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The great 20th century sinologist, Joseph Needham, once drew up a list of 24 technical innovations brought from China to the West. They ranged from gunpowder and the wheelbarrow to printing, cast iron, the magnetic compass and the chain suspension bridge. By 1600 the torch of innovation had passed to the West.

Finland took the number one spot in the OECD’s PISA 2006 survey, a comprehensive and much-quoted international yardstick of secondary school student performance.

This is an era in which science is needed, arguably more than ever. In the environment, energy and innovation generally, smart investors rely on smart thinkers. The public needs trusty scientists, to pursue knowledge and to arbitrate in debates about the likes of climate change, nuclear energy or nanotechnology.

Innovation has played a modest role in explaining growth in both China and India in recent years, but both countries have work to do to sustain their promising growth paths. Moreover, there are important differences between the respective challenges that each country faces.

A statue of Korea's legendary General Lee Soon Shin stands guard outside the Ministry of Information and Communications in central Seoul. A poster announcing a major international joint Korean/OECD ministerial conference on the Future of the Internet Economy to be held on 17-18 June hangs at the front of the building.

“Education over the Internet is going to be so big it is going to make e-mail usage look like a rounding error.” So remarked Cisco’s chief, John Chambers, in an article in The New York Times in 1999. But even the boss of a company that produces technology for the Internet might not have guessed just how large e-education would become.

Can you remember life before the Internet? Though quite a new technology, already a world without the web has become as unthinkable for many of us as a world without telephones. But what of the future? Can the benefits of this extraordinary technology be multiplied, and how can the thornier challenges be met?

The OECD is a world leader in statistics, but keeping up that lead demands innovation. The statistics services of the OECD already provide smart databases online at www.oecd.org/statistics, while graphs and tables in many of our publications are backed up with our new StatLink service, a link allowing access to source Excel files at a click. Now the OECD has gone another step by opening its data out to websites that specialise in lively use and presentation of the statistics, and reader interaction.

Was the dot.com boom a fortuitous circumstance, or the fruit of brilliant minds? Was it the hardware or the software that spurred the IT revolution? And to what extent did government efforts to free up markets and provide enabling business and innovation environments play a role?

The history of human progress is also a history of innovation, and OECD countries have been rediscovering what this means for the global economy. Consider the US. For two decades the world’s largest and most advanced economy has been driving forward the frontiers of technical progress. Yet whether in information technology, pharmaceuticals or biotechnology, the US knows it must innovate to stay in front.

The Antarctic ozone hole, as measured by NOAA’s Solar Backscatter Ultraviolet (SBUV) instrument, during October 2006.

When Russia launched the first-ever satellite into space 50 years ago on 4 October 1957, it was an event that won worldwide admiration. There was some trepidation too. With the Second World War barely over a decade earlier and the Cold War in deep freeze, West Europeans were understandably a little nervous at the thought of Soviet “Sputnik” satellites floating over their territories.

China is becoming one of the world’s fastest growing players on the global information and communications technology market.

Satellites are not just about communications or defence, but can help us understand if not resolve some difficult environmental challenges, including climate change. They are investments in innovation whose benefits for humanity should speak for themselves.

OECD Observer No 263, October 2007

Even the sharpest leading edge companies can no longer survive on their own R&D efforts, but must open up their networks and collaborate with others: this was the main message from an expert meeting held at the OECD on 27 April called “Globalisation and Open Innovation”.

Foreign class

Are you a left-brain or a right-brain person? Do you learn while you sleep? Do men and boys have different brains than women and girls? Popular misconceptions such as these pepper ads, magazine covers and conversations. What is fiction and what is fact, and where did they originate? Understanding the Brain: The Birth of a Learning Science, the second and final report from a project launched by the OECD in 1999, challenges these neuromyths, and explores how brain science can be applied to learning science and the classroom.

A collection of about 100 of the most relevant internationally agreed chemical testing methods used by government, industry and independent laboratories are now available free online.

The Icelandic Health Sector Database was started in 1998 to develop improved methods of achieving better health, and prediction, diagnosis and treatment of disease. Worthwhile goals, yet it was stalled by controversy over the issue of consent. The CARTaGENE project, a proposed 50-year genetic profile of the Quebec population, got started in 1999, and is still awaiting ethics and privacy approval from the government.

It is a century since Marie Curie won two Nobel prizes, one for physics and the other for chemistry. How can more women be encouraged to work in science? A timely question in view of International Women's Day on 8 March.

