Fostering innovation in Iceland for the digital era
Iceland is an innovative country, but has untapped innovation potential. Strengthening
innovation, especially in the ICT area, is crucial for strong productivity growth
and performance in an increasingly digitalised world, as well as a sustained recovery
from the COVID-19 pandemic. Ensuring more effective public support for business R&D
is important. The R&D tax incentive scheme is generous by international comparison,
but take-up has been low and many smaller firms have not been inclined to innovate.
Following increased support, outcomes need to be monitored regularly. Adopting new
technologies is also essential for stronger innovation outcomes. Competition-friendly
framework conditions are key to sharpening firms’ incentives to adopt advanced technologies.
The public sector too could become more digitalised. The education system needs to
provide relevant skills. Participation of adult workers, especially the less educated,
in re-skilling and up-skilling programmes should increase further. At the same time,
business and universities need to collaborate more to maximise knowledge flows, with
important benefits for innovation and society.
Published on November 04, 2021
In series:OECD Economics Department Working Papersview more titles