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Public Support for Innovation, Intangible Investment and Productivity Growth in the UK Market Sector

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  • Haskel, Jonathan
  • Wallis, Gavin

Abstract

Pressure on public finances has increased scrutiny of public support for innovation. We examine two particular issues. First, there have been many recent calls for the (relatively new) UK R&D subsidy to be extended to other "research" activities, such as software. Second, argument still rages about the efficacy of direct public spending on R&D via spending on academic research councils, universities, and government undertaken work on civil and military R&D. To evaluate these questions we use data on market sector productivity, R&D and non-R&D intangible assets, and public sector R&D spending. We look for evidence of market sector spillovers from intangible investment and from public R&D. We find (a) no evidence of spillover effects from intangible investment at the market sector level, including from R&D, (b) strong evidence of market sector spillovers from public R&D spend on research councils, and (c) no evidence of market sector spillovers from public spending on civil or defence R&D. Our findings tentatively suggest that for maximum market sector productivity impact government innovation policy should focus on direct spending on research councils.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7725.

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Date of creation: Mar 2010
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Handle: RePEc:cpr:ceprdp:7725

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Keywords: intangible assets; productivity; R&D; spillovers;

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References

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  1. Griliches, Zvi, 1992. " The Search for R&D Spillovers," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(0), pages S29-47, Supplemen.
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Citations

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Cited by:
  1. Ana Rincon & Michela VECCHI & Francesco VENTURINI, 2012. "ICT spillovers, absorptive capacity and productivity performance," Quaderni del Dipartimento di Economia, Finanza e Statistica 103/2012, Università di Perugia, Dipartimento Economia, Finanza e Statistica.
  2. Dan Corry & Anna Valero & John Van Reenen, 2011. "UK economic performance since 1997: growth, productivity and jobs," LSE Research Online Documents on Economics 47521, London School of Economics and Political Science, LSE Library.
  3. repec:cge:warwcg:90 is not listed on IDEAS
  4. Francesco Venturini & Ana Rincon-Aznar & Dr Michela Vecchi, 2013. "ICT as a general purpose technology: spillovers, absorptive capacity and productivity performance," NIESR Discussion Papers 11717, National Institute of Economic and Social Research.
  5. Amani Elnasri & Kevin J. Fox, 2014. "The Contribution of Research and Innovation to Productivity and Economic Growth," Discussion Papers 2014-08, School of Economics, The University of New South Wales.
  6. Federica Rossi & Ainurul Rosli, 2013. "Indicators of university-industry knowledge transfer performance and their implications for universities: Evidence from the UK’s HE-BCI survey," Management Working Papers 13, Birkbeck Department of Management, revised Aug 2013.

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