National innovation policies tend to be overarching,

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1 THEMATIC NOTE 1 National Innovation Policy Johannes Roseboom, Consultant SYNOPSIS National innovation policies tend to be overarching, attempting to coordinate a wide range of more specific policies (for science and technology, education, IPRs, the economy and industry, trade, and taxation) and foster optimal conditions for innovation. A national innovation policy (based on NIS ideas and concepts) enables the formulation of an agricultural innovation policy in two ways. First, its economy-wide perspective makes it possible to address issues that should be dealt with at the level of the national economy rather than individual sectors. Second, it promotes innovation system thinking at the sector level. This note describes the steps and tools in this policy-making process. BACKGROUND AND CONTEXT The recent rise of innovation policy around the world has been strongly influenced by the NIS school of thinking. NIS thinking has been picked up by national and international policy makers remarkably quickly throughout the world, partly because the OECD was an early promoter of the concept but more importantly because countries are looking for ways to respond to increased global competition. How can a country improve its competitive edge? This question is arguably even more important for the world s poorest countries than for wealthy ones. However, the NIS concept does not provide a simple blueprint for organizing innovation. It is foremost an analytical tool for policy making and planning. A national innovation policy is not just an extension of the science and technology policy. It is a higher-level policy integrating science and technology, economic, industrial, infrastructure, taxation, trade, labor, and education policies (to name the most relevant). For this reason, it is not limited to one particular ministry or agency. It requires substantial coordination and consensus building among ministries as well as socioeconomic partners such as the business sector, trade unions, and value chain organizations. The mix of policies for innovation depends on the country s political orientation and objectives, and different forms of innovation require different policy instruments and responses (OECD 2010). One developing country with a very articulate innovation policy and strategy is Chile (box 6.3). ACTIONS NEEDED The role of an innovation policy is to create the best possible conditions for innovation by developing a range of public goods that are essential for an innovative knowledge economy. The best possible conditions will vary significantly from one country and sector to another, depending on the development phase, economic structure, and national priorities. Five key functions have been identified and are recommended as the primary targets of a national innovation policy. 1 First, organize and implement a national innovation policy. Such a policy should mobilize and engage the various actors and stakeholders within the innovation system, provide guidance regarding their roles and functions within the system, and give a sense of direction, explaining what they want to achieve together. Important steps in this process are described in box 6.4. In most countries, the overall objective of the national innovation policy is to facilitate the transition toward a knowledge economy, resulting in increased competitiveness and sustainable economic growth. As noted in the module overview, a national innovation policy should provide an overall framework within which sector-specific and technology-specific innovation policies should fit. This approach may require improved coordination and coherence of policies and different layers of government. The national policy sets out overall priorities across sectors and technologies (and the public resources allocated to them), while the more specific policies set the priorities within a particular sector or technology field. 460

2 Box 6.3 Chile s Innovation Strategy Following a long period of stagnation from the mid- 1950s to the mid-1980s, Chile s economy started to take off, and for the past twenty-five years, it has been one of Latin America s better-performing economies. The opposition parties elected to government after 1988 continued the free-market policies introduced by the military junta to a substantial extent but with a greater appreciation of government s role in economic development, including its role in stimulating innovation. Chile s economy has been booming partly because of high revenues from copper exports. To invest those revenues wisely, the government decided to invest heavily in moving away from a predominantly resource-based economy (agriculture and mining) toward a knowledgeintensive economy. For this purpose, it created a national innovation fund for competitiveness (FIC, Fondo de Innovación para la Competividad), funded by a new tax on mining, in A newly created national innovation council for competiveness (CNIC, Consejo Nacional de Innovación para la Competividad), in which the various sectors and interest groups are represented, advises FIC on how to allocate its resources, while an interministerial committee on innovation (CMI, Comité de Ministros para la Innovación) is responsible for implementation. As part of this new initiative, CNIC has formulated a national innovation strategy. After extensive study and consultation, CNIC selected five economic clusters on which to focus science, technology, and innovation (STI) investments: agro-food, aquaculture, mining, tourism, and global services. For each selected cluster, a strategic board with public and private representation has been created to set cluster-specific priorities. The Strategic Board of the Agro-Food Cluster has identified the following subclusters as the most promising for further development and knowledge intensification: fruit, wine, processed food, pigs and poultry, and red meat. These priorities have been passed to the various STI funding agencies, which are organizing calls for proposals for these priorities or giving the selected clusters