Letter to the editor: One way OECD countries and others benefit from globalisation is by helping their businesses stay profitable through cost-effective outsourcing, mainly to China and India, and including some knowledge-based activities. In time, these will account for most outsourced work, but as emerging exporters cater to their own domestic markets, the playing field will level out somewhat. Innovation will be important for everyone to stay ahead.

Almost every household in China has a mobile phone. In fact, China is now the world’s largest mobile phone market, both in demand and supply: 303 million mobile phones were produced in China in 2005, exceeding production levels in most OECD countries. However, as this year’s OECD Information Technology Outlook points out, mobile phones are not the only sector of information and communication technology (IT, also known as ICT) where China is making inroads.

Despite the dot.com crash of 2001, growth in broadband has been strong. Indeed, the number of broadband Internet connections in OECD countries has risen from an average of 2.9 subscribers per 100 inhabitants in 2001 to 13.6 per 100 in December 2005.

The OECD has launched a Global Forum on Space Economics to help researchers better analyse the opportunities and challenges facing the space sector and its technology applications. Space affects people’s daily lives more than ever before and is a growing international policy concern. From exploration to communications technology and intelligence, the world increasingly relies on space. There are problems to consider too, such as satellite interference and safety. Yet, the reality of budget constraints make co-operation essential.

Though the dot.com crash of 2001 burst the e-commerce bubble, recent figures show that broadband has remained dynamic. Indeed, growth in the number of broadband Internet connections in OECD countries has risen from an average of 2.9 in 2001 to 13.6 subscribers per 100 inhabitants in December 2005.

All digital highways led to Rome last January, as hundreds of government officials, policy experts and companies descended on the Italian capital for a conference on the future of the digital economy. Jointly hosted by the OECD and the Italian government, the meeting marked a turning point in the digital content debate as several long-simmering concerns emerged as mainstream issues.

Biotechnology and genetics research have been the subject of extensive investment by both the public and private sectors, with a growing impact on healthcare. Advances in medical genetics promise faster, better, diagnosis as well as a new generation of targeted therapies.

The impact of science on society, though a much-discussed question, received special attention in 2005, which to mark the hundredth anniversary of Einstein’s discovery of the Theory of Relativity, has been designated the International Year of Physics.

Anyone driving across different countries will be struck by the different qualities of national road networks. Yet, even the smoothest asphalt requires frequent maintenance, often at great cost in terms of money, traffic disruptions and so on.

Beyond the haves and have-nots of mobile handsets, PCs or hand-held IT devices, there is a deeper, and perhaps more debilitating, layer to the digital divide. And that is the availability (or lack) of basic network infrastructure in low-income economies.

With oil prices historically high and worries about global warming, greater attention is being paid to renewable energy potential. Take solar energy, for instance, which is already used for water heating and cooling systems.

Astronomers have made enormous progress in the past few decades, developing a convincing model of the origin, evolution and distribution of the visible matter in the Universe, from asteroids and planets to the large-scale structure of clusters of galaxies. But the model fails to explain the composition of some 96% of the contents of the Universe (the enigmatic “dark matter” and “dark energy”) and does not explain the origin or distribution of life.

How much do our knowledge-based societies actually invest in knowledge? One way to find out, according to OECD Science, Technology and Industry Scoreboard published in May, is to work out the sum of three spending areas: R&D, higher education (public and private) and software. The figures are reworked where possible to avoid overlap between, say, education and R&D.

Nanotechnology R&D continues to grow in priority on national science agendas in OECD countries, both in terms of public and private funding. The United States, Europe and Japan each spend between US$500 million and $1 billion a year on nanotechnology R&D.

Biotech is set for a great future in healthcare. Here is why.The history of business enterprise is filled with heroes and villains. In the 20th century, we had our pick of industries to hate, including cigarette purveyors, alcohol producers, automobile manufacturers, and so on, that could be accused of damaging our health, polluting our air, endangering our children or, in general, putting their profits above society’s well-being.

Governments must step up their fight against spam or risk seeing consumer and business confidence in the Internet buried under a mountain of junk e-mail, the OECD has warned.

Ever since the launching of Sputnik in 1957, public attention has always focused on spectacular space missions such as the landing of Apollo on the Moon in 1969 or, more recently, the stunning pictures transmitted from Mars by Spirit. At the same time, space programmes have faced their setbacks, from tragedies like Columbia to extravagant cost overruns, leading to deep cuts in public support to space ventures.

