The R&D-growth paradox arises in fast-growing sectors
Several notions of a R&D paradox can be found in the literature. In the Swedish Paradox version, the emphasis is normally on high and growing levels of business R&D connected to comparatively low GDP growth rates. This paper examines whether this pattern is consistent over time and, more importantly, which sectors drive the aggregate patterns. Based on an investigation of the entire Swedish economy 1985-2001, there is clear evidence that the paradox occurs only in fast-growing manufacturing and service sectors. Fast-growing sectors show an increasing gap between R&D and value-added growth, while the slow-growing sectors do not. This paradox is not interpreted as a sign of failure of the national innovation system, as the largest gap would then be for the slow-growing sectors, failing to transform R&D to economic growth. The gap between R&D and GDP is consistent with the idea of diminishing marginal returns to R&D investment in high-investing sectors. The evidence does not rule out, however, that rendering the innovation system more effective could yield better outcomes. As the findings of a gap are quite consistent over time, it seems fair to conclude that businesses have good reasons for their high R&D investments, despite not being on par with their production growth.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Malerba, Franco, 2002. "Sectoral systems of innovation and production," Research Policy, Elsevier, vol. 31(2), pages 247-264, February.
- Karl-Johan Lundquist & Lars-Olof Olander & Martin Svensson Henning, 2008. "Decomposing The Technology Shift: Evidence From The Swedish Manufacturing Sector," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 99(2), pages 145-159, 04.
- Aghion, P. & Howitt, P., 1990.
"A Model Of Growth Through Creative Destruction,"
DELTA Working Papers
90-12, DELTA (Ecole normale supérieure).
- Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
- Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," Working papers 527, Massachusetts Institute of Technology (MIT), Department of Economics.
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
- Grossman, G.M. & Helpman, E., 1993.
"Endogenous, Innovation in the Theory of Growth,