such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences,
Applications should be sent to rights@oecd. org 3 FOSTERING INNOVATION TO ADDRESS SOCIAL CHALLENGES Foreword Innovation has driven long advances in productivity and economic growth.
firms and public research actors recognise that modern economic growth must go hand in hand with societal progress.
The recent economic crisis, which finds part of its roots in financial innovation, reminds us of the importance of mobilising science,
and make the case for new policies to enable innovation to support the creation of shared social and economic value.
33 CHAPTER 4. STAKEHOLDER'S INVOLVEMENT...41 CHAPTER 5. A METHOD THAT GOES BEYOND GOOD PRACTICES:
The underlying motive of innovation has been generating economic value. However, looking ahead to the society in the future,
and other societal stakeholders act in this context? The challenges faced by modern economies urgently call for new forms of collective action between public and private stakeholders
in order to better integrate social challenges into research and innovation. A new approach is necessary to solve problems where social and technological progress co-evolves
There is a wide consensus that the disconnection between economic growth and wellbeing is increasing. At the same time research and innovation have become one of the main engines of growth However,
Failing to mobilise innovation to address some of the issues that affect populations at the global and local level has very high opportunity costs.
and involves multilateral collaboration among different stakeholders. The presence of social entrepreneurs, new actors on the innovation scene are necessary to bring forth the social dimension.
The recent economic crisis has made the need for innovation to address social challenges even more apparent and acute.
Involvement of various stakeholders. Learning spaces where good future dialogues are held for stakeholders to interact
and liaise Initial funding, maintenance of the research system and liking together the natural sciences and the social science.
further progress calls for a greater involvement of stakeholders who can introduce the necessary capabilities and interests in research and innovation to address social challenges.
'A wealth of dispersed, uncoordinated, experiments involving various stakeholders in different learning spaces are already in place
but notice that much of the thrust and efforts to mobilise STI for society have focused on economic objectives such as competitiveness and economic growth.
However, the current economic crisis reminds us of the importance of mobilising STI not solely for generating economic benefits,
and specific instruments that could enable governments and other stakeholders to address social challenges 12 FOSTERING INNOVATION TO ADDRESS SOCIAL CHALLENGES through research and innovation.
The rationales and opportunities to foster innovation to address social challenges The growth of modern economic systems has generated more numerous, complex and urgent social challenges.
Today, there is a growing consensus that the disconnection between economic growth and social welfare is increasing. Growth does not automatically lead to social welfare anymore
This results in the persistence of social challenges even in countries with significant economic growth and a growing social division between different population classes and countries.
New collective experimentations involving multiple stakeholders, including users and concerned parties, have been developed. Although mainly restricted to information technology innovation activities,
Social challenges are also multi stakeholders (e g. universities, research institutes, private companies, government, civil society, citizens.
This calls for more research activities on multidisciplinarity and promoting stakeholders'involvement, in particular by favouring the implementation process of research priorities
not only create economic value but also enhance social institution. Therefore. NPO, civil society are to be involved, which are rather low key in field of traditional innovation as‘Actor'in charge of leading innovation.
and it attributes the economy recovery. This wave contributes to the economic growth. A proliferation of organizations working on the boundaries of research and practical action.
Such currents have converged in this area including Social Innovation refers to various waves of change which triggers the ripple effect as output of innovation. 17 FOSTERING INNOVATION TO ADDRESS SOCIAL CHALLENGES Social challenges The fact is that the environment surrounding our society is rapidly changing, not to mention the climate change, aging population, energy problems,
the OECD LEED Programme1 created a multi-stakeholder Forum-the Forum on Social Innovations (FSI) 2 Built around this principal objective,
its multi-stakeholder nature; its balanced approach between a theoretical and practical dimension; and its international scope.
The FSI stakeholders, through a consultative process with international experts carrying out field analysis in several countries to identify its main features,
and can deal with new stakeholder and territorial relationships: Social innovation seeks new answers to social problems by:
economist and Nobel Peace Prize, developed the concepts of microcredit and microfinance. He founded the Grameen Bank.
social cohesion in the New Economy; social enterprises and social entrepreneurship; corporate social responsibility; community capacity building;
2007) Social Economy: Building Inclusive Economies, Paris: OECD (available in French in 2009, published by Economica, France) NESTA (2007) Innovation in responses to social challenges,
wwwnesta. org. uk/assets/uploads/pdf/Policy briefing/innovation in response to social challenges policy briefing nesta. pdf OECD (2004) Entrepreneurship: A Catalyst for Urban Regeneration, Paris:
OECD OECD (2003) The Nonprofit Sector in a Changing Economy, Paris: OECD (also available in French and in Spanish) OECD (2003) Asset Building and the Escape from Poverty:
Too often, stakeholders work separately and/or against each other, hence limiting or annihilating their respective impact.
