workshop on productivity bern 16-18 october 2006 dominique guellec economic analysis and statistics...

Workshop on ProductivityBern 16-18 October 2006

Dominique Guellec

Economic Analysis and Statistics DivisionDirectorate for Science, Technology and Industry

Productivity Growth and Innovation in Switzerland: an International perspective

2

Productivity and Innovation in Switzerland

This presentation will compare productivity patterns of Switzerland with other countries; it will analyse the determinants of productivity related to innovation, and in turn the economic and institutional conditions which influence innovation.

Structure of the presentation:

1) Productivity

2) Innovation

3) Framework conditions

3

Productivity and Innovation in Switzerland

Major source of information for this presentation:

The OECD Compendium of The OECD Compendium of Productivity Indicators - Productivity Indicators -

20062006

4

Productivity and Innovation in Switzerland

Graph 1.1. Catch-up and convergence in OECD income levels, 1950-2005, US = 100

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

1950

1953

1956

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

France

Germany

Sweden

Switzerland

Finland

5

Productivity and Innovation in Switzerland

Graph 1.2. Income and

productivity levels, 2005

Percentage gap with respect to UD GDP per

capita

-40 -30 -20 -10 0

SpainEU-19 (3)

Italy

OECDGermany

France Japan

FinlandUnited KingdomBelgiumSwedenAustria

Australia

CanadaDenmark

NetherlandsSwitzerland

Effect of labour utilisation

-40 -30 -20 -10 0 10

1

2

3

4

5

6

7

8

9

1 0

1 1

1 2

1 3

1 4

1 5

1 6

1 7

Percentage gap with US GDP per

hour worked

-40 -30 -20 -10 0 10 20

1

2

3

4

5

6

7

8

9

1 0

1 1

1 2

1 3

1 4

1 5

1 6

1 7

6

1995-20002000-2005

Growth of GDP per capita

-2 0 2 4 6

Finland

Australia

UnitedKingdom

Sweden

Spain

Canada

UnitedStates

J apan

OECD19 (2)

Denmark

EU15

Belgium

Austria

France

Netherlands

Germany

Switzerland

Italy

Growth of GDP per hour worked

-2 0 2 4 6

= Growth in labour

utilisation (1)

-2 0 2 4 6

+

7

Productivity and Innovation in Switzerland

Graph 2.1: GERD as a % of GDP - 1995-2004(source OECD - MSTI database)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Sweden

Finlan

d

Japa

n

Switzer

land

United S

tate

s

Germ

any

Denmar

k

Total

OECD

Austri

a

Franc

e

Canada

Belgium

EU-15

United K

ingdom

Nether

lands

Austra

liaSpa

in

%

1995

2004

8

Productivity and Innovation in Switzerland

Graph 2.2: BERD as a % of GERD - 1995-2004(source OECD - MSTI database)

0

10

20

30

40

50

60

70

80

Korea

Japa

n

Sweden

Switzer

land

Germ

any

United S

tate

s

Finlan

d

Belgium

Denmar

k

Total

OECD

United K

ingdom

EU-15

Franc

e

Nether

lands

Austri

aSpa

in

Canada

%

1995

2004

9

Productivity and Innovation in Switzerland

Graph 2.3. Government funded R&D as a % of GDP - 2004

0.00.10.20.30.40.50.60.70.80.91.0

Sweden

Finlan

d

Franc

e

United S

tate

s

Austri

a

Germ

any

Austra

lia

Denmar

k

Total

OECD

Canada

Switzer

land

EU-15

Nether

lands

United K

ingdom

Japa

n

Belgium

Spain

10

Productivity and Innovation in Switzerland

Graph 2.4. Share of the pharmaceutical sector in total BERD (2004)Source: OECD - MSTI data base

0

5

10

15

20

25

30

35

40

Switzer

land

Denmar

k

United

King

dom

Belgium

Sweden

Franc

e

EU-15

Spain

Nethe

rland

s

Total O

ECD

Canad

a

United

Stat

es

Japa

n

Germ

any

Austri

a

Austra

lia

Finlan

d

%

11

Productivity and Innovation in SwitzerlandGraph 2.5. Patenting intensity by technical fields (number of

patent families over GDP, 2002)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Finlan

d

Switzer

land

Japa

n

Sweden

Germ

any

Nether

lands

United S

tate

s

Europe

an U

nion

Franc

e

Belgium

Denmar

k

United K

ingdom

Austri

a

Canada

Austra

liaIta

ly

Irelan

d

Spain

Biotech

ICT

Other technicalfields

12

Productivity and Innovation in SwitzerlandGraph 2.6. Share of countries in EPO patent

applications, 2003

0%

5%

10%

15%

20%

25%

30%

35%

United

Sta

tes

Japa

n

Germ

any

Fran

ce

United

King

dom

Korea

Switzer

land

Nethe

rland

sIta

ly

Canad

a

Sweden

Belgium Isr

ael

Nanotech

Total

13

Productivity and Innovation in Switzerland

Graph 2.7. Contribution of ICT manufacturing to value added per person engaged, in % points

