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1. DIGITAL INNOVATION:
SEIZING POLICY
OPPORTUNITIES
Chapter 1
Please cite this publication as:
OECD (2019), Digital Innovation: Seizing Policy Opportunities, OECD Publishing, Paris.
https://doi.org/10.1787/a298dc87-en
Dominique Guellec
Caroline Paunov
Sandra Planes-Satorra

2. Questions addressed:
• How are digital technologies changing innovation
processes and outcomes?
• What are the effects of these changes on market dynamics?
Chapter 1. Characterising innovation in
the digital age
Chapter 1

3. Digital technologies are changing the nature
& characteristics of innovation
Chapter 1

4. Four trends characterise innovation in the
digital age
Chapter 1

5. Opportunities for research & innovation:
Changing research processes, e.g.:
 Large scale computerised experiments
New services & business models, e.g.:
 smart farming
 on-demand mobility services
Enhanced customisation, e.g.:
 personalise retail & advertisement
 precision medicine
Processes optimisation, e.g.:
 predictive maintenance
 stock management systems
 supply chain management
(1) Data as a core input for innovation
Chapter 1

6. “Servititisation of manufacturing”
 Smart agriculture services
offered by machinery producers
 Car makers provide after-sales &
car-sharing services
Services innovations build on
digital technologies
 Retail innovation based on data
analytics, augmented reality & IoT
(2) Digital technologies enable service innovation
Chapter 1

7.  Accelerated design, prototyping & testing with 3D-
printing & virtual simulation
 Release of pilot versions to the market
 Regular upgrading (based on consumer’s feedback)
 Flexible manufacturing enabling small series production
at low cost (allowing more personalisation)
(3) Innovation cycles are faster
Chapter 1

8. (4) Innovation is more collaborative
Collaboration takes different forms:
 Data sharing
 Business incubation & acceleration
programmes
 Partnerships (e.g. with tech firms,
start-ups, public research)
 Corporate venture capital &
acquisitions (e.g. of tech start-ups)
 Platforms & other innovation
ecosystems (e.g. crowdsourcing;
industry platforms)
Chapter 1

9. Fluidity of data & digital platforms have opposing effects on
market dynamics:
Digital innovation is changing market
structures & dynamics
Market concentration
• Expanding digital production at little
cost (scale without mass) favours
dominant players
• Scarcity of skills to exploit data leads
to concentration in few hotspots
Market entry & competition
• Data access lowers cost of
market entry
• Platforms can facilitate
entrepreneurship

10. Conclusions
• Digital technologies
change innovation because
they radically reduce the
costs of producing and
disseminating knowledge
• The core changes are: data
becomes a key input, services
is at the heart of innovation,
innovation cycles are faster
and collaboration becomes
more important
• Market dynamics also
change with market
concentration and
competition dynamics

11. Project website:
https://oe.cd/2xw
The report and all project materials
Please cite this publication as:
OECD (2019), Digital Innovation:
Seizing Policy Opportunities, OECD
Publishing, Paris.
https://doi.org/10.1787/a298dc87-en

12. Structure of the report
Characterising innovation in the digital age
The impacts of the digital transformation on innovation
across sectors
How should innovation policies be adapted to the
digital age?
Policies to foster digital innovation’s diffusion and
collaboration
Key findings & recommendations
1
2
3
4
Chapters:

13. Project events
Netherlands
April 2018
Website
Summary
London
September 2017
Website
Summary
Paris
June 2017
Website
Summary
Paris
June 2018
Website
Summary
4 workshops Report launch event
London
April 2019
https://oe.cd/2xs

14. Policy papers
Guellec, D. and C. Paunov (2018), "Innovation
policies in the digital age", OECD Science,
Technology and Industry Policy Papers, No. 59, OECD
Publishing, Paris, https://doi.org/10.1787/eadd1094-en.
Paunov, C. and S. Planes-Satorra (2019), "The impacts
of digital transformation on innovation across
sectors", OECD Science, Technology and Industry
Policy Papers, OECD Publishing, Paris (forthcoming)
Planes-Satorra, S. and C. Paunov (2019), "The digital
innovation landscape in 2019", OECD Science,
Technology and Industry Policy Papers, OECD
Publishing, Paris (forthcoming)

15. Case studies
Find all country case study contributions at: https://oe.cd/2xP

16. Contact
Dominique Guellec, Dominique.Guellec@oecd.org
Caroline Paunov, Caroline.Paunov@oecd.org
Sandra Planes-Satorra, Sandra.PlanesSatorra@oecd.org