University World News
09 February 2010 

Global Edition
Home
Special Report
News
Business
Features
Academic Freedom
Science Scene
HE Research and Commentary
People
Uni-Lateral
U-Say
World Round-up
Special Global Edition
Home
UNESCO Forum – Changing Dynamics
Africa Edition
Home
Africa
News
Features
HE Research and Commentary
Business
People
Uni-Lateral
World Round-up
Special Africa Edition
Home
Differentiation - Issue 0001
Race & SA Universities - Issue 0002

Eduniversal

Employment



Archives

Find an Article
Advanced Search

View Archives by Country

View Archived Editions:
* Global Edition
* Africa Edition
* Special Africa Edition

Higher

Useful

Information
Free Registration
About Us
Contact Us
Advertising
Terms and Conditions
Jean-Marc Rapp, President of the European University Association. He has promised an annual review of university rankings. See our News section.
Jean-Marc Rapp, President of the European University Association. He has promised an annual review of university rankings. See our News section.

Ariel University Center of Samaria in the hills of the West Bank. It is still not accredited as a university. See the story in our News section.
Ariel University Center of Samaria in the hills of the West Bank. It is still not accredited as a university. See the story in our News section.

The Université Paris-Dauphine, where 1600% fees increases for some courses have angered lecturers and students. See our news story. photo Alain Mengus
The Université Paris-Dauphine, where 1600% fees increases for some courses have angered lecturers and students. See our news story. photo Alain Mengus


CHET


FORD





  


GLOBAL: Invest in R&D to profit from crisis
Alan Osborn
21 June 2009
Issue: 0081



The world economic crisis has already begun to affect innovation and research in the better-off countries, but this may not be all bad news says the OECD, the association of the world's 30 leading economies.

One way of looking at the downturn is to see it as a "creative destruction" that could witness the birth of new hi-tech giants and offer greatly increased potential for today's technological leaders, says the OECD. The key is R&D spending.

In a new document, Policy Responses to the Economic Crisis: Investing in innovation for long-term growth, the OECD notes that business R&D expenditure and patent filings historically move in parallel with GDP, slowing markedly during the economic downturns of the early 1990s and of the early 2000s.

"Evidence for the current crisis confirms these findings," it says. In the fourth quarter of 2008, there was already a decline or slower growth in R&D spending and forecasts for 2009 confirm the trend. The OECD says a recent McKinsey survey of almost 500 large businesses indicated that "34% expect to spend less on a R&D in 2009 while 21% forecast an increase".

R&D was declining because it was mainly financed from cash flow which fell in economic downturns while small innovative firms were particularly hard hit because in many cases their primary asset was intangible, such as an idea or a patent and difficult to value, making it hard to borrow against, or sell, to stay afloat.

By contrast, the crisis could magnify the competitive advantage of research-intense firms that seized the opportunity to reinforce market leadership through increased spending on innovation and R&D.

The OECD states that many of today's leading firms such as Microsoft or Nokia were born or transformed in the "creative destruction" of economic downturns. And several of today's leading technology firms, such as Samsung Electronics or Google, strongly increased their R&D expenditures during and after the "new economy" bust of 2001.

By the same token, the crisis also presents an opportunity to raise investment in human capital. The OECD says support for education and training can accelerate the healthy transition to new jobs and emerging opportunities and is essential for innovation, which requires a broad set of skills.

Among policy initiatives, the OECD lists investment in educational infrastructure and reform of education and training policies. Some countries, such as Spain and Portugal, are using the crisis as an opportunity to reinvigorate reforms to higher education institutions. Such reforms are needed to adapt to the post-crisis world where new sectors would appear, old ones would fade away and new work organisations would be introduced.

"Entrepreneurial skills and attitudes, risk-taking behaviour, creativity, etc, will be crucial competencies in the economy of the future that need to be nurtured by more adaptive and innovative education and training systems," the OECD report says.

The publication lists the measures taken so far by its member countries, noting the importance of international coordination and regretting that most stimulus packages "have been elaborated with a national view". But these are relatively early days and it says more work will be needed to monitor the implementation and assess the impact of these economic recovery measures.

alan.osborn@uw-news.com

Printable version
Email to a friend
Comment on this article




  

Related Links
About University World
Other articles by Alan Osborn
More Business
Newsletter Archives

Most Popular Articles
SOUTH AFRICA: Student drop-out rates alarming

CHINA: Chinese students to dominate world market

SOUTH AFRICA: Universities set priorities for research

FRANCE: Smallest university created

UK: Few surprises in new THES rankings

OECD: Worldwide ‘obsession’ with league tables

UK: Two centuries of honours degrees to disappear

OECD 1: US share of foreign students drops

AUSTRALIA: Research quality scheme scrapped

US: Keeping stem cell research alive
Copyright University World News 2007-2009