Public policy can play an important role in orienting innovation efforts so that they help address domestic and global challenges. Government R&D budgets (GBAORD) provide an indication of the relative importance of various socio-economic objectives, such as defence, health and the environment, in public R&D spending. In 2009, governments across the OECD invested the equivalent of nearly 0.75% of GDP in direct funding of R&D activities. R&D budgets as a percentage of GDP are largest in the the United States, followed by Finland, Iceland, Portugal and Korea, ranging from nearly 0.2% to 1.2%. In most countries, this indicator is up relative to pre-recession levels, reflecting both the use of stimulus packages to support R&D and the drop in GDP growth rates.

OECD countries are faced with the health-care challenges of ageing populations and others, such as increasingly drug-resistant diseases and the risk of global pandemics. Innovation is a critical means of improving the capacity of health systems to address these problems while containing escalating costs. The public sector plays a significant role alongside business and non-profit organisations, by supporting R&D directly but also through the procurement of new treatments resulting from R&D. Government budget appropriations or outlays for R&D (GBAORD) indicate that direct government support of health-related R&D in OECD countries was about 0.1% of their combined GDP in 2008. The United States is by far the largest funder in both absolute and relative terms, at just over 0.3% of GDP spent on health R&D.

Finding cleaner, affordable and reliable energy sources and promoting sustainable growth have become major preoccupations of countries around the world. To this end, governments support research, foster innovation and the use of new technologies in production, and encourage the creation of markets for and consumers’ uptake of “green” technologies.

Innovation can be a source of environmental benefits for the firm that introduces the innovation (as part of its production process) as well as for customers that purchase the innovation (as part of its end use). Firms introduce innovations in response to factors such as regulations, the availability of public support or (current or future) market demand. In most countries regulations (existing or future) are the main driver, followed by market demand from customers. In Sweden, Luxembourg, the Netherlands and Finland, market demand is identified as the main driver of environmental innovations.

Broadband prices have declined continuously over the past decade across the OECD area, while connection speeds have increased. Most OECD countries have at least one operator actively offering fibre-based, high-speed broadband connections, although these may be limited to certain geographical areas. Fibre-to-the-home (FTTH) and fibre-tothe- building (FTTB) also enable symmetrical upload and download speeds, which permit new functionalities and better user experience for a range of online activities, such as sharing pictures, video conferencing or uploading content onto social-networking websites.

Fixed broadband subscriptions in the OECD area reached 292 million in June 2010. Broadband has expanded every year since cable and DSL services were first launched in the mid-1990s. Subscriptions grew at an annual compound growth rate of 39.7% between 2000 and 2009. The largest growth over the last two years was in Mexico (46%), followed by Greece (33%), the Slovak Republic (23%) and Turkey (21%).

Households and individuals in many OECD countries are now accustomed to using broadband (high-speed) connections at home. At present, more than one household out of two has broadband Internet access in three-quarters of OECD countries. Korea has the largest share of households with a broadband connection via a computer or mobile phone (97%). In OECD countries the share ranges from 21% in Mexico to 97% in Korea, for an OECD average of approximately 62%.

The economic, environmental and social impacts of advances in the life sciences create policy interest in relevant economic and innovation indicators of biotechnology