"We do not know where this journey will end, yet we know this: human beings are headed into the cosmos." With these words, the US president, George W. Bush, launched in January his ambitious vision for a new US programme for human space exploration. A new manned spaceship for a trip to the moon by 2015, not just to visit but to spend time there, would open the way for manned missions “to worlds beyond”, including to Mars.

Biotechnology is one of the fastest-growing areas of scientific research, the latest OECD Science, Technology and Industry Scoreboard shows.

Thanks to advances using information technology, we now know far more about our bodies, how they function, and how they are built. But there are challenges, not least in safeguarding personal data.

I do not share your pessimistic view of space tourism (“Unhappy Holidays” in OECD Observer No. 237, May 2003). In fact, space tourism is already happening and will slowly but steadily grow into the largest off-world business.

Just as demand for scientists worldwide is booming, many countries are warning of a looming shortage. Are they right?

When business gurus and industry captains gathered for Telecom World 2003 at the International Telecom Union in Geneva this October, they all agreed that telecoms continued to grow, but not as much or in a manner they expected.

Could the information age spell the death of information? This is a genuine risk that proper action to store websites and other electronic information can avoid. Now the British have enacted legislation so that electronic publications would be saved for future generations.

Road safety technology has come a long way since the first illuminated traffic signal was installed in London in 1868 – whose gas lamps unfortunately blew up shortly after inauguration, killing a policeman. Today intelligent transportation systems are being developed to save lives, with such technology as speed control, collision avoidance and vision enhancement.

Switzerland is hosting the first phase of the World Summit on the Information Society (WSIS) in Geneva from 10–12 December 2003 and is committed to making this summit work. But what is it all about? Will it be yet another summit with political statements and resolutions of limited relevance or will it really make a difference?

Information technologies offer great potential for the world economy and society. But several challenges and risks must be overcome on the way.

Making information systems trustworthy is a job that concerns everyone. What can be done? A cultural change is needed in the society’s perception of information technology security.

Broadband access is already widely available in the OECD area, yet not everyone is biting. Why?

Everyone has read about the benefits of broadband technology and if you have just opened this article online with a slow speed modem, perhaps you will want to read more. For the transition from traditional phone-internet communications to broadband is rather like the shift from propeller planes to the jumbo jet.

What about the environmental impact of computers? As this French components recycling plant suggests, this may not be negligible. There are direct effects associated with the production and use of IT equipment, as well as with millions of computers, together with their metals and other hazardous substances, being disposed of every day.

Education may be a competitive business these days, though not just for course work, degrees and diplomas. Rather, universities are discovering that innovations from their science departments can have market value.

Nanotechnology – the science of the small – is becoming a big priority in the policy agendas of many countries. Nanotechnology refers to a range of new technologies that aim to manipulate individual atoms and molecules in order to create new products and processes: computers that fit on the head of a pin or structures that are built from the bottom up, atom by atom.

Big Science is global. Research and development in medicine, technology, engineering, chemistry, biology and physics have long since overrun national borders, in part because no single government has the time, money or indeed skills that such work demands. Projects, from the International Space Station to building particle colliders and light sources, or semi-conductor research: all thrive on global co-operation.

Creating Markets for Energy Technologies

Despite the headlines, electronic commerce is far from finished. It is just starting. It remains central to the OECD’s vision of a networked world and the potential it holds for economic growth, job creation, increased world trade and improved social conditions. And improving trust is central to developing e-commerce. Consumers and businesses need to know that their use of network services is secure and reliable, whether a company is tendering for an overseas contract by e-mail or an individual is ordering an organic free-range turkey for Sunday lunch.

The next 40 years are likely to see more people use information technology, at least if recent trends are anything to judge by. Then again, are OECD countries really embracing the information and knowledge economy, and if so how fast? Just what are businesses and individuals using the Internet for and how much are they paying for the privilege? And do enough people have the skills they need to compete in the new technology world? These are just some of the all important questions that the IT explosion of recent years has raised, not to mention the dot.com crash that followed.

In a recent review* of employment in China, the headline read “Take Our Workers, Please”. It aptly described efforts by Chinese officials to provide jobs for a hard-hit rural province. But the government is also using the global dotcom slowdown to draw back some of the 400,000 to 500,000 Chinese who studied, worked and stayed abroad in the last 25 years.