and engage all the key stakeholders in their efforts. Let us take the example of Jean-Michel Ricard and Jean-Daniel Muller,
to mobilize key stakeholder groups to systematically address them, to implement and sustain empowerment models,
deterioration of local economy and depopulation and so on) are techno-social problems, and complexly but closely interacting.
in developing regional independence with effective collaboration with a variety of stakeholders and local actors;
The importance of collaboration among stakeholders 47 FOSTERING INNOVATION TO ADDRESS SOCIAL CHALLENGES and researchers both in social science and natural science has been recognized gradually.
finance and emission transaction, natural regeneration, regional economy, rural development and so on. A project example One of the R&d projects, From forest to houses co-realization of carbon abatement and comfortable life to 2050 (FY2009-2013), is the project that has a prospect of social innovation
the project takes an open roundtable discussion approach that stakeholders sit on the same table
and arrangement to promote dialogue in multi-stakeholder settings, which I have developed with my colleagues over the years, called Good Future Dialogue.
It necessitates a development and implementation of totally new policy instruments and methods to address new connections to stakeholders and actors.
The role of the facilitator is to ask certain questions from the stakeholders present representing different perspectives, voices, to the topic at hand.
SOCIAL INNOVATION IN A COMPLEX WORLD Dr Philip Goodwin1 The rise of uncertainty Chief executive, Tree Aid (formerly Global Head, Creative and Knowledge Economy Programme, British Council
In the higher income economies, this seems to be as true for consumption of public as much as private goods. As a result
Together with Mr. Toshihiko Fujii from METI1 I have proposed one concept on CSR in our book2 1. Ministry of Economy, Trade and Industry of Japan..
2008.67 FOSTERING INNOVATION TO ADDRESS SOCIAL CHALLENGES innovative businesses, collaborating strategically with various stakeholders like international organizations, NGOS, rural communities, etc.
Multi-Stakeholder Communication Level1 Level2 Educating to all employees about sustainability Level3 Identifying the agenda to tackle Level4 Integrating into every process of business The Goal for Sustainability Affirmative Social
Sharing experiences with society Way for social challenge by business Level Process Business Ways & Tools 1 Multi-Stakeholder Communication Communication (with NGOS, Labor union, Coomunity
And how do we keep our educational system sharp to ensure a workforce adequately equipped for our knowledge economy?
and strengthen the economy? There are limits to the already well-trodden routes in both the economic and social arenas.
then this will be visible not only 71 FOSTERING INNOVATION TO ADDRESS SOCIAL CHALLENGES in terms of economic growth figures,
insufficient cooperation between stakeholders; fragmented knowledge transfer policies; and insufficient expertise regarding support of (social) entrepreneurship in the (semi) public sector. Insufficient cooperation and networking between stakeholders Innovation for social challenges clearly involves a wider set of stakeholders in the process of generation of ideas, application
and diffusion. One thing is for sure, solving complex social problems by knowledge and innovation, is no longer a task of government alone,
This stresses the importance of cooperation and networking between stakeholders. However, this cooperation does not appear automatically.
Which mechanism could help the public sector to target stakeholders which normally are included not in the policy definition project?
For innovation to successfully address social challenges the importance of (new) partnerships and (new) stakeholders cannot be overrated.
improvement is necessary in exploiting knowledge for the economy and society. Insufficient use of research is still being made by companies
How to capture the interest of relevant stakeholders for identifying social priorities? What is the institutional infrastructure
find the right incentives for all stakeholders to participate and contribute. 74 FOSTERING INNOVATION TO ADDRESS SOCIAL CHALLENGES We need innovations in the field of technology, in working methods, rules and conduct.
and on the other hand dialog processes to give societal stakeholders the possibility to contribute to the definition,
If stakeholders rather than citizens are selected as participants in a consensus conference the procedure can have the opposite effect:
at the end of the conference the stakeholders are committed even more to their positions than at the beginning because they were unable to shrug off their role as representatives of particular interests during the consensus conference.
personally invited stakeholders and experts, or sometimes selected participants, meet in the run up to the conference over two weekends
Approximately 40 attendees from politics, economy, science and civil society argued the political framework for the future utilization
but they serve as a basis for reflection and discussion among stakeholders from the public and private sectors.
