The enlarged debate of the Assembly on the activities of OECD in 1995
Doc. 7621
16 July 1996
Contribution
by Lord NEWALL, United Kingdom, European Democratic Group
Summary
OECD is usually known for its accurate analyses of economic trends and for its capacity to develop policy measures in problem areas such as inflation, unemployment and trade balances. A crucial factor of economic recovery and competitiveness is however the "innovation capacity" of countries. This may much depend on the "S and T development" structures and policies. The next era will be dominated by knowledge-based economic growth. OECD's endeavours in this field therefore deserve attention and support and must be more widely examined and reported.
I. OECD work on Science and Technology and co-operation mechanisms
The members of the Assembly usually have access to one single document called the OECD activity report, with several chapters in it. This is an official stock-taking of OECD activities. It would be unfair to judge OECD action in Science and Technology, or as it is sometimes referred to, R+D, on that particular document. There is a multitude of publications, documents, meeting reports etc. which are for obvious cost reasons not disseminated widely. The rapporteurs, the Secretariat and the library possess a few copies only. For this reason it is important to summarise major OECD projects, only for this is the only chance for the Assembly members in this specific contribution to grasp fully the scope of policy decisions in Science and Technology. This paper is therefore not limited to OECD activities in a given time frame, but it is a global overview of OECD action in science/technology past, present and future.
2. The following is a rough breakdown of OECD material on S+T, representing different types of publications, geared to different needs.
"Science and Technology Outlook": major OECD policy paper. Voluminous document used as a reference worldwide (twice a year),
"Basic Science and Technology Statistics": large variety of indicators (annualy),
Country-specific reviews: a thorough analysis of a country's Science and Technology policies, institutions, prospects etc. (Last issues on Russia and Czech Republic)
General publications on specific topics: eg:
- "Innovation, patents and technology strategies" (1996)
- "Government Technology Foresight Exercises" (1996) etc.
Finally the updated versions of the "Frascati Manual" which in 1963 proposed standards for surveys of research and experimental development. New versions take into account the role of "globalisation" in R+D.
3. The Frascati Manual paved the way to the development of a complex web of indicators which is necessary to understand and analyze national systems of S+T. No explicit single model is capable of determining direct relationship between science, technology, the economy and society. It is only this scientifically established rich data on research and industrial policies, institutional issues (higher education, number of researchers etc...) socio-economic objectives (health, environment expenditure etc..) that can help to design theoretical models. These indicators have now become the corner-stone of OECD work and they are an essential background element in many government programmes. There is no serious national report or article on S+T issues which does not have at least one reference to OECD data in it.
4. There is a strong tendency in OECD at the moment to adapt the indicators to the knowledge-based society/economy. This derives from a need for indicators "better adapted to describe the dynamic system of knowledge development and acquisition and its relationship with economic performance..." This seems to be a new central concept in OECD's future direction and it would certainly deserve careful consideration in future years. The term "knowledge-based economy" results from a fuller recognition of the role of knowledge and technology in economic growth. In this new model, growth depends more directly on investments in knowledge. Knowledge networks contribute to the performance of the "national innovation systems". Innovation capacity thus becomes the centre of gravity of the new growth theory.
5. On the institutional side, member governments of OECD give high priority to S+T. Despite their declaration of intent though, there was a 2,2 % reduction in DSTI (Directorate for Science, Technology and Industry) budget (2,1 % overall OECD). This will lead to some cuts in the translation and publication programmes and some posts. The programme of work 97-98 has been adopted provisionally but there are some uncertainties due to the fact that a new Secretary General has taken office. We can only hope that the strategic importance of OECD in analysing the interaction between science and technology on one hand, and economic growth and well being of populations on the other, will continue to be understood by member governments. As for OECD, it will have to develop a more persuasive theory, one which explains the role of science and technology as a driving force of prosperity.