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

Nethe

rland

sIta

ly

Canad

a

Denm

ark

Germ

any

Austri

a

United

King

dom

Switzer

land

Belgium

Fran

ce

Japa

n

United

Sta

tes

Sweden

Finla

nd

Irelan

d

1990-95

1995-2002*

14

Productivity and Innovation in Switzerland

Graph 2.8. International co-inventions (Share of domestic inventions with at least one foreign resident as co-

inventor)

0

10

20

30

40

Belgiu

m

Irelan

d

Switzer

land

Canad

a

Austri

a

Unite

d Kin

gdom

Spain

Denm

ark

Austra

lia

Sweden

Franc

e

Nethe

rland

s

Finlan

d

Unite

d Sta

tes

Ger

man

yIta

lyEU15

Europ

ean U

nion

OECD

Japa

n

%

1990-92

2000-02

15

Productivity and Innovation in Switzerland

Graph 2.9. Domestic ownership of foreign inventions (share of inventions owned by domestic residents which have been invented

abroad)

0

10

20

30

40

50

60

Switzer

land

Irelan

d

Nethe

rland

s

Belgiu

m

Sweden

Austri

a

Canad

a

Finlan

d

Franc

e

Unite

d Kin

gdom

Denm

ark

Unite

d Sta

tes

OECD T

otal

Ger

man

y

Austra

lia

Europ

ean U

nion (1

5)

Europ

ean U

nion

Spain

Italy

Japa

n

%

1990-92

2000-02

16

Productivity and Innovation in Switzerland

Graph 2.10. Foreign ownership of domestic inventions (share of domestic inventions owned by foreign residents)

0

10

20

30

40

50

Belgium

Irelan

d

Austri

a

United K

ingdom

Canada

Spain

Austra

lia

Franc

e

Switzer

land

Denmar

k

Nether

lands

Sweden

Italy

OECD

Germ

any

United S

tate

sEU15

Europe

an U

nion

Finlan

d

Japa

n

%

1990-92

2000-2002

17

Productivity and Innovation in Switzerland

Graph 3.1. Graduation rates at doctoral level, 2002

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Japa

n

Canada

Denmar

k

Spain

Belgium

Austra

lia

Nether

lands

United S

tate

s

Franc

e

United K

ingdom

Austri

a

Finlan

d

Germ

any

Switzer

land

Sweden

Other fields

Science andEngineering

18

Productivity and Innovation in Switzerland

Graph 3.2. Scientific articles per million population - 2001

0

200

400

600

800

1 000

1 200

Sweden

Switzer

land

Finlan

d

Denmar

k

United K

ingdom

Nether

lands

Austra

lia

Canada

United S

tate

s

Belgium

Austri

aEU15

Germ

any

Franc

e

OECDJa

pan

Irelan

d

Spain

Italy

Other fields

Life sciences

19

Productivity and Innovation in Switzerland

Graph 3.3. Venture capital investment flows as % of GDP 1995-2002

0.0

0.1

0.2

0.3

0.4

0.5

0.6

JPN

AUTAUS IT

ACHE

DNKESP

DEUFRA IR

LFIN

BELSW

EGBR

NLDCAN

USA

Buy-outs and others

Expansion

Early stage

20

Productivity and Innovation in Switzerland

Graph 3.4. Overall product market regulation - 2003 (Source: OECD 2005)

0

0.5

1

1.5

2

UKUSA

Canada

Japa

n

Germ

any

OECD

Switzer

land

Franc

eIta

ly

21

Productivity and Innovation in Switzerland

Graph 3.5. Patents applications files by Public Research Institutions as a % of total patents, 2001-2003

0

2

4

6

8

10

12

14

Austra

lia

United

King

dom

Belgium

Canad

a

Fran

ce

EU15

United

Sta

tes

Spain

OECD

Denm

ark

Italy

Korea

Switzer

land

Japa

n

Nethe

rland

s

Germ

any

Austri

a

Finla

nd

Sweden

22

Productivity and Innovation in Switzerland

Graph 3.6. Share of University research funded by business - 2004

0

2

4

6

8

10

12

14

Germ

any

Belgium

Switzer

land

Canada

Spain

Nether

lands

EU-15

Total

OECD

Finlan

d

United K

ingdom

Sweden

Austra

lia

United S

tate

s

Austri

a

Denmar

k

Japa

n

Franc

e

%

23

Productivity and Innovation in Switzerland

Conclusions (1) Switzerland features very well in terms of

GDP per capita. It is due to its high labour utilisation, while the productivity of labour is in the OECD average.

Productivity growth has been slow in Switzerland over the past decade.

24

Productivity and Innovation in Switzerland

Conclusions (2) Switzerland is strong in knowledge

intensive industries (pharma, finance) and its has all factors needed to be innovative: High R&D expenditure, skilled labour force, strong university system, high internationalisation of R&D.

BUT: Switzerland is relatively weak in emerging technology fields, where entrepreneurship is the key factor.

25

Productivity and Innovation in Switzerland

Policy recommendations

=> Facilitate entrepreneurship in emerging technology fields

Reduce barriers to domestic competition Improve efficiency of public support for

R&D Raise efficiency of bankruptcy

procedures