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OECD: investments in R&D key to overcoming recession

According to the OECD, governments should not cut R&D expenditures "essential to the country's future."

A. R. | 31 may 2010

Coinciding with the launch of its new Innovation Strategy, Ángel Gurría, Secretary General of the Organization for Economic Co-operation and Development (OECD) said: “many countries increased their public investment in education, research and smart infrastructure to strengthen their growth performance. But now with the weight of fiscal deficits, there is a risk of such spending being cut.”

According to Gurría, this would be a mistake. “'While cuts may provide short-term fiscal relief, it will hurt growth in the long term, not to mention the ability to deal with challenges such as climate change, hunger and disease; all of which require innovative solutions,” he said. Instead of cuts, he encouraged governments to opt for the R&D funding without reservations to spur an “innovation crusade.”

This innovation strategy should also be accompanied by measures to ensure the flexibility and the good use of these investment, the head of the OECD said. Measures such as reducing bureaucracy, increasing university independence and ensuring public access to research results multiply the benefits of investment in R&D. More flexible fiscal policies would also help create new technology companies.

The OECD’s new Innovation Strategy identifies five priority areas for government action in this regard: the promotion of an entrepreneurial culture, incentives for research, development of communication technologies (especially broadband networks), collaboration between governments to address society’s priorities and the implementation of improved control measures for investment in science and technology.

In a similar vein, in the Europe 2020 strategy the European Union identified R&D as one of the engines that will help the continent emerge from the current economic crisis.

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