priority in more generic calls for proposals. Moreover, despite their name, competitive funding schemes are being used to cement stronger links within the innovation system by promoting cross-institutional collaboration between universities and research institutes and by promoting public-private partnerships in the form of technology consortia. The latter instrument not only cements collaboration between a research agency and the private sector but between companies that share a common technology platform. Since FIC s creation in 2005, public STI investments in Chile have more than doubled in real terms (reaching US$530 million in 2009). Public STI investments are projected to continue to grow by percent per year over the coming ten years. Parallel to the STI initiative, the Chilean government established a major scholarship scheme (Becas Chile) in 2008, which will allow some 30,000 Chileans to study abroad over the next ten years. The budget for this scheme is some US$6 billion and is also financed out of mining royalties. Source: Author. Second, improve the regulatory framework for innovation. Given the many actors within the innovation system and their often conflicting interests, a set of rules and regulations is needed (on dealing with IPRs, fair competition, technical standards, health, and environment, among others) to create a playing field that is transparent and fair. Third, foster innovation through education. Innovation depends on the level of education in the general population, including the knowledge and skills that people will need in the future and strategies to keep knowledge and skills up to date (in other words, to develop a capacity for lifelong learning). Innovation also depends on the education of science and innovation specialists more specifically, which may involve among other things motivating students to specialize in science. Fourth, facilitate the creation, exchange, and diffusion of knowledge. This is the core business of an innovation system. Knowledge should not be limited to knowledge generated only by research organizations (and as such codified in scientific publications and patents) but should include the knowledge (a large part of it tacit) accumulated within the economy of a country. It is important to make sure that knowledge (both scientific and industrial) is MODULE 6: THEMATIC NOTE 1: NATIONAL INNOVATION POLICY 461

3 Box 6.4 Developing an Innovation Policy Many of the steps or components of developing an innovation policy do not occur chronologically but simultaneously or in reverse order. They include: Policy analysis. This step requires a thorough understanding of existing policies and their influence on the innovation system (in other words, their interaction with institutions and actors). A functional analysis may be a useful input in grasping the strengths and weaknesses of the policies in place. Formulating policy advice. To a large extent, the political context determines whether policy makers are sensitive to evidence and how evidence reaches them. Knowledge of the political context and entry points for evidence and dialogue are essential. Influencing policy through research requires good data as well as credibility of the institution presenting the data. For new ideas to be embodied in policies, it is critical to prove that those ideas provide a solution to a real problem. In presenting such evidence, communications skills are highly important, and using a diversity of communications methods increases the chances of success compared to relying on a single method or pathway. Through links with media, intermediary organizations, and networks advocating for policy change, policy makers can be pressured from different angles to change policies in a certain direction. Policy making. Policy makers need to get involved actively in the multistakeholder exchanges and activities that occur to facilitate and realize innovation. When policy makers are immersed in a subject, evidence-based policy making becomes experiential policy making. Policy makers learn, through interaction and engagement with other system actors, how policies influence the system and what changes would be required. Policy implementation. Often the job ends for policy makers when the policy is written down and made official, yet stating the policy is only the starting point for change, not the end. An inclusive policy-making process makes it more likely that the policy will actually be implemented. When different stakeholders understand the need for policy change, have invested in it, and stand to benefit, there is pressure on the one hand to enforce the policies and on the other hand there is a greater likelihood that stakeholders will abide by the implemented rules and regulations. Source: Author, drawing on KIT adequately stored and accessible. An important variable in this context is the quality of a country s ICT infrastructure and the density and quality of its Internet connections. It is also important to stimulate the exchange of knowledge beyond national borders, which may involve measures to improve the language capabilities of knowledge workers, stimulate attendance at international scientific conferences, and create exchange programs and industry-specific study tours. Fifth, mobilize and allocate resources for innovation activities. Funding of innovation activities can range from fully public to fully private and everything in between, depending on the type of industry and activity. The national innovation policy should: (1) define which innovation activities require public support; (2) define the tax base for public funds (general versus specific taxes; see box 6.5); (3) define the type of funding instruments to be used (subsidies, tax breaks, patents, procurement, and so on); and (4) prioritize and allocate public resources across the various innovation activities. These principal functions of an NIS also remain relevant at the AIS level, but many of the policies shaping these functions at the AIS level are formulated as part of the national innovation policy. For example, most investments in education affect all sectors, and the same is true for many regulatory issues, such as IPR legislation and environmental standards. At the same time, the agricultural innovation policy may opt for sector-specific policies if the situation requires. For instance, it may choose to support plant breeders rights or agricultural advisory services. For this reason, it is important to coordinate the development of an agricultural innovation policy with the development of a 462 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK

