Innovation and Economic Diversification

The Policy Initiative on Innovation and Economic Diversification focuses on how emerging countries can make the leap to a knowledge-based economy while avoiding dependency on any particular industry or resource. Strong cooperation between the public and private sector, collaborative spaces at the science-industry interface, a stable policy framework adaptable to technological change, and a skilled workforce play key roles in meeting these challenges.

The Policy Initiative was launched in May 2014 with a workshop on “Developing a Skilled Workforce for Economic Diversification” in Baku, Azerbaijan. This has led to ongoing research on the role of the private sector in vocational education and training coordinated by the German Cologne Institute for Economic Research (IW) in collaboration with EPF members from Vietnam, South Korea, India, and Azerbaijan.

This was followed up through the inaugural meeting of T20 in Istanbul in February 2015, hosted by the Economic Policy Research Foundation of Turkey (TEPAV), where innovation policy was identified as central to the Turkish G20 Presidency that year. To feed recommendations into the G20 process, EPF organized a seminar in Berlin in May 2015 on Enhancing Innovative Capacity and International Technology Diffusion. The recommendations developed through this process were presented and discussed with other engagement groups (B20) as well as G20 Sherpas, and ultimately reflected in the G20 Leaders Communiqué.

The Policy Initiative’s recommendations to the G20 Summit stressed the following five points:

  • A G20 innovation framework should consider the specific opportunities in different countries, across sectors and technologies. This would enable better benchmarking and cross-country alignment of innovative policy approaches. A G20 innovation framework could improve transparency about national incentives for and barriers that hinder innovation and investment.
  • A framework should encourage and support the development of regional cross-border, cross-sectoral, cross-technology value chains, so that global frameworks can become a leverage for rather than a constraint on regional innovation.
  • A framework should take into consideration needs where innovative start-up entrepreneurs and SMEs that often lack access to credit, public matching funds and market information.
  • A framework should provide direction and benchmarks for the development of innovative national and cross-country systems for comprehensive and differentiated skilling programs that encourage technology literacy and the matching of skills with labor market demands in a global digital economy.
  • The G20 should support the establishment of a global R&D platform and fund, in order to use and coordinate technology and innovation solutions for global challenges such as health epidemics that have cross-border implications.
  • In addition to the above, EPF Member Getulio Vargas Foundation (FGV) recently started to coordinate research on diversification strategies for resource-rich countries, involving think tanks from the Gulf region and Nigeria. The project aims at analysing different strategies and experiences of countries like Qatar, Saudi Arabia, the United Arab Emirates, and Nigeria in diversifying their economies away from the oil and gas industry.

Lead Organization of Policy Initiative:

The Economic Policy Research Foundation of Turkey (TEPAV)

Members of Policy Initiative:
Fondazione Eni Enrico Mattei (FEEM)
Observer Research Foundation (ORF)
Getulio Vargas Foundation (FGV)
Cologne Institute for Economic Research (IW)
Korea Research Institute of Vocational Education and Training (KRIVET)
Human Sciences Research Council (HSRC)
SEFT Consulting
Central Institute for Economic Management (CIEM)

Related activities:


EPF | Economic Policy Forum

EPF | Economic Policy Forum