Space is very much a reality in our lives, even if we are not always aware of it. And it is likely to grow in importance in the future, with far-reaching national and international implications, not least because of the dual nature (military and civilian) of most space technologies.

New scientific research centres are a fairly common event these days, but in January 2003 a facility with a difference will see the light of day in Amman, Jordan. The international backers of the new research centre, called SESAME, are determined that scientific collaboration will help open the door to greater co-operation in the Middle East.

Mixing competition and the environment might raise some eyebrows, but they may help each other. Take the UK’s energy market reform. According the OECD’s latest environment review of the UK, the resulting “dash for gas” in power generation should enable the UK to meet its 12.5% greenhouse gas (GHG) reduction target under the Kyoto Protocol. The switch from coal to gas fuel in thermal power production, driven largely by the liberalisation of the UK electricity market, led to a 20% reduction in CO2 gas emissions in the UK over the period 1990 to 1999.

Remember the new economy? With the economic slowdown, the dot.com crash and the events of 11 September many people have decided to try to forget. Yet, while the exuberance may be over and a new realism is the order of the day, the OECD is looking to a resurgent new economy to drive the next phase of growth. But, given the experience of the past two years, can we be confident that the new economy will not be a more unstable and dangerous place than the old?

No, life cannot be patented. But an invention which includes genetic material as an isolated, purified molecule outside the human body can. That means genes. More than 3 000 patents on genetic inventions have been granted since 1980 by the United States Patent and Trademark Office, with the European and Japanese patent offices not far behind.

At the height of the dot.com boom, brash Digital Age gurus declared with great fervour that “the Internet changes everything”. Though their voices are quieter now, the revolutionary potential of information technology breakthroughs remains significant. The environment is one key area where the application of computer power and related innovations holds considerable unexplored promise.

How can we be sure that actions to curb environmental damage are effective? Establishing reliable ways to measure the results is crucial to meeting this challenge.

The emerging digital divide is, unfortunately, a new symptom of some of our oldest global problems – the persistent divides between illiteracy and knowledge, sickness and health, and poverty and wealth. While technology will not solve these basic problems, it can offer powerful digital dividends that enhance sustainable development.

GM food: science, safety and society

What do worms, fruit flies and people have in common? In fact, humans have a great deal in common genetically with other organisms, even "primitive" ones. Apart from that, they share the distinction of being among the first DNA blueprints to have been mapped and published.

Imaginative fraudsters have been quick to use the web to turn a dishonest penny. In one case investigated by the US Federal Trade Commission (FTC), consumers were duped into making costly international telephone calls in a bid to ward off bills for goods they had not actually ordered. The scammers sent thousands of consumers an e-mail message thanking them for their order for goods priced at between $250 and $899 dollars, and informing them that their credit cards would be billed accordingly. The recipients were further perplexed when they found that the return address on the e-mail did not work. So they rushed to telephone the customer complaint number given in the e-mail.

The Internet is wonderfully versatile, which is why everyone is turning to it for information and trade. The trouble is, so are criminals. All sorts of crimes are committed using the net, from straightforward hacking to industrial espionage, sabotage, fraud, infringement of copyright, illegal gambling and trade in narcotics, medicines and armaments. The web is also used to peddle child pornography. And it is a vehicle for the dissemination of hate literature.

Was the World Wide Web an invention of the US military, or did it come out of Microsoft? The answer, perhaps surprisingly, is more scientific than that, although both defence and business had their parts to play.

Technological development may have greatly enhanced the security of the information system as a whole. But it has also given potential attackers the chance of far faster penetration into data systems (whether personal, corporate or government) and with wider and deeper effects. What’s more, new technology allows attackers to leave few traces behind, all of which makes the criminal investigators’ task difficult. Meanwhile, the international network enables almost anyone to get hold of the tools they need to attack systems.

The mention of services in polite conversation among economists is sometimes met with a glazed look of indifference. The mainstream view is that services are not very dynamic, that they mainly create poorly paid jobs, that they have little or no productivity growth and that they do not innovate. Banking, retailing, business services: these are not exactly the industries everyone is talking about, unlike software manufacturing or genetic technology. Yet, a closer look shows a different picture.

Over several months I have participated in many discussions with experts from all over the world on the issue of the new economy. The question usually raised: is there a new economy? The consensus answer seems to be “perhaps”. There may be an element of media hype about it all, but there is also substance behind the headlines. As OECD chief economist, Ignazio Visco, points out in this special edition of the OECD Observer, trends are finally emerging in the economic data that the new economy might help to explain, especially in the area of productivity.