4 Box 6.5 The Creation of Sectoral Science, Technology, and Innovation Funds in Brazil While Brazil has invested substantially in science and technology since the 1970s, the economic impact of these investments has been modest and uneven. In the 1990s, the Brazilian science and technology system was criticized for being too science oriented, placing little emphasis on innovation, and lacking stable funding because of economic problems. The Ministry of Science and Technology (MCT, Ministério da Ciência e Tecnologia) introduced major restructuring of the funding of the science and technology system in It set up sector-specific science, technology, and innovation (STI) funds (in part replacing older funds), which are financed through levies to be negotiated within each sector. In this way a substantial amount of new and more stable private resources were mobilized to finance STI of relevance to each specific sector. For sectors in which a levy was not feasible, the government increased the levy on foreign technology transfer payments from 15 percent to 25 percent. The increase finances 4 out of 15 funds. Of the 15 funds that have been established, 2 are not sector-specific but focus on bottlenecks in the STI system: the university-business fund and the fund for science infrastructure. The infrastructure fund is financed through a 20 percent levy on all of the other sector funds. The sector funds have the status of trust funds and are managed jointly by the academic community, industry, and government. The strong representation of industry in these funds was a particular innovation for the Brazilian STI system. The sector funds serve four major government objectives: (1) stabilize financial resources for mediumand long-term R&D; (2) improve transparency in funding decisions, merit reviews, and evaluations; (3) reduce regional inequalities; and (4) promote interaction between universities, research institutes, and companies. The selection of strategic sectors, their respective shares of the funds resources, the blend of basic and applied research, the required overall budget, and sources of support are all jointly decided by the academic community, private sector, and government. Source: IAC 2003; Roseboom national innovation policy and make sure that they are consistent. POTENTIAL BENEFITS The development of a national innovation policy usually reflects the priority that a country assigns to knowledge as an important (if not the most important) source of future economic growth, especially as capital accumulation levels off and the transition toward a capital-intensive economy is complete. A national innovation policy helps shift the emphasis in macroeconomic policy from physical capital to human and social capital. A national innovation policy can also help to create more coherence in a broad range of government policies dealing with issues such as economic development, education, competitiveness, trade, and R&D investment. More coherent policies should help to improve the overall effectiveness of the NIS. The more prominent role attributed to knowledge in economic development has sparked renewed interest in agricultural innovation and how to improve and modernize it. At the same time, NIS thinking is influencing AIS thinking in important ways: Far greater emphasis is placed on private R&D and innovation activities by private firms. Agricultural research and extension were traditionally viewed as government responsibilities. Relatively little attention was given to involving the private sector. Education receives greater emphasis as an important enabling factor in agricultural innovation, both on the farm and in research and extension agencies. The regulatory framework s importance in shaping innovation is more widely recognized; for instance, biofuel targets play an important role in shaping the biofuel innovation agenda. Innovation driven by market demand and market opportunities is given greater emphasis. More attention is paid to improving the mobilization, inclusion, and coordination of innovation actors and stakeholders. MODULE 6: THEMATIC NOTE 1: NATIONAL INNOVATION POLICY 463

5 POLICY ISSUES A national innovation policy in a developing country will need to address a number of important policy issues. For example, it will need to define the roles of the public and private sector in innovation; ensure that institutions and incentives are in place to govern and coordinate innovation; determine the priorities for innovation; come to terms with the environmental and social implications of innovation; and acknowledge the informal economy s role in innovation. Defining public and private roles in innovation From a market economy perspective, innovation is first and foremost a task of private entrepreneurs. Government policy should focus on creating an enabling environment for private innovation to take place. Some of these policies, such as well-functioning markets, sound corporate governance, and sound financial institutions, may not be specifically aimed at fostering innovation but are nonetheless important. Other policies, such as IPRs, the setting of technological standards, science education, and basic research, may enable private sector innovation more directly. When it comes to innovation, however, a great deal of market or systemic failure requires more direct government intervention or support (Edquist 2001). In primary agriculture, for example, the extreme fragmentation of production into small family farms has traditionally been a legitimate reason for the government to intervene directly. Governance and coordination A country s innovation performance depends in part on the strength of the