OECD STI Scoreboard

A new report out by the OECD is continuing its path breaking work on the knowledge-based economy. As you will recall, earlier this month they released their large report on Supporting Investment in Knowledge Capital, Growth and Innovation (see earlier posting for highlights). Last week, the OECD release its Science, Technology and Industry Scoreboard report for 2013 (click here to download or select specific sections).
The report contains statistics on a number of economic measures and measures of science and technology. However, the report goes beyond these traditional measure to include data on innovation and knowledge-based capital (more on this below). The highlights from the report are as follows:

Investment in innovation remains a priority. 27 of the 34 OECD countries and a number of partner economies now indirectly support business R&D via tax incentives. In 2011, the Russian Federation, Korea, France and Slovenia provided the most combined – direct and indirect – support for business R&D as a percentage of GDP. In Canada and Australia, indirect funding of business R&D exceeded direct funding by a factor of five. New estimates show that the cost to a firm of investing in R&D depends on its size, location and balance sheet. In 2013, Australia, Canada, France, Korea, the Netherlands and Portugal are giving more generous treatment to SMEs.
Young, dynamic firms contribute more to job creation than previously recognised. Between 2008 and 2011, net employment in the OECD area fell by 2%, or 9 million people, two-thirds of them in the United States. The manufacturing and construction sectors were the hardest hit but information industries – ICT manufacturing, publishing or telecommunication services – suffered too. During the crisis, most jobs destroyed reflected the downsizing of mature businesses; net job growth in young firms (5 years old or less) remained positive.
Foreign consumers sustain jobs. As the interdependency of countries grows, consumers in one country sustain jobs in countries further up the value chain. In 2008, 20% to 45% of business-sector jobs in most European economies were sustained by foreign demand. Compared to 1995,these shares increased in all countries; in Germany it rose more than 10%. Shares are smaller in Japan and the United States owing to their relatively large size and lower export/import dependency. Nonetheless, initial estimates suggest that over 10 million US jobs were sustained by foreign consumers, with 2 million of these due to East and Southeast Asian consumers.
Trade in value added provides a new perspective on trading relationships. The OECD-WTO Trade in Value Added (TiVA) indicators reveal that export performance from countries has become dependent on imports from a greater number of economies. For example, in China, over 1995-2009, gross exports increased about 12-fold at current prices while the foreign value-added content of exports only tripled to over 30%.
Researchers are increasingly mobile. A new indicator tracks changes in the affiliation of scientists who publishing scholarly journals. The top nine international bilateral flows of researchers coming into and leaving a country involve exchanges with the United States. While total US inflows exceed the outflows, more scientists who start by publishing in the United States move to affiliations inching and Korea than vice versa. The United Kingdom is the second most-connected economy. On average, the research impact of scientists who move affiliations across national boundaries is nearly 20% higher than that of those who never move abroad. Raising the performance of these “stayers” to the level of internationally mobile researchers would allow many economies to catch up with leading research nations.
University hotspots are still concentrated in a few locations. Worldwide, the top 50universities with the highest relative impact over 2007-11 are highly concentrated geographically but less so than over 2003-09. Overall, 34 of the top 50 are located in the United States. The rest are in Europe, and, for the first time, two are outside the OECD area. The United Kingdom is second, with specific strengths in the medical and social sciences.
Emerging economies increasingly play a role in science and innovation. In 2011, China was the second-largest R&D performer after the United States, ahead of Japan, Germany and Korea. It was also the second largest producer of scientific publications, accounting for more than 74 000collaborations in 2011, up from 9 000 in 1998. Over this period, the number of Chinese publications co-authored with US-based institutions increased from nearly 2,000 to over 22,000.

Digging a little deeper into the report, I would like to highlight a few of the more interesting new statistics concerning intangibles and knowledge-based capital.
As the two graphs below show, investment knowledge-based capital is important in most OECD countries:
Investment in knowledge capital.png
Changes in business investment.png
(Data available at dx.doi.org/10.1787/888932889820 and dx.doi.org/10.1787/888932889820).
Likewise, the knowledge-based capital related workforce is of major importance:
Knowledge-based capital workforce.png
(Data available at dx.doi.org/10.1787/888932890618)
Publications cited in patents applications by discipline shows the range of knowledge inputs:
Innovation-science link.png
(Data available at dx.doi.org/10.1787/888932890352.)
Related is another new statistic is the value added by services in the production of goods that highlights the point I have been making about the fusion of manufacturing and services (note there is a section in the report specifically on the manufacturing/service linkage):
Service-manufacturing link.png
(Data available at dx.doi.org/10.1787/888932889915.)
As noted above, the report has many, many more interesting data points. It should serve as a valuable reference for our ongoing discussion of the intangible economy.

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