The discussion took place at the APEC Symposium on Trade and Innovation on Friday in Ha Noi, as part of the APEC Ministers Responsible for Trade (MRT) Meeting to be held on May 20-21.
In his opening remarks, Minister of Industry and Trade Tran Tuan Anh said trade, among other important enablers, plays an essential role in determining an economy’s innovation policy and strategies; while innovation, in return, contributes to promoting trade among economies.
“Given the evolution in the global and regional economy and the dramatic transformation brought about by the Fourth Industrial Revolution, economies are seeking to drive economic growth with innovation as one of the important enablers,” Tuan Anh said.
Innovation – generally understood as “the improvement or creation of products, processes, services, business, or organizational models” – is expected to become the central driver of economic growth and enhance the competitiveness of economies and businesses.
Innovation is not limited to technology, but encompasses non-technological elements such as foreign direct investment (FDI), financial markets, education systems, research and development (R&D), regulatory systems, intellectual property rights (IPR) and taxation.
Since its formation in 1989, trade among APEC member economies has grown rapidly with total trade in goods and services increasing 6.7 times, to US$20 trillion, in 2015, while average tariffs have fallen dramatically from 17 per cent in 1989 to 5.6 per cent in 2014.
Such positive outcomes could be attributed to increased co-operation in bilateral and multilateral trading relations, and the rise of trade agreements within and outside the region, Tuan Anh said.
However, he also mentioned potential challenges including increasing gaps between the developed and less developed economies, the rich and the poor, inequality and social discontent and possible distortion in labour markets.
“Being aware of both opportunities and challenges resulting from innovation, APEC member economies have made great efforts in pursuing innovation to foster sustainable and innovative growth,” the minister said.
In 2014, APEC Leaders declared the APEC Accord on Innovative Development, Economic Reform and Growth that underscores innovative development through promoting co-operation in science and innovation; dissemination and commercialisation of technology; promoting the use and commercialisation of intellectual property and ensuring IPR protection and enforcement.
The 2015 APEC Strategy for Strengthening Quality Growth also reiterates innovation as one of most important drivers of economic growth in the APEC region.
“So as to make this a reality, economies need to facilitate freer flows of capital, people, ideas, technologies, goods, and services across borders in ways that promote competition,” Tuan Anh said.
He also emphasised the importance of creating sound policies which lay the groundwork for businesses to harness their capability and sources to foster innovation and development.
Importance of support policies
Delegates shared their experience and insights on the importance and impacts of trade and investment in promoting innovation through various means. They discussed recent developments in innovation and the role of trade policies and other factors that create an environment that fosters innovation.
Pamela G. Bailey, CEO of the Grocery Manufacturers Association from the United States highlighted the importance of innovation in economic growth, which helps to create jobs and increase productivity.
She said industries involving cutting edge technology are committed to continuing innovation, but suggest the consistent implementation of regulations that support investment in innovation to diminish business costs.
“Innovation cannot happen without consistent the involvement of regulations,” Bailey said.
Robust dialogue with state leaders as part of the regulatory development process and consistent political commitment to advancing regulatory science were necessary to promote innovation, she added.
Experts have also discussed the issue of technology transfer and the commercialisation of innovation, which occur via both formal and informal channels and through the participation and support of various individuals and organisations.
There was also a dialogue between trade ministers and the business community on how trade and other policies can be used to help provide the conditions for innovation, and how governments can help promote the commercialisation of innovation in APEC economies, especially developing ones.