institutional arrangements and incentive structures that govern innovation. Innovative activity is not governed by government alone. Actors from research and the business sector, as well as other stakeholders, play important roles. TN 2 provides a detailed discussion of governance in formulating innovation policy and coordinating innovation. Making strategic choices Most countries are too small to excel in all sectors and technologies. One has to be selective and make strategic choices to concentrate innovation investments in specific technology fields and sectors. Spreading resources too thinly will be counterproductive. How to make such strategic choices is a major policy issue and requires sound analysis of the options. Chile offers a good example of an innovation policy that makes clear strategic choices (box 6.3). Many countries avoid setting these priorities because they are highly sensitive from a political standpoint, but a characteristic shared by successful innovators such as Finland and the Republic of Korea is that they have restructured their economies strategically toward more knowledge-intensive industries (see TN 2). Environmental sustainability Many current production and consumption patterns are not sustainable in the long run. They deplete natural resources and are so polluting that they may cause climate change, with far-reaching repercussions for life on earth. Aside from raising overall productivity, innovation must meet increasingly stringent criteria for environmental sustainability and offer green solutions. It is virtually imperative for a national innovation policy to address this overwhelming challenge that faces humankind over the next few generations. Some countries are seeing the environmental crisis as an economic opportunity and positioning themselves as champions of green technologies (a small country like Denmark, for example, is a world leader in windmill technology). In agriculture, reducing greenhouse gas emissions is one of the major environmental challenges, along with developing strategies to cope with the effects of global warming. Social considerations The flipside of innovation is creative destruction. Jobs disappear to low-income countries or are replaced by more efficient production methods requiring less labor. Policy measures are needed for people to make the transition to more promising economic activities and new jobs. Education plays a major role in this process, including the concept of lifelong learning. Agriculture is a classic example of how innovation often results in fewer jobs. The exodus of labor from agriculture is characteristic of economic development and coincides with the transition from an agricultural to an industrial economy and from rural to urban life. This transition has never been easy, but it seems to have become even more difficult as innovation in industry has also reduced the demand for labor. Industry s capacity to absorb labor is far lower than it was one hundred or even fifty years ago. China, for example, still has a very large rural labor surplus despite rapid industrialization over the past three decades. Informal economy Many developing countries have a very significant informal economy within the overall economy. The informal economy 464 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK

6 is something of a blind spot for government policies, including innovation policy. Even the most comprehensive concept of NISs has yet to fully address innovation that takes place in the informal sector yet disregarding the role of the informal sector can produce misleading, asymmetrical, and ineffective innovation strategies (Kraemer-Mbula and Wamae 2010). LESSONS LEARNED AND RECOMMENDATIONS FOR PRACTITIONERS A dynamic NIS does not emerge overnight. Such a system is built and continuously improved only through a sustained, long-term commitment by government and the private sector. A national innovation policy should guide this process. In most countries, particularly in the difficult institutional context of developing countries, implementing an innovation policy can be challenging. A long-term strategy to develop a national innovation policy should be inspired by a philosophy of radical gradualism, which suggests a sequence of finely tuned, small, specific reforms and successful outcomes that paves the way for broader institutional changes (World Bank 2010). One of the first issues to tackle is the fact that in most developing countries the capacity to formulate and implement an innovation policy is usually scarce and must be built over a considerable period. An example of the radical gradualism approach is Argentina s Unleashing Productive Innovation Project, which comprises a wide range of interventions to eliminate critical bottlenecks within Argentina s innovation system (box 6.6). Box 6.6 Unleashing Argentina s Productive Innovation The Unleashing Productive Innovation Project is a major World Bank effort (its total budget is US$223 million for five years, of which US$150 million is loan money) to assist Argentina to become more innovative, promote diversification into more knowledge-intensive economic activities, and stimulate economic growth. The project, which strongly reflects a national innovation system approach, consists of the five components: Developing human capital for productive innovation (US$28 million). This component fills critical human capital gaps in the national innovation system by developing training programs for technology brokers and technology managers to professionalize and improve innovation processes. It also offers scholarships to pursue studies in information and communication technology (ICT) and reduces Argentina s shortages of qualified personnel. Support for new knowledge-based companies (US$ 54 million). This component promotes the development of new knowledge-based companies through two complementary activities. The first is a pilot of an early-stage venture capital fund. The second is the creation of a proactive, market-driven incubation cycle from the initial idea to a commercial project, through early-stage venture capital investment by establishing deal flow