The Economics of R&D Policy

The Economics of R&D Policy

The Economics of R&D Policy

The Economics of R&D Policy

Synopsis

Industry officials and government policymakers have for some time decried the lack of a framework for establishing and defending Research and Development (R&D) policies. Effective policy requires an understanding of the underlying economics. This book offers models and analysis of the economic elements that drive technology-based growth and compares U.S. policies with those used in Europe and Japan. The results of these models and analysis is a framework for matching various forms of underinvestment with efficient strategic and policy responses. This enables industry and government R&D initiatives to be developed, analyzed, and implemented with greater success than previously attained.

Excerpt

Economic studies have clearly shown that technology is the single most important determinant of long-term economic growth. Because technology is an input for economic activity, the strategies and policies that affect the development and use of technology must be conceptualized and analyzed within the context of the broader economic growth process. Research and development (R&D) is the label given to the process by which most technology is developed in a modern economy. R&D policies are critical for overall economic growth, and their effectiveness depends on complete integration into broader economic growth policies.

However, both the substance of R&D policy and the institutional processes by which it is developed are inadequate in three major ways. First, the economic basis necessary for sound policy analysis is deficient. Second, the analytical skills for developing R&D policies are generally inadequate. Third, the available analytical procedures and mechanisms are not integrated into the broader framework of economic growth policies and issues. Given the importance of technology to economic growth, one would expect considerably more resources to be devoted by industrialized nations to the management of R&D policy.

The need for more comprehensive and rigorous R&D policy analysis motivated the writing of this book. Its scope and content are directed at three audiences: economists and policy analysts interested in economic growth issues, business managers concerned about the policy environment in which technology-based investment decisions are made in their companies, and those actually involved in the policy decision-making process.

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