Firm-level innovation data reveal complementary strategies. The majority of innovative firms (both large firms and SMEs) introduce product or process innovations, as well as marketing/organisational innovations. This is true for firms in manufacturing and services.

Firms follow various innovation strategies and these are not always based on R&D. Collaboration is part of innovation processes whether firms perform R&D or not. In all countries R&D-active firms tend to collaborate more frequently on innovation (usually twice as much) than non- R&D-active firms. In Chile and Korea, R&D status does not seem to affect collaboration on innovation. In the United Kingdom, collaboration is embedded in innovation processes and over 50% of non-R&D-active firms engage in it. Policies that stimulate collaboration and network initiatives might affect the entire spectrum of innovative firms.

Trademarks (TM) may serve as indicators of innovative and marketing activity, and may proxy non-technological innovations and innovation in services. Firms tend to register trademarks primarily in their home country. Trademarks registered by non domestic firms can be used as a measure of market penetration and may help understand the kind of products, whether goods or services, exported.

SMEs play an important role in innovation. There are concerns that the recent economic crisis may have affected them disproportionally in terms of securing funding for R&D and other innovation-related activities. In some countries governments play a key role in funding R&D activities of SMEs. In most, between 40% and 80% of government-financed business expenditures in research and development (BERD) goes to SMEs, a figure that reaches over 90% in Estonia and Hungary. However, in larger countries such as the United Kingdom, France and the United States, the bulk of public support goes to large firms.

Governments foster business research and development (R&D) with direct support via grants or procurement and fiscal incentives, such as R&D tax incentives. Today, 26 OECD governments use fiscal incentives to promote business expenditure on R&D, up from 12 in 1995 and 18 in 2004. Among those that do not (Germany, Finland, Sweden), some are discussing their introduction. Brazil, China, India, the Russian Federation, Singapore and South Africa also offer incentives for investment in R&D.

The birth and death of new enterprises are key indicators of business dynamism. Birth rates reflect an important dimension of entrepreneurship: the capacity to start up entirely new businesses. Death rates can give policy makers an indication of the impact of downturns on businesses and show that running a business often also involves failure.

Bank loans are an important source of financing for starting a new business or expanding an existing one. The World Economic Forum’s Global Competiveness Report, which collects data through executive opinion surveys, provides insight on individuals’ views on access to bank loans in different countries. The data show that bank financing became more difficult to obtain between 2007 and 2010 in all countries owing to the financial crisis.

Entry and growth of new firms is important, as is their adaptability to changes in the economy and their ability to exit when necessary. New enterprises drive a large number of obsolete firms out of the market and often do not survive very long themselves. A policy environment that fosters the start-up and growth of new firms is essential for innovation to flourish.

Entrepreneurship empowers people to take their future into their own hands, whether through self-employment or by creating a firm that employs other individuals. A country’s entrepreneurial activity ranges from self-employment to the creation of high-growth firms. While data is not available for all these types of entrepreneurs, selfemployment data is available and helps shed some light into the diversity of entrepreneurs in a country.