UNUnited Nations Economic Commission for Europe

Economic Cooperation and Integration

Globalization, the new technologies and the fall in transport and communication costs have created opportunities for increased prosperity, but have also given rise to new challenges and new competitive pressures in the world economy. Fostering innovation and knowledge-driven development is the cornerstone of any strategy to enhance national competitiveness, increase productivity and provide for sustained economic growth. The creation of the Economic Cooperation and Integration Division (ECID) was a direct result of the UNECE reform adopted in December 2005. This new subprogramme aims to strengthen the competitiveness of member States’ economies by promoting knowledge-based economy and innovation, confirming member States’ belief that international cooperation has an important role in fostering national competitiveness and shared prosperity.

As the challenges of globalization are especially pronounced for those economies currently making the transition to a market economy, the subprogramme’s main focus is on these economies, and their particular needs. For countries facing developmental problems as well, increased competitiveness can be instrumental to achieving the Millennium Development Goals. The common understanding is, however, that the issues addressed by the subprogramme are relevant for all member States.

The subprogramme has a clear policy and practical orientation. Main policy outputs (e.g. synopses of good practices, policy recommendations and guidelines) will be broadly disseminated in member States and will serve as the basis for capacity-building activities that respond to their needs and demands.

Innovation and competitiveness are driven by a multitude of factors, which is reflected in the different thematic areas of the programme of work adopted by the Committee on Economic Cooperation and Integration (CECI). Intergovernmental dialogue on innovation and competitiveness policies identifies good practices in promoting innovative development and knowledge-based competitiveness. The diversity of policy experiences and the wealth of institutional arrangements among member States provides for a fertile ground for knowledge-sharing, leading to the formulation of better policies. Identifying good practices supports an ongoing dialogue and participatory process in which experts from Governments, the private sector and academia all take part.

A favourable environment for entrepreneurship nurtures the forces of innovation and change. New enterprises play a critical role in generating commercially successful new processes and products. The work in this area seeks to identify the barriers hindering entrepreneurship and to help create an environment in which it can flourish. As in other areas, developing wide support networks that bring together Government, the private sector, and academia ensures better policymaking and facilitates its dissemination.

The access of innovative entrepreneurs to finance, through the whole cycle from a product’s invention to its commercialization, is critical for knowledge-driven development. CECI work in this area seeks to identify good practices and the effects of government policies and regulation on financial intermediation. A shared assessment, with inputs from member States representatives and the private sector, can lead to policy recommendations based on best practice. The creation of networks of experts and stakeholders is particularly important in this area, especially for businesses challenged by small size, remoteness or financing constraints.

Intellectual property rights (IPR) have a paramount significance in the innovation process. Adequate protection and enforcement are crucial, as they create the necessary incentives, allow for the recovery of initial investment costs, and compensate innovators for the risks they take. IPR protection and enforcement also affect health and safety standards and fair competition. They are particularly significant for transition economies, where the transformation of R&D outputs into intangible assets often falls short of its potential.

Public-private partnerships (PPPs) can play essential role in the development of competitive advantages and the promotion of innovation. PPPs can be designed to share risks and undertake projects in various fields. The work of the CECI in this area draws on the practical experience of PPPs in market and transition economies, including those with related regulatory policies, with the objective to identify good practices that can eventually lead to policy recommendations.

At its first annual meeting, CECI decided also to create two Teams of Specialists (one on innovation and competitiveness policies and the other on intellectual property) to support programme implementation in these areas. CECI and ECID are also establishing networks of experts in all thematic areas, to facilitate dialogue between various interested parties in different member States and beyond.

This brief overview of the CECI programme of work shows that a variety of policy interventions in different fields support competitiveness and promote innovation. A broad integrated consideration of the issues allows for a better understanding of their interrelations between them and the identification of bottlenecks where policy intervention could yield larger gains.

UNECE is obviously not the only organization carrying out work on these important topics. Collaboration and coordination with other international organizations is necessary to avoid overlap and identify common themes of interest where joint work may be possible. While building on the results of other organizations, CECI will add new value by providing a multilateral forum for intergovernmental discussions and reaching out to countries not covered in the work of others. The broad membership of UNECE allows it to bring the experience accumulated by smaller organizations to a wider constituency.

The way ahead

While we are still at the beginning of the road, a number of important meetings will take place in 2007, including the first session of the Team of Specialists on Innovation and Competitiveness Policies, the meeting on IPR Protection and Transforming R&D Outputs into Intangible Assets, the annual meeting of the Team of Specialists on Intellectual Property and the annual session of CECI. Various events are also planned in the areas of entrepreneurship, financing for innovative development and PPPs. These meetings, which will bring together members of our broader constituency, will have a capacity-building dimension, as they will provide an opportunity for participants from low-income transition countries to engage with the support networks that have access to valuable materials and resources.

We envision that the adoption of CECI policy recommendations and guidelines and ongoing networking activities will mobilize additional resources and expand the range of our capacity-building activities. The networks created will support the broad dissemination of our work, ensuring its maximum effectiveness, as a further driver for enhanced cooperation at the regional and subregional levels. The Web-based virtual platform for exchange of information being established by ECID will provide a structured channel for dialogue between experts as well as a repository for useful material supporting shared assessments and the exchange of experiences.

Mr. Matti Pietarinen
Chairman, Committee on Economic Cooperation and Integration

The range of issues to be considered by the Committee defines an exciting programme of work that is of great relevance to our member States. Innovation is the outcome of complex interaction between individuals, organizations, institutions and the existing system of economic incentives. While competition is a clear driver of innovation, collaborative efforts between private agents and between the public and private sectors are crucial. Innovation is the foundation of sustainable economic development, and addresses challenges to future improvements in welfare.

In many transition countries, the main focus of CECI activity, education levels and a tradition of scientific research create a potential for innovation that is not fully realized due to certain factors. Tapping into this potential would contribute to the increased prosperity of our region.

The creation of wide networks of experts in the various thematic areas is a promising direction for CECI, as they facilitate the circulation of knowledge and the review of the various initiatives undertaken.

CECI provides a unique intergovernmental forum for the exchange of best practices and the sharing of experiences. These can be lessons learned at the national level, or the exploration of those areas where international cooperation have an impact on competitiveness and innovation.

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