6. Most of Committee on Science and Technology's work falls within the competence of DSTI. Several high level governmental expert committees set the objectives for DSTI working programme. Every other year a ministerial conference (ministers of research and/or technology) defines policy priorities. The committee is invited to these conferences as an observer. In the past the committee held regular meetings (about once a year) with OECD directors in order to maintain the information flow at a certain level and also participate reasonably well prepared in the September OECD debates. This practice has now been replaced by sporadic and topic-oriented contacts. The committee and OECD mutually invite each other to important colloquies, conferences etc. The committee is represented at the meetings of the OECD Committee on Science and Technology Policy, at secretariat level.
7. The committee's field of interest extends also to "energy policies" which is covered by the "International Energy Agency", which is an autonomous body, attached to OECD. There is also the NEA (Nuclear Energy Agency) of OECD which is very specialised. Matters related to nuclear energy are usually treated separately by the committee and will therefore not figure in this paper.
II. Trends and priorities
8. During the last decade a certain number of new factors have influenced the international context, in which the S+T policies operate.
First of all the "globalisation" of the economy led to a redistribution of forces. The traditional Triad countries (USA, Europe, Japan) now have to face fierce competition from South East Asia and perhaps soon from ex-communist countries. In the second place the easing of tensions between East and West will result in the conversion of the defence-oriented R+D capacity. The promotion of dual-use technologies will dominate the next decade. Thirdly, recent developments in both technology innovation and process innovation have cast doubts on the traditional linear concept of innovation (Research.Development.Production.Marketing). The emergence of the knowledge-based products ("smart" products) and the introduction of information and communication technologies blurred the linear process. The possibility to apply a new technology in a way
that essentially creates a new product altogether is called the "reverse product cycle"See footnote 3, which is part of a Chain-link Model of Innovation.
9. Against this backdrop governments made attempts to rethink and readjust their S+T policies. Despite the fact that there remain considerable differences between big research countries and smaller countries, some common tendencies can be observed in OECD zone:
i. Although S+T lie high on the agenda of governments the R+D expenditure declined in terms of percentage of GDP. This is mainly due to the fact that though they see S+T as potentially important for the future, they are not sure of the automatic "just return" principle for the national economy. This is a very complex issue;
ii. Governments are more reluctant to invest in R+D in traditional sectors such as industry, transport and energy. Instead, they put emphasis on meeting the needs of society in fields such as environment, health and living conditions;
iii. As a result of the same thinking, governments are also reticent to fund fundamental science as a pure source of knowledge. The abandonment of big projects like the Superconducting Super Collider in USA, illustrates this prudence. International cooperation in megascience projects such as CERN aims at reducing the cost factor;
iv. In many countries we assist at a restructuring and reorganisation of S+T infrastructures. The aim pursued is double: to increase the emphasis on technology and innovation on one hand (ministerial reassignments etc.) and to introduce consulting machinery to take into account public views on technology assessment, both at governmental and parliamentary levels. Some countries go as far as conducting surveys and consensus conferences (Denmark, Switzerland, Germany);
v. Last but not least, the educational reform, in particular at university level is high on the agenda. Many governments are convinced of the system's failure "to provide the population with the needed qualifications". The OECD work programme for 1996-1998 provides room for an activity on the "Reassessment of the Role of Universities in knowledge-based economies". This ambitious project overlaps somewhat with the activities of the Directorate for Higher Education of the Council of Europe and extreme caution and improved cooperation seems necessary to avoid duplication of resources..
10. In the period of 96-98 OECD effort in the field of S+T will be concentrated on three major themes:
i. - National policy trends and structures: with sub-themes or subject areas comprising country profiles; drawing up new indicators for a knowledge-based economy; monitoring structural change etc.
ii. - Knowledge-based economy: will focus in particular on Technology and Innovation systems: Universities of the 21st century; investment structure and economic performance in a knowledge-based economy which was described above;
iii. - Globalisation and international co-operation, whose main activities will be: international competition and National Support Systems; megascience; communications technologies and multimedia; biotechnology.
