Recovery and resilience: how can innovation policy support the response

The coronavirus pandemic has affected many of the factors shaping the R & D and innovation landscape. Innovative businesses, including early stage companies, face running out of cash due to a lack of availability of external finance or funding, and parts of sectors face being wiped out by economic contraction. R & D projects have hit the buffers due to operational restrictions. At the same time, however, there have been some potential positive effects. Businesses have had to innovate rapidly to adapt to new circumstances, resulting in business model changes and investment in new technologies, especially digital solutions. With digitally-enabled solutions becoming in demand, technology companies have made their products freely available. This chapter reviews these changes and discusses the potential impacts of COVID-19 going forward. In this context, the chapter looks at how policies and programmes could be used to best respond to the crisis in ways that may assist with longer-term competitiveness, and the challenges and opportunities that could shape a recovery that places innovation at its centre. It does this through the lens of priorities related to the 2.4% R & D target, supporting innovative companies, and improving innovation diffusion.