Jul 31, 2022 12:00:00

What are the 'six ways' for the government to promote innovation that leads to economic recovery?

Amid COVID-19 and the global recession, policymakers, science and industry leaders are looking to new innovations to fuel economic recovery. Alicia Cameron, a senior research consultant at the

Australian Commonwealth Scientific and Industrial Research Organization (CISRO) , explains the '6 ways' the government promotes such innovation.

6 ways governments drive innovation – and how they can help post-pandemic resilience
https://theconversation.com/6-ways-governments-drive-innovation-and-how-they-can-help-post-pandemic-resilience-186910

◆ 1: Set up an industrial cluster
Mr. Cameron argues that creating clusters and hubs like Silicon Valley , a high-tech industrial cluster, will promote innovation, and there is evidence that high-tech clusters actually improve national competitiveness. That's what I'm talking about. “Industrial clusters (more generally industrial cities) are centers of innovation, productivity, skills development and the creation of new enterprises . We can create regional brands such as watches from Savile Row or suits from Savile Row.”

Several governments are working with public research institutes to build science and technology clusters, but there have been few successful cases. Attempts to accelerate existing or emerging industrial clusters by providing financial incentives, on the other hand, have been more successful.

◆ 2: Strengthen support for culture and lifestyle
This is an approach to build an environment conducive to the birth of innovative entrepreneurs by strengthening local lifestyles, culture and public support. Some urban regeneration projects aim to foster interaction, conversation and group learning among residents, creating knowledge sharing and creative partnerships among people. However, Cameron points out that improving lifestyles does not necessarily lead to innovation, and in some cases, it may lead to higher-end preferences, which may cause adverse effects such as increased living costs.

◆ 3: Adopt a skill-driven approach
Another approach to fostering innovation is to attract local talent with scarce skills. This can be achieved by creating incentives to attract quality immigrants to the area or by focusing on educating the local population.

However, if the focus is solely on skills development and no continued employment or opportunity is ensured, the highly skilled people will migrate to better suited places. Therefore, it is important to integrate skill development with local opportunity creation.

◆ 4: Provide funding for medium- to long-term missions
A mission-based approach is achieved by pooling private and public funds to address medium- to long-term challenges. The most famous example is the ``

Apollo program '' that was advanced in the 1960s and 1970s in the United States, and various innovations were born in efforts to achieve the mission.

Since then, government and corporate activities with social missions have become commonplace. Famous examples include zero carbon emissions initiatives, SDGs , and an international fund that funds pharmaceutical research institutes that develop vaccines.・Various activities are supported by government and private funds, such as CEPI .

◆ 5: Accelerate funding and investment
One of the key factors in fostering innovation is increasing funding and commercialization of new technologies to universities, research institutes and companies conducting research and development. Spending on risky R&D may decline as a country develops, but further progress will come from the risky process of creating new technologies.

Venture capital , which actively invests aiming for high returns, plays an important role in the expansion of start-up companies outside the government. Investment by companies is also key.

◆ 6: Government funding in the technology sector
Government funding of emerging technologies such as drones, IT, blockchain and robotics, and early engagement with innovative local companies will also bring benefits to the government, such as capacity building and co-development of technology. increase. In fact, this approach has been adopted in global innovation hotspots, including Silicon Valley, and has brought great advantages. The downside is that government funding for other fields is reduced, and the damage when it fails is great, and the government is required to have the ability to accurately evaluate technology, Mr. Cameron said.

None of the examples Cameron gave are ``magic bullets'' for innovation and economic recovery, and there is no guarantee that innovation will result from implementing any one. Cameron argued that the key is to pay close attention to local conditions while looking at productivity, technology development, and future markets, and to combine all approaches in a balanced manner.