Science, technology and innovation policy

Financing of Business R&D


Support of business R&D has become a major objective of innovation policy across OECD countries. Business R&D is seen as a significant driver of national innovation capabilities, and many countries and regions have made increasing business R&D expenditure a policy objective in its own right. TIP work on business R&D aims to inform and improve government policies for stimulating business R&D. It has proceeded along two lines: 1) analyses of changing business R&D strategies; and 2) evaluations of the effectiveness of government financing instruments for business R&D. 

The first line of work recognises that business R&D strategies have changed in recent years and that government policy must adapt to these changes: firms align their internal R&D more closely with corporate objectives and rely on interactions with a growing number of external organisations in the public and private sectors to acquire complementary capabilities (e.g., via outsourced R&D, strategic alliances, collaborative research, or licensing). Several countries (including Austria, Korea, and the Netherlands) undertook national studies to document changes in firm-level R&D strategies in their own countries.

The second element of this work examines the effectiveness of different government financing instruments, notably direct financing of business R&D and R&D tax incentives, in bolstering business R&D. Early work focused on the measuring the increase in business R&D funding stimulated by these measures (i.e., input additionality); more recent work has focused on the changes in firm behaviour stimulated by government funding (i.e., behavioural additionality).

Work in this area has resulted in a number of reports and events:

Related Documents:

Country reports:

Related events:

For further information,  contact: Jerry Sheehan or Shuji Tamura.


Related Documents