Workshop: "How to leverage the potential of the digital transformation for innovation and research?"

20 June 2018

 Paris - OECD Conference Centre

 

 

Shortcut URL: www.innovationpolicyplatform.org/digitalinnovation 

#TIP_OECD


Much is in flux with the digital transformation and innovation processes are no exception. Changes are driven by the wider availability of data and better ways to process and analyse them (e.g. software tools, AI), changes in the processes for developing innovations (often allowing for “scale without mass”) and the emergence of new ways of bringing products to the market (e.g. through digital platforms). These transformations apply to the research, development and commercialisation stages of innovation. The very innovation process is fundamentally different in the intangible economy compared to manufacturing, as illustrated by the case of software that entails little “production” but very frequent update and innovation cycles. These fundamental changes lead to tensions within companies and industries together with the emergence of new actors, in order to seize the opportunities of the digital transformation. These changes to the very nature of innovation affect the opportunities and risks different players (large companies, SMEs, research organisations, and start-ups) have with research and innovation. 

On the one hand, a number of digital tools are accessible to all, and establish a level-playing field between the one-person start-ups with a laptop and Internet access and large companies. Indeed, it is no longer only large established players that dominate industries: new players are involved in the digital transformation of the automotive and pharmaceuticals sectors, in commercializing advances in genomics or offering on-demand transportation services, following the model introduced by Uber. On the other hand, fully exploiting the potential of some of the new digital technologies may require large-scale investments only affordable for large firms and certain research institutions. Processes may be computerised but require large data sources not accessible to all, and platforms may offer opportunities for entry to some but not all, and may disproportionally benefit the owners of those platforms. In the competition for scarce skills, large players are favoured as they can offer higher wages.

The workshop brought together experts and policy makers to discuss what we know about the effects of the digital transformation on the innovation performance of various types of actors, including industry-science relationships and the distributional impacts of innovation. The workshop also discussed the implications of these transformations on innovation policies.

The outcomes of the workshop will directly contribute to the OECD Going Digital Horizontal Project and to the TIP digital and open innovation project, which aims to identify innovation policy priorities in the context of the digital transformation. 

 

AGENDA                                Speaker's biographies

AGENDA

9h30 - 10h00: Welcoming and introduction to the workshop

  • Göran Marklund, Deputy Director General for External Matters, VINNOVA, Sweden, and Chair of the OECD TIP Working Party
  • Dirk Pilat, Deputy Director, Directorate for Science, Technology and Innovation, OECD
  • Caroline Paunov, Senior Economist, Directorate for Science, Technology and Innovation, OECD: Introduction to the workshop and introductory quiz

10h00-11h00: Session 1 - Keynote : Capitalism without Capital – Prof. Jonathan Haskel

  • Jonathan Haskel, Professor of Economics at Imperial College Business School, Imperial College London

In their new book ‘Capitalism without Capital: The Rise of the Intangible Economy’ (2017), Jonathan Haskel (Imperial College London) and Stian Westlake (Nesta) bring together a decade of research on how to measure intangible investment and its impact on national accounts, showing the amount different countries invest in intangibles, how this has changed over time, and the latest thinking on how to assess this. They explore the unusual economic characteristics of intangible investment, and discuss how these features make an intangible-rich economy fundamentally different from one based on tangibles. Capitalism without Capital concludes by presenting three possible scenarios for what the future of an intangible world might be like, and by outlining how managers, investors, and policymakers can exploit the characteristics of an intangible age to grow their businesses, portfolios, and economies.

Book reviews have been published in the Economist and The Times. An opinion article related to this book has been published in The Guardian

11h00-11h30: Coffee break

11h30-13h00: Session 2 - Opportunities and barriers for research collaboration in the digital age

Digital technologies provide unprecedented opportunities for research. These include the possibility to collect and exploit vast amounts of real-time data, or conduct large-scale computerised experiments, which allow for many more trials than could be realised by human researchers. Investments needed to use digital technologies effectively in research and to create and integrate different competences to fully exploit the digital potential may, however, be too high (both regarding infrastructure and skills) for all firms and research institutions to have access to them. Consequently, the relative cost of engaging in innovative research activities may lead to the exclusion of the firms and researchers that are not able to afford such costs, resulting in a concentration of R&D as is the case today. 

