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Navigating the nexus of science, technology, innovation and productivity: Productivity Puzzles blog

The latest episode of Productivity Puzzles steps away from the usual panel format to engage in a reflective conversation between host Professor Bart van Ark and Dirk Pilat, a seasoned expert with more than three decades of experience in shaping science, technology, and innovation (STI) policies. Dirk’s journey has spanned various roles at the OECD and he now works as a research fellow at The Productivity Institute. This episode analyses the multifaceted relationship between policy, innovation, and productivity, exploring how these elements intersect to drive economic growth and development.

The power of science and technology policies

The conversation begins with a dissection of the impact of science and technology on productivity. While science is recognised as a nurturing ground for new technologies, the podcast explores whether science truly stands as the main engine of productivity. Dirk emphasises that, while science isn’t the primary driver of productivity, it undeniably fuels technological progress, often with considerable time lags. He highlights how investment in public research contributes to growth and productivity, citing the latest quantitative economic research findings. The conversation examines the distinction between breakthrough and incremental innovation, with Dirk pointing out the crucial role of science in both realms. The COVID-19 pandemic also serves as a testament to the pivotal role of science in addressing global challenges and shifting circumstances.

As the technological landscape evolves, a plethora of policies come into play, encompassing areas such as digital security, privacy, data protection, AI risk assessments, and regulatory frameworks for emerging technologies like biotechnology and synthetic biology. Dirk observes that economists often overlook technology policies within their framework discussions. He points out that the economic understanding of the profound impact of such policies on productivity remains relatively limited.

Innovation and its complex landscape

Transitioning to the “I” in STI, the podcast navigates the intricate relationship between innovation, technology, and productivity. Dirk raises an important concern—many productivity researchers tend to focus solely on the impacts of technology, disregarding the complementary investments required to make technology truly productive. He underscores the need to view innovation in tandem with various investments in skills, processes, and organisational changes. The discussion extends to the growing importance of innovation policies and scoreboards. While the Global Innovation Index provides a ranking, Dirk sheds light on the complexities of combining innovation inputs and outputs and offers insights into the factors driving innovation performance.

Unpacking pro-productivity policies

When discussing pro-productivity policies and their evolving landscape, the episode touches on the resurgence of industrial policies, noting their historical role in shaping economies. In light of climate change and global challenges, these policies are finding new relevance, driving structural changes and achieving policy goals. Bart and Dirk discuss their joint study, written with Klaas de Vries, conducted on pro-productivity policies across the G-20 nations. This study led to the development of a typology, shedding light on various strategies to boost productivity beyond the realm of STI policies.

The role of pro-productivity institutions

The podcast concludes with a discussion on pro-productivity institutions, focusing on their significance in driving economic growth. Dirk offers insights into the emergence of such institutions in different regions, highlighting their varying roles and remits. The conversation explores the effectiveness of these institutions and the impact they have on productivity enhancement. Notably, the discussion circles back to the absence of an official government-mandated Productivity Commission in the UK, sparking thoughts on the need for such an entity and its potential contributions.

In a rapidly evolving landscape, this episode of Productivity Puzzles underscores the need for multifaceted strategies, forward-thinking policies, and collaborative efforts to unlock the true potential of productivity in the modern era. Listen to the podcast on our website or wherever you get your podcasts.