promoters that are mainly remunerated on a fee-for-success basis. Fostering sector-specific capacity for productive innovation (US$85 million). This component will develop critical capacities in three priority areas: biotechnology, nanotechnology, and ICT. Resources will be allocated through competitive funding schemes designed to foster public-private and private-private collaboration. The private business community will play a lead role in these funds, both in specifying the research agenda and funding it. Upgrading research infrastructure (US$36 million). Funds will be allocated on a competitive basis using predefined selection criteria, such as the extent to which the beneficiary is connected with the productive sector. Strengthening the policy and institutional framework for innovation (US$20 million). This component will strengthen the policy-making capacity of the Ministry of Science and Technology, strengthen the capacity of the National Agency for the Promotion of Science and Technology in selected areas, and support dissemination of project activities. Although the project does not target the agricultural sector specifically, the sector can benefit from it in various ways, especially through the biotechnology fund included in component 3. Indirect spillins from the other components are likely as well. Source: World Bank (a) See module 5, TNs 3 and 6, for discussions of how incubators and risk capital are used to support agricultural innovation. MODULE 6: THEMATIC NOTE 1: NATIONAL INNOVATION POLICY 465

7 Pay attention to scale and scope Innovation systems can be considered at different scales, from a national scale to smaller geographic or political units (states, regions, provinces), and with different scopes, from economy-wide to sector- or commodity-specific innovation systems. From the point of view of policies for improving the enabling environment for innovation, the issue of scale and scope is relevant. Policy objectives must be explicit with respect to the scale and scope of the system they intend to influence. At the same time, a balance needs to be struck between centralized and decentralized political decisionmaking in terms of scale and scope. A national innovation policy should provide the basic architecture for who is responsible for what. Another challenging issue is where to situate responsibility for innovation policy within the government structure. Many countries have delegated this responsibility to the ministry of science and technology, while others have opted to establish a higher-level entity that brings the various relevant ministries together to coordinate innovation policy (see the Chilean example in box 6.3 and TN 2 on innovation system governance). As noted in the module overview, the latter option seems to be preferred. 2 A criticism of national innovation policies is that they tend to ignore opportunities for supra-national collaboration in the innovation sphere. They are often too inward looking and ignore opportunities for regional or international collaboration. Regional economic communities are becoming more active on innovation policy issues, however. They often press hard for product and technology standardization within their communities to create the optimal conditions for a single market. The EU is by far the most advanced regional community in terms of having a regional innovation policy in place (known as the Lisbon Strategy). In addition, various industry-specific or technology-specific innovation platforms in Europe enable European industries to work together on new technologies. Mobilize a broad spectrum of actors in making innovation policy An important factor in successfully setting and implementing an innovation policy agenda is the ability to mobilize a broad spectrum of innovation actors. Successful mobilization of these actors depends on factors such as persuasive arguments and incentives, as well as the autonomy of the actors in the institutional landscape, the nature of existing linkages (social capital), and the effectiveness of leadership. The policy agenda for STI is sometimes dominated by narrow scientific elites with considerable influence, particularly in countries with a less mature innovation system (OECD 2010). One way of getting a better overview of the innovation landscape is to conduct a functional analysis of the actors that make up the landscape (box 6.7). Evaluate and measure innovation performance Continuous monitoring and evaluation of a country s innovation performance should be an important component of any national innovation policy. Do the various policy instruments and interventions yield the expected results? Benchmarking is a much-used tool at the international level to identify best innovation policy practices, while composite innovation indicators help to monitor innovation performance across countries and through time (box 6.8). Foster interaction between the national innovation policy and the agricultural innovation policy The introduction of a national innovation policy often has an important impact on the public agricultural Box 6.7 A Functional Analysis of a National or Sectoral Innovation System A functional analysis is useful to rapidly assess a national or sectoral innovation system. a It can help to identify the principal actors within an innovation system and the linkages and interactions between them. Weaknesses identified in such an analysis can form a good starting point for formulating specific innovation policy interventions. The standard steps in a functional analysis of an innovation system are: 1. Define the boundaries of the innovation system in focus. The level of aggregation in a functional appraisal can vary substantially. For example, one (Box continues on the following page) 466 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK

