INNOVATION AND NATIONAL ECONOMIC STRATEGY

In the formulation of a national economic policy today the need to compete in a global knowledge economy has been recognized. The importance of the knowledge services sector now rivals that of materials and products and their associated processing, manufacturing and distribution sub-sectors. A policy component common to both knowledge services and businesses handling tangible assets is a country’s investment and support for innovation as part of a national science and technology (S &T) strategy. Innovation can play a major role in creating new business opportunities, in retaining and perhaps expanding current business dominance, and in transitioning a country’s assets to address changing global market needs. Policy components that can be included in an investment model of innovation include direct funding, tax incentives, purchasing, infrastructure investment and trade restrictions. The process flow of innovation consists of steps which research and development efforts take in yielding results such as inventions and discoveries that eventually lead to national competitiveness. A sound investment model will also have feedback loops which contain proposed metrics by which the policy components can be measured in terms of their effectiveness. The metrics include per capit