Innovation policy, trade and the digital challenge

This section focuses on innovation policy and discusses its economic rationales and impact on innovation. For innovation to take place, new knowledge has to be created through investment in research and it then diffuses through the education system or publications, patents and interchange of ideas. When firms or governments instigate technological progress by using this knowledge, or its embodiments via inventions, to change processes, behaviours or technologies, economic growth may be affected, depending on a number of variables. Within any country, the diffusion of new technology depends on institutions, the level of economic openness and investment in education and research.