8 Box 6.7 A Functional Analysis of a National or Sectoral Innovation System (continued) can deal with the business sector as one entity or differentiate it by sector, size, innovation profile, or some other feature. This process will enrich insights into how the innovation system functions and hence help to fine-tune policy interventions. 2. Identify and engage the principal actors in each of the stakeholder groups within the innovation system, including (1) the business sector, (2) the government sector (including the principal policy-making, coordinating, financing, and regulatory agencies for science, technology, and innovation), (3) the research sector (research organizations, universities, and others), (4) technology transfer and other intermediary orga - nizations, (5) orga nized civil society (nongovernmental organizations, consumer groups, trade unions, and the like), and (6) possible foreign innovation partners; 3. Define the primary functions that the innovation system needs to perform. The Actions Needed section proposes five key functions that an innovation system needs to perform. These functions are not set in stone but can be reformulated to match the specific context to which they apply. 4. Bring steps two and three together and map in a matrix format how the different stakeholder groups and their specific actors contribute to the different key functions. This exercise should help identify possible missing actors or weak links between actors or stakeholder groups. Such mapping is best done on the basis of interviews with the various actors involved in the innovation system. An alternative is to make the map based on brainstorming sessions with key experts. Source: Author. a. See Paterson, Adam, and Mullen (2003) and Ivanova and Roseboom (2006) for practical examples of applying a functional analysis approach to national innovation systems. Box 6.8 Benchmarking National Innovation Systems and Policies Since the mid-1990s, the Organisation for Economic Cooperation and Development (OECD) has conducted an array of studies on national innovation systems and policies, covering its member and nonmember countries (including leading developing countries such as Brazil, Chile, China, and South Africa). a The OECD methodology, based on the Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data (issued in 1992 and updated in 1997 and 2005), has been copied frequently by other innovation system studies. The latest edition of the Oslo Manual includes specific guidelines for the implementation of innovation surveys in developing countries, based largely on experience with the methodology in Latin America. In 2000, the European Union adopted its Lisbon Strategy, which aims to make Europe the most competitive and the most dynamic knowledge-based economy in the world. As part of this strategy, the European Union publishes an annual European Innovation Scoreboard (EIS) to monitor the innovation performance of individual member nations as well as the performance of the European Union in relation to other economies such as the United States, Japan, China, and Brazil. The EIS methodology comprises seven innovation dimensions, grouped into three blocks: Enablers: Captures the main innovation drivers that are external to the firm and comprises two dimensions: (1) human resources (measures the availability of highly skilled and educated people) and (2) financial resources (measures the availability of finance for innovation projects and the support of governments for innovation activities). Firm activities: Captures innovation efforts that firms undertake and comprises three dimensions: (1) investment in innovation by firms (multiple (Box continues on the following page) MODULE 6: THEMATIC NOTE 1: NATIONAL INNOVATION POLICY 467

9 Box 6.8 Benchmarking National Innovation Systems and Policies (continued) variables); (2) linkages and entrepreneurship (captures entrepreneurial efforts and collaboration among innovating firms and also with the public sector); and (3) throughputs (IPR registration and balance of payments regarding technology royalties). Outputs: Captures the outputs of firm activities and comprises two dimensions: (1) innovators (measures the number of firms that have introduced innovations onto the market or within their organizations) and (2) economic effects (captures the economic success of innovation in employment, exports, and sales arising from innovation activities). In addition to EIS, several other international innovation indices are produced, including the World Bank Knowledge Economy Index, the UNCTAD Innovation Capability Index, UNDP Technology Achievement Index, the RAND Science and Technology Capacity Index, the WEF Global Competitiveness Index, the INSEAD Global Innovation Index. b The indices use different approaches, but rankings are reasonably stable across indices. Incomplete and poor data cause the rankings of countries at the bottom to be considerably less stable, however. One criticism of current measurement frameworks is that they often fail to measure the social impacts of innovation (on well-being and poverty reduction, for example). Source: Pro Inno Europe 2010; World Bank 2010; OECD (a) The OECD Reviews of Innovation Policy comprehensively assesses innovation systems in individual OECD members and nonmembers, focusing on the role of government. The reviews provide recommendations to improve policies affecting innovation performance, including R&D policies. Each review identifies good practices from which other countries can learn ( (b) UNCTAD = United Nations Conference on Trade and Development; UNDP = United Nations Development Programme; WEF = World Economic Forum; and INSEAD = originally Institut Européen d Administration des Affaires (European Institute of Business Administration). research and extension services established decades earlier. These agencies are required to interact more vigorously with STI agencies that have a far wider scope and compete with nonagricultural agencies for resources from STI funding schemes. National innovation policies also tend to introduce new instruments to promote innovation that are not designed specifically for agribusiness but which agribusiness can use. Business incubators, risk capital, technology consortia, technology parks, technology subsidies, and private R&D incentives (subsidies or tax deductions) are examples (many of which are discussed in module 5). 468 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK