This paper investigates whether the Lisbon objective regarding the level of the European R&D intensity can be fulfilled. It first explains why the R&D intensity varies significantly across country. The countries with the highest R&D intensity ratio satisfy at least one of the following criteria: i) a large and homogeneous domestic market; ii) a strong specialization in a high-tech sector; iii) a strong support for academic research; and iv) substantial government support (either subsidies or tax credit) to business R&D. Belgium is a laggard in each of these criteria. The optimal government support would correspond to about a 12% subsidization rate and a doubling of academic research.
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Paper provided by Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB) in its series Working Papers CEB with number
04-011.RS.
Find related papers by JEL classification: O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy
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