Today, the world’s societies face severe economic and social challenges. The 2008-09 economic downturn has led to reduced potential output growth, rising unemployment and soaring public debt. To recover, countries need to find new and sustainable sources of growth. The search for new sources of growth comes however at a time when many countries have stagnating or declining populations and face diminishing returns from labour inputs and investment in physical capital. Future growth must therefore increasingly come from innovation-induced productivity growth. Innovation – the introduction of a new or significantly improved product, process or method – holds the key to boosting productivity.
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