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Government Support for Commercial R&D: Lessons from the Israeli Experience

In: Innovation Policy and the Economy, Volume 2

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  • Manuel Trajtenberg

Abstract

Israel constitutes an interesting laboratory case of government intervention in the realm of R&D policy. The recognized scientific and technological prowess of the country was leveraged by extensive government support to commercial R&D projects. The Israeli High Tech sector has grown remarkably fast since the mid-1980s, and it is quite likely that indeed government policies significantly contributed to its success. In this paper we review in detail these policies, as well as the challenges that confront them: The design of alternative allocation schemes for R&D grants in view of a rigid budget constraint; possible ways of departing from neutrality, the conditionality of production in Israel; the difficulties in setting a policy target for R&D spending, etc.

(This abstract was borrowed from another version of this item.)

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This chapter was published in:

  • Adam B. Jaffe & Josh Lerner & Scott Stern, 2002. "Innovation Policy and the Economy, Volume 2," NBER Books, National Bureau of Economic Research, Inc, number jaff02-1.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 10786.

    Handle: RePEc:nbr:nberch:10786

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    Cited by:
    1. Giebe, Thomas & Grebe, Tim & Wolfstetter, Elmar, 2006. "How to allocate R&D (and other) subsidies: An experimentally tested policy recommendation," Research Policy, Elsevier, vol. 35(9), pages 1261-1272, November.
    2. Amir Shoham & Gil Avnimelech, 2012. "The development of the successful high tech sector in Israel, 1969-2009," World Review of Entrepreneurship, Management and Sustainable Development, Inderscience Enterprises Ltd, vol. 8(1), pages 53-69.
    3. Stoneman, Paul & Canepa, Alessandra & Kaivanto, Kim, 2003. "The Public Provision of Sales Contingent Contracts as a Policy Response to Financial Constraints to Innovation in European SMEs," EIFC - Technology and Finance Working Papers 38, United Nations University, Institute for New Technologies.
    4. Pontus Braunerhjelm & Per Thulin, 2008. "Can countries create comparative advantages? R&D expenditures, high-tech exports and country size in 19 OECD countries, 1981-1999," International Economic Journal, Taylor & Francis Journals, vol. 22(1), pages 95-111.
    5. Klaus Desmet & Clara Eugenia García & Praveen Kujal & Félix Lobo, 2003. "Implementing R&D Policies: An Analysis Of Spain’S Pharmaceutical Research Program," Economics Working Papers we035923, Universidad Carlos III, Departamento de Economía.
    6. Manuel Trajtenberg, 2005. "Innovation Policy for Development: an Overview," IDB Publications 46598, Inter-American Development Bank.

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