Questions: 

  • To what extent has the digital transformation changed opportunities to engage in research activities related to innovation for different actors and places? 
  • Are changes similar across academic disciplines and industry sectors? What are the expected trends?  To what extent have appropriate multidisciplinary and multi-sectoral teams emerged to exploit the potential of data in research? 
  • Should policy intervene to ensure more widespread opportunities to innovate at the research stage? What are the organisational changes needed to facilitate a re-orientation of research organisations (and firms) in that regard?
  • How does the digital transformation facilitate opportunities for extending research networks and collaborations with others (researchers, research organisations and firms)? 

 

Perspectives from ongoing TIP work:

  • Dominique Guellec, Head of Division, Directorate for Science, Technology and Innovation, OECD

Speakers:

  • Peter Leihn, Commercial Director, CSIRO’s Data61, Australia
  • Michaela Muruianu, Programme Lead – Artificial Intelligence, Digital Catapult, UK 
  • Jean-Michel Dalle, Managing Director, Agoranov, France 
  • Claire Stolwijk, Researcher, Strategy and Policy for Innovation, TNO, the Netherlands
  • Steven Drew, Vice President of Business Development in Europe, InnoCentive 

13h00-14h30: Lunch

14h30-16h00: Session 3 - Opportunities and challenges for developing and commercialising innovation in the digital age

The development and commercialisation stages of innovation have also been affected by the digital transformation. For instance, once developed, new software is fundamentally different from physical products such as cars – the latter requiring production before they are taken to the market, while the former can be quickly disseminated at little cost. This has been referred to as “scale without mass.” As intangible product components are increasingly important, the development process of innovation is gradually shifting towards this new model. Commercialisation is also changing in this context, with new ways of launching products and services, nearly instantaneously and at global scale, and benefitting from networks. This offers more opportunities for small actors to compete with larger ones compared to the past. However, platform dynamics and network effects may disproportionately compensate larger players, with an opposite effect on the actual opportunities for other to innovate.

This panel focused on opportunities and challenges across different sectors, with a focus on the agri-food, automotive/transportation and retail sectors – representatives of primary, manufacturing and services sectors, respectively. These sectors (and their own boundaries) are changing with the digital transformation, and constitute excellent examples to illustrate the pervasiveness of digital transformation across the whole spectrum of economic activities, at the same time that allow distinguishing different sectoral dynamics. 

 

Questions: 

  • To what extent has the digital transformation changed opportunities for different actors to develop and commercialise innovations across different value chains? 
  • Are changes similar across actors and industries and in particular across agro-food, automotive/transportation and retail sectors?  
  • What can policy do to ensure more widespread opportunities? 

 

Perspectives from ongoing TIP work:

  • Sandra Planes-Satorra, Junior Policy Analyst, Directorate for Science, Technology and Innovation, OECD

Speakers:

  • Zoltán Cséfalvay, Ambassador, Permanent Representative of Hungary to the OECD, and author of TECHtonic Shifts
  • Frank Nagle, Assistant Professor of Strategy, Harvard Business School
  • Ido Dor, Executive Vice President and General Manager Ag-Biologicals, Evogene, Israel
  • Eija Laineenoja, Senior Adviser, Ministry of Economic Affairs and Employment, Finland
  • Young-Jun Moon, Senior Research Fellow and Chief Director, Department of National Transport Technology R&D, Korea Transport Institute (KOTI)

16h00-16h30: Coffee break

16h30-17h30: Session 4 - Innovation policy implications

This session took stock of the previous discussions and explored how innovation policy should adjust to those new realities in order to ensure different actors leverage the potential of digital innovation. The discussions involved all workshop participants that will gather in four small groups (see below). Each group developed a policy proposal that addressed one of the core challenges posed by digital innovation. 

The topics of focus were: 

  • Data access policies for innovation (group 1)
  • Speedy and agile policies in the digital age (group 2)
  • Investment in core technologies and the contributions of public research (group 3)
  • IP and market competition in the digital age (group 4)

 

17h45-18h00: Conclusions

  • Göran Marklund, Deputy Director General for External Matters, VINNOVA, Sweden, and Chair of the OECD TIP Working Party
  • Final quiz