11. Among many studies and meetings foreseen to carry out the work programme, our attention was drawn to one particular item because of its implications for policy makers and for parliaments in particular: a study on public awareness and understanding of S+T as a critical factor in determining links between science and society at large. The start of this activitiy will be a Conference in Japan in November 1996. The attitudes of young people towards S+T was matter of concern in many countries, as illustrated by a recent House of Commons report on "S+T in Schools" (1995). This subject seems particularly adapted to discussion in the committee and perhaps a special report. A joint undertaking with the Committee on Culture and Education can also be envisaged.
12. The plethora of OECD documents on Science and Technology contain meagre information on cooperation with Central and East Europe. Perhaps is it because the level of cooperation has not attained a satisfactory and mutually profitable level yet? Whatever the reasons one point of fundamental importance remains: Science and Technology restructuring as well as reliability of statistics and indicators concerning those countries are of utmost importance for building up sound innovation policies, leading to a competitive economy.
III. Energy policies
13. This is a wide field and would deserve a special hearing in the Sub-Committee on Technology Policy and Energy with the experts of the International Energy Agency of OECD (IEA). Some developments ought nevertheless to be mentioned here:
- The main long-term focus is put on energy security with its three components: diversification of supply, energy efficiency and the interdependence of energy and environment policies;
- The IEA "Shared Goals", adopted in 1993 by the 23 member States seeks to integrate the notion of "sustainable economic growth" into energy policies, the ten point declaration stipulates, among others, that energy prices should not be held artificially. This is perfectly in line with past Assembly texts;
- A "Joint Declaration of Cooperation" was signed with the Federation of Russia in July 1994. An IEA team is helping to design a new energy strategy for Russia and conducts a survey on its energy sector. The interoperability between this scheme and the European Energy Charter initiated by European Union is however not very clear;
- In the technology development field, the IEA promotes collaborative technology development projects, with the possibility for non-member countries to participate. Special emphasis is placed on energy end-use efficiency and improved use of conventional fossil fuels. Collaborative projects attempt to capture the benefits of collaboration without losing competitive advantages. To what extent this would successfully work in practice, remains to be seen. Intellectual property rights and industrial secrets will certainly suffer from wide diffusion by information technologies such as Internet.
14. One point in OECD energy policies, which contrasts strongly with 3 or 4 years ago is the abandonment of the "carbon tax" idea. This notion, with potential environmental implications and to whose development OECD contributed considerably, does not seem to be on the agenda any longer. This is certainly a shift in policy to be looked into carefully by the Parliamentary Assembly. Would more widespread deployment of currently available technologies fill the gap as regards the reduction of greenhouse gas emissions?
After a first reading in the committee and along the lines presented in this paper one or two amendments may be tabled at the plenary. I am strongly convinced that the Committee on Science and Technology and the Parliamentary Assembly can both be catalysts in persuading the public and the governments of the importance of keeping pace with scientific progress and with technology. OECD endeavours therefore deserve support and publicity. On behalf of the committee I should like to thank OECD and IEA, and in particular Mr Nezu, Director for Science, Technology and Industry and his team, for having spared time for lengthy discussion with me as Rapporteur.
Reporting committee: Committee on Economic Affairs and Development (Doc. 7615)
This contribution was provisionally approved by the Committee on Science and Technology at its meeting on 11 July 1996.
Secretaries to the committee: MM. Perin and Torc�toriu
Footnote: 1This provisional contribution is distributed in conformity with Rule 28 (2) of the Rules of Procedure.
Footnote: 2by the Committee on Science and Technology
Footnote: 3 Example: "In the first stage a firm adopts information technologies to improve the efficiency of an existing process; in the second stage, this new process generates a significant quality improvement in the product. The third stage occurs when through use of this technology to improve an existing product, it becomes evident that the basis for an entirely new product exists, usually in a different field altogether. The classic example of this is the development of the SABRE reservation system by American Airlines. Originally developed to improve the process of booking tickets, the system was then adapted so that other airlines could use it, resulting in more profits for American Airlines than their traditional business of flying people. It was then extended to include hotel and rental car reservations, creating a value-added network of travel. Now American Airlines has used this expertise to extend into the field of processing insurance claims and airport management in general" OECD, Science/Technology outlook, Trends and Performance, March 1996.