There is a huge opportunity cost in not valorising the knowledge stemming from this wealth of experiments that test the different options and configurations of social innovations.
and linkages with social innovators and other social innovation stakeholders should be strengthened so that social innovation experiments feed in the research community.
where different types of stakeholders are involved in research programming In the UK NESTA provided interesting examples of new forms of labs that deal with social challenges (climate, aging, health. etc) Proposal 6:
To the extent possible, the variety of public decision-makers should reflect the diversity of stakeholders,
in order to involve more private stakeholders (concerned by solving social challenges). The governmental process should be able to gather the competencies
One way is for the OECD to help stakeholder to better characterise the notion of social innovation,
The challenge ahead is to bridge the gap between stakeholders and embrace differences and to move from debate to the delivery of new practical tools and approaches.
Hax and Majluf 1991) and also provides a key source of competitive advantage in the absence of scale economies (Lewis et al. 2002.
The variance inflation factor (VIF) scores for the three measures were below 1. 5, which is much lower than the VIF cutoff of 10 (Chatterjee and Price 1991).
and Performance of Small Technology-Based Firms, Small Business Economics 16 (1), 37 51. Barney, J. 1991.
Comparing Large and Small Multinationals as Technology Producers, Small Business Economics 9 (1), 53 66.
The Small Business Economy: A Report to the President on Small Firms Prepared By the U s. Small Business Administration's Office of Advocacy.
Sources of Small and Medium Enterprises Excellent Business Performance in a Service Orientated Economy, Journal of Services Research 5 (1), 5 20.
as well as for a number of selected economies in each of the five following regions: Europe and North america, Asia and the Pacific, Latin america and the Caribbean, the Middle east and North africa, and Sub-saharan africa.
and the United kingdom confirming their place among the most competitive economies. Along with the United states, three Asian economies also figure in top 10,
with Singapore remaining the second-most competitive economy in the world, and Hong kong SAR and Japan placing 9th and 10th.
Switzerland retains its 1st place position again this year as a result of its continuing strong performance across the board.
when many neighboring economies continue to struggle in this area. While Switzerland demonstrates many competitive strengths,
see The Global Competitiveness Report 2012 2013 with detailed profiles of all 144 economies as well as an interactive data platform are available at www. weforum. org/gcr.
thus providing individuals with the skills needed for a rapidly changing global economy. Finland moves up one place since last year to reach 3rd position on the back of small improvements in a number of areas.
Improving the country's capacity to adopt the latest technologies (ranked 25th) could lead to important synergies that in turn could corroborate the country's position as one of the world's most innovative economies.
Finland's macroeconomic environment weakens slightly on the back of rising inflation (above 3 percent),
but fares comparatively well when contrasted with other euro-area economies. Sweden, overtaken by Finland, falls one place to 4th position.
These characteristics come together to make Sweden one of the most productive and competitive economies in the world.
its macroeconomic environment is more stable than that of a number of other advanced economies.
Although many structural features continue to make its economy extremely productive a number of escalating and unaddressed weaknesses have lowered the US ranking in recent years.
and the scale opportunities afforded by the sheer size of its domestic economy the largest in the world by far these qualities continue to make the United states very competitive.
As the second-placed Asian economy behind Singapore (2nd), Hong kong SAR rises to 9th position
Moreover, the economy's financial markets are second to none, revealing high efficiency and trustworthiness and stability of the banking sector.
The dynamism and efficiency of Hong kong's goods market (2nd) and labor market (3rd) further contribute to the economy's very good overall positioning.
participation remains below levels found in other advanced economies (53rd). Improving educational outcomes will also help boost Hong kong's innovative capacity,
Country Profile Highlights 3 2012 World Economic Forum Europe and North Americaeuropean economies have faced a number of challenges in the past few years.
Although they had been recovering from the significant difficulties brought about by the global economic crisis, rising concerns about the sustainability of sovereign debt in Greece and a number of other European countries continue to raise questions about the viability of the euro.
Most recently this has led to a double-dip recession in several countries in the region, rising inflation,
several European countries continue to feature prominently among the most competitive economies in the world. As described above, six of them are among the top 10.
As in previous years, the two countries from North america feature among the most competitive economies worldwide, with the United states occupying the 7th position and Canada the 14th.
although Canada has been successful in nurturing its human resources compared with other advanced economies (it is ranked 7th for health and primary education and 15th for higher education and training),
The bond spread against stronger economies has continued relentlessly to grow hindering the capacity of the country, its banking system,
However, Italy's overall competitiveness performance continues to be hampered by some critical structural weaknesses in its economy.