Road maintenance is a huge public cost in most industrial countries. In fact, it can represent as much as three quarters of the total road infrastructure budget in some of them. One of the challenges for governments is how to improve efficiency in the administration of road expenditures to keep those costs under control, while achieving greater efficiency in road transport.

Genetics is playing an increasingly important role in health care. New technical advances and information deriving from human genome research are changing health care practices and the economics of healthcare provision. These advances have broad social implications, particularly with the prospect in the future of a significant increase in the choice of genetic tests on the market.

Trust is key to the growth of e-commerce, but as with most areas of business, trust comes with time. People in OECD countries are slowly getting used to the concept of doing business electronically, whether it be to shop on the Internet or to take care of their own banking. Even in France, where buying airline tickets and making theatre reservations online has been fairly widespread for several years, thanks to the relatively secure, but technically limited Minitel, the use of the Internet for e-business has finally begun to pick up. One important reason for this change is the growth of secure servers.

So what is ‘biotechnology’? A quick look at the word suggests a technology that is based upon bio-logy, the study of living things, and this is reflected in the definition which first appeared in the 1982 OECD publication Biotechnology: - International Trends and Perspectives and which is still accepted today: ‘the application of scientific and engineering principles to the processing of materials by biological agents to provide goods and services’.

The outlook for the supply of neutrons is not encouraging. Why is this important, you might ask? Scientists and engineers use beams of neutrons (elementary particles that, together with protons, are the constituents of all atomic nuclei) to study the properties of materials such as semiconductors, superconductors, and biological specimens. In other words, they are essential tools for basic and applied research.

In late 1995 the managers of the Hubble Space Telescope took a bold step. Normally, astronomers from around the world compete vigorously for the right to use this multi-billion dollar instrument for a few precious minutes. But this time, for ten whole days, the telescope was pointed at nothing -- the emptiest possible part of the sky. To the delight of the Hubble team, the resulting picture was very far from blank. Some three thousand objects could be seen, each one a galaxy containing hundreds of billions of stars.

It is not surprising that in such a novel technology field, several ‘pioneer’ inventions have been presented in the recent years. Patent offices have tended to provide these novel inventions broad protection. These patents cover protection of future, as yet unknown, uses, even though the patent was issued on the basis of the first therapeutic breakthrough.

The intellectual capital invested in biotechnology raises important questions about protection. Some of them hold risks.

When it comes to assessing regulation and safety with regard to particular goods, cost-benefit analysis does not receive the emphasis it should, particularly when compared with the importance of pure risk analysis. The Uruguay Round agreements (see p. 28) give economic assessment only a limited role in the settlement of sanitary and technical disputes.

Most whole food has never been the object of specific regulation, but that is changing with the emergence of genetically modified produce. So what should be the trigger for regulating such products? And what practical tools can we use to ensure the safety of novel foods?

There are many definitions of biotechnology and most of them have been argued about, agreed on, decon-structed, reconstructed and indeed manipulated over the years. Here are a few from the 1980s which, like the one the OECD offers at the start of this Spotlight appear to have withstood the tamperings of time.

Biotechnology is a fairly broad term and it is difficult to talk of it as a specific sector or industry. Still, Ernst & Young make a pretty good stab at measuring it. In their biotechnology report (European Life Sciences, 1998) they sometimes call it the entrepreneurial life sciences sector and in their analysis include those companies which use modern biotechnological techniques to develop pro-ducts or services for health care, animal health, agriculture, food pro-cessing, renewable resources and the environment.

Since 1980 the OECD has been a leading player in addressing biotechnology--related issues. During that time, modern biotechnology has evolved from a scientific curiosity towards commercial applications, and has reached the in-trays of more and more policy advisers, in different ministries or government agencies – science, industry, agriculture, health, environment, education, development, trade, patent office and others. It became impossible for any one agency to pretend to a monopoly on it.

Consumers want their governments to pay closer attention to food safety and quality. That may mean more regulation, which if ill-defined or excessive can damage trade and well-being. Weighing up the costs and benefits of particular regulations, rather than just assessing risk, could help improve safety, while avoiding -protectionism.

To many, biotechnology is all about genetically modified foods and cloning. Yet, it is also proving its value to the industrial production process, offering clear environmental and economic advantages over conventional methods.