ABSTRACT
The field of R&D and innovation policy is of increasing importance in the agenda of government in the OECD countries. Taken together, OECD governments spend approximately $300 billion per year on R&D, which is between 1 and 2 per cent of OECD GNP (European Commission, 1994: Figure 1b. 1, p. 15). But although the size of expenditure makes it an important field, it of course remains much smaller than other major areas of public spending; the importance of R&D policy derives not from the scale of expenditure but rather from what is held to be its central role in achieving policy objectives that lie well outside the arena of R&D policy as traditionally conceived. The Maastricht Treaty, for example, specifically mentioned the role of R&D policy in industrial change, regional cohesion and so on; the communiqué from the G7 summit in Detroit on unemployment laid great emphasis on R&D and innovation policies in reducing OECD unemployment, and this theme was repeated in the EC White Paper on unemployment (and it is worth noting that the current OECD work programme on unemployment focuses almost exclusively on technological change issues). This emphasis is reflected in action. Almost the first major policy document from the Clinton administration was on innovation policy, and this has been followed up by fairly significant expenditure decisions-the new National Institute for Standards and Technology has been the only institution in the Federal government to grow rapidly during the first phase of the Clinton administration; in the EU, the budget of FRAMEWORK, the overall R&D programme budget, is one of the few growing areas. Finally, it could be argued that R&D is also being taken more seriously in finance ministries as one effect of the so-called ‘new growth theory’, which emphasizes dynamic scale economies resulting from knowledge creation.
