A toolkit of policies to promote innovation

Abstract

Economic theory suggests that market economies are likely to underprovide innovation because of the public good nature of knowledge. Empirical evidence from the United States and other advanced economies supports this idea. We summarize the pros and cons of different policy instruments for promoting innovation and provide a basic “toolkit” describing which policies are most effective according to our reading of the evidence. In the short run, R&D tax credits and direct public funding seem the most productive, but in the longer run, increasing the supply of human capital (for example, relaxing immigration rules or expanding university STEM admissions) is likely more effective.

Some Causal Effects of an Industrial Policy

“…All variables are in differences relative to the base year of 1997. columns 2 and 4 of Table 4, panel A. 28 We include each policy variable one by one in columns 1-6, and then all together in column 7. As is clear from the table, the effect of RSA is robust to the inclusion of all these other policy controls, remaining statistically significant with a very similar coefficient throughout (the coefficient in the reduced form is now 0.815 compared to 0.839 in the baseline Table 4 results and for IV is now 0.966 compared to 0.953 in the baseline).…”

“…is the share of 28 Equivalent results for unemployment are contained in online Appendix Table A5. 29 The structural funds coefficient is significant for both specifications in online Appendix Table A5 when we use unemployment as the dependent variable.…”

Leveraging industrial-technological innovation to achieve sustainable development: A systems thinking perspective

“…Enterprises will allocate more resources to support innovation and promote the steady development of the ITI system [ 60 ]. Weak market demands will cause the company cannot to recover the research cost, thus affecting the innovation environment and the sustainable development of the ITI system [ 21 ].…”

“…Moreover, constructing an innovation diffusion mechanism also requires a lot of resources. ITI is also impacted by economic structures [ 18 ], industrial transfer [ 19 ], political relationships [ 20 ], and market demand or other aspects [ 21 ], and the combination of all these factors means that ITI systems are inherently complex.…”

University Innovation and the Professor's Privilege

“…The accounting data run through 2012; they identify which sector the start-up operates in and contain annual measures of start-up performance such as sales, profits, and employees. 11 The patenting analysis is based on separate data collected from several sources. Norwegian Patent Office (NPO) data do not link to the administrative datasets discussed above and we therefore proceed by other means.…”