of total OECD university degrees originate in Europe, compared to only 22% for the
United States.
11
Employment by Foreign Multinationals
Trends in the share of affiliates under foreign control in manufacturing
employment in selected OECD countries between 1995 and 2003

Employment by foreign affiliates increased in France but decreased in the United
12
States, Germany and Italy.
Labour productivity growth
Contributions of key activities to annual growth of value added per person employed 2000 - 2005
Other industries
Manufacturing
Other services
5
4
4.7
3.9
2.9
3.3
3
2.2
2
Labour productivity growth of total economy
2.7
1.6
1.7
1.9
1.7
1.7
1.3
1
Business sector services
1.0
1.4
1.3
0.9
0.5
1.0
1.0
0.9
0.0
0.2
0
-1

0.0
-0.3
-0.5
Business services are a main catalyst of productivity in numerous OECD countries
In Canada, Greece, New Zealand, the United Kingdom and the United States, it
contributed to over 55% of the labour productivity growth.
13
Broadband Access by households
Households with broadband access a percentage of all households (2003-06)
Growing adoption by consumers but remaining divergences across countries

In 2006, Korea remained the country with the largest share of households with a
broadband connection via a computer or mobile phone (94%).
14
Patenting by Universities
Share of patents filed owned by universities 2002-04 in total
inventions
Intellectual property policies for university innovation is giving results in the EU
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In 2002-04, more than 10% of patents applied by US residents are owned by
public institutions, whereas in Europe (25), this share was around 4%.
With respect to 1996-98, EU (25) doubled the share of patents owned by
universities whereas US has decreased it slightly.
15
Biotechnology firms’ activities
Percentage of biotechnology firms active by field of application (2003)
Predominance of health-related applications in biotechnology

The majority of firms are active in health (45%), followed by agro-food
(22%), industry-environmental applications (19%), and “other” (18%).
16
Nanotechnology Patenting
Worldwide total number of nanotechnology patents by application fields
Nanotechnologies have the potential to generate diverse industrial applications
Nanotechnology is multifaceted. It consists of a set of technologies on the
nanometre scale rather than a single technological field.
17
The next edition of the STI Scoreboard
will appear in October 2007
[email protected]
[email protected]
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