The country's economy grew by 8. 4 percent in 2011 and benefits from considerable progress in a number of areas covered by the GCI.
As in the case of other Southern European economies, Portugal continues to suffer from a deteriorating macroeconomic environment (116th)
and therefore the capacity of the country to transform its economy and move toward higher-value-added activities. 6 The Global Competitiveness Report 2012 2013:
Country Profile Highlights 2012 World Economic Forum Following a protracted economic crisis, Ukraine bounces back to 73rd position in this year's GCI.
and inflation was reduced, although it still remains fairly high at almost 8 percent. Overall, Ukraine maintains its competitive strengths;
Putting economic growth on a more stable footing in future will require Ukraine to address important challenges.
hampering higher levels of productivity in the economy. Moreover, as the country moves toward a more advanced stage of economic development, its lack of business sophistication (119th) and low rates of technological adoption (137th) will become increasingly important challenges for its sustained progress.
and many of its economies have improved greatly their competitiveness over the past years. The excellent performance of some of the regional champions is reflected in the presence of six economies Singapore;
Hong kong SAR; Japan; Taiwan, China; the Republic of korea; and Australia within the top 20. However, significant and growing differences persist in terms of the competitiveness performance within the region, with countries such as Bangladesh (118th), Pakistan (124th),
Notable strengths include its highly efficient markets for goods, where the economy ranks 8th; its solid educational performance (9th;
Strengthening competitiveness will require continued improvements to the economy's institutional framework as well as stabilizing its macroeconomic environment,
After losing four positions to faster-improving economies last year, Australia retains its rank of 20th and score of 5. 1, just behind Korea.
Despite repeated budget deficits, its public debt amounts to a low 23 percent of GDP, the third lowest ratio among the advanced economies, behind only Estonia and Luxembourg.
transport infrastructure continues to suffer bottlenecks owing to the boom in commodity exports. Following improvements in last year's Report, Malaysia maintains its score
but drops four places as other economies move ahead. The most notable advantages are found in Malaysia's efficient and competitive market for goods and services (11th) and its remarkably supportive financial sector (6th),
In a region where many economies suffer from the lack of transparency and the presence of red tape
Lack of progress in this area will significantly undermine Malaysia's efforts to become a knowledge-based economy by the end of the decade.
The country continues to lead the BRICS economies by a wide margin, 2 ahead of second-placed Brazil (48th) by almost 20 ranks.
despite a prolonged episode of high inflation. China runs a moderate budget deficit; boasts a low, albeit increasing, government debt-to-GDP ratio of 26 percent;
The rating of its sovereign debt is significantly better than that of the other BRICS and indeed of many advanced economies.
Inflation was reduced to around 5 percent in recent years after frequent episodes of double-digit inflation in the past decade.
addressing the many rigidities (134th) and inefficiencies of the labor market (70th) would allow for a smoother transition of the labor force to more productive sectors of the economy.
ICT, and energy infrastructure remains largely insufficient and ill-adapted to the needs of the economy (84th.
inflation returned to single-digit territory in 2011. Despite these considerable challenges, India does possess a number of strengths in the more advanced and complex drivers of competitiveness.
Inflation approached The Global Competitiveness Report 2012 2013: Country Profile Highlights 9 2012 World Economic Forum 20 percent in 2011, twice the level of 2010,
In an effort to stem inflation, the State bank of Vietnam tightened its monetary policy, thus making access to credit more difficult.
Infrastructure (95th), strained by rapid economic growth, remains a major challenge for the country despite some improvement in recent years, with particular concerns about the quality of roads (120th) and ports (113th.
Strong external demand for local commodities, especially from China and other Asian economies, coupled with good macroeconomic management have allowed the countries in the region to put their short-and medium-term growth outlooks on a glide path
Despite this rather optimistic outlook, the region may face the interrelated potential headwinds of a less robust recovery in the United states, a deceleration in the economic growth of China and other Asian emerging economies,
and the sovereign debt crisis in Southern Europe that is affecting the economic growth forecast in all of Europe.
Against this backdrop, boosting national competitiveness by raising productivity is the best way to ensure economic growth over the longer term and increase the region's resilience to economic shocks.
Chile, at 33rd place, shows a rather stable performance and remains the most competitive economy in Latin america.
As the economy steadily moves toward a higher stage of development, many economic activities will require higher levels of skills and innovation in order to increase their competitiveness potential.
Panama, at 40th place and nine ranks up since last year, continues its steady progress
and consolidates its position as the most competitive economy in Central america. Panama leverages its traditional strengths with its very good transport infrastructure (33rd), especially for ports (4th;
despite the worrying inflation rate of nearly 6 percent; its efficient financial markets (9th; and its relatively high levels of competition (31st) and openness to FDI (9th.
which remains one of the biggest challenges to diversifying the national economy. However, little progress is observed in Panama's institutional setup,
which sharply affect economic activity, the country still benefits from well-functioning institutions (24th) and good infrastructure (22nd).
and a fairly sophisticated business community (36th) help foster innovation in a service-oriented economy despite the low R&d investment (72nd) and technological innovation capacity (91st).
Brazil goes up five positions to attain 48th place on the back of a relative improvement in its macroeconomic condition despite its still-high inflation rate of nearly 7 percent and the rise in the use of ICT (54th).
in order to continue improving the competitive edge of the economy. The functioning of public institutions is assessed still poorly (100th) because of the high costs associated with the lack of security (137th) and the low trust of the business community in politicians (97th.
The lack of effective competition (100th), especially in some key strategic sectors, also hinders an efficient allocation of resources that spills over into most sectors of the economy.
despite a rise in inflation have buttressed this upward trend, while the situation in most of the other pillars has remained stable
Furthermore, as the economy moves to higher levels of development and explores ways to diversify away from its large mining sector, its low quality of education (132nd), poor use of ICT (89th),
As the economy continues to improve steadily, with a growth rate of 4. 5 percent, unaddressed challenges in these areas that hinder the competitive edge of national businesses seem to become more evident,
As Uruguay's economy moves toward higher levels of development, some doubts arise about the ability of the traditionally praised educational system to generate the skills that businesses require (107th), the overall availability of scientist and engineers (117th),
This, coupled with weak macroeconomic management (126th) resulting in inflation rates above 20 percent and a budget deficit above 5 percent of national GDP,
while economies that were affected more significantly by unrest and political transformations tend to drop or stagnate in terms of national competitiveness.
Qatar reaffirms once again its position as the most competitive economy in the region by moving up three places to 11th position
reducing the country's vulnerability to commodity price fluctuations will require diversification into other sectors of the economy
and the country attempts to diversify its economy, which will require a more skilled and educated workforce.
especially as this is an area where Saudi arabia continues to lag behind other Gulf economies. The United arab emirates gains three places in the GCI to take the 24th position.
and support economic growth going into the future. Jordan improves by seven positions to 64th rank. The country was affected considerably by the global financial and economic crisis in recent years.
GDP growth slowed down to 2. 3 percent annually in 2010 and has returned not to pre-crisis levels
which would trigger efficiency gains in the domestic economy as well as transfer of knowledge and technology.
Many economic policy challenges lie ahead for the new government to put the country on a sustainable and equitable growth path.
For Egypt to more fully benefit from the considerable potential that lies in its large market size and proximity to key global markets, the country will have to raise its productive potential across the domestic economy.
and contribute to energizing the economy by allowing for new entrants. And third, making labor markets flexible (135th) and more efficient (141st) would allow the country to increase employment in the medium term.
Indeed, the region has bounced back rapidly from the global economic crisis, when GDP growth dropped to 2. 8 percent in 2009.
While some African economies improve with respect to national competitiveness this year South africa and Mauritius, the two African countries in the top half of the rankings, remain stable.
remaining the highest-ranked country in Sub-saharan africa and the third-placed among the BRICS economies.
The country benefits from the large size of its economy particularly by regional standards (it ranks 25th in the market size 14 The Global Competitiveness Report 2012 2013:
These combined attributes make South africa the most competitive economy in the region. However, in order to further enhance its competitiveness,
which is ranked 132nd out of 144 economies the result of high rates of communicable diseases and poor health indicators more generally.
Botswana moves up one place to 79th, one of the top five economies in the region.
The economy is supported also by financial markets that are developed well by international standards (24th) and a relatively efficient labor market (39th.
and a drop in inflation, although it remains in the double digits) and a financial sector that is recovering from its 2009 crisis. The country has a number of strengths on
despite a slight improvement since last year, the institutional environment does not support a competitive economy because of concerns about the protection of property rights, ethics and corruption, undue influence,
And despite efforts to improve its macroeconomic environment including the dollarization of its economy in early 2009
which brought down inflation and interest rates the situation continues to be bad enough to place Zimbabwe among the lowest-ranked countries in this pillar (122nd),
Mozambique ranks 138th this year and needs improvements across many areas to lift the economy onto a sustainable growth and development path, particularly in view of its natural resource potential.
Macroeconomic stability is undermined further by double-digit inflation, although recent efforts seem to be bearing some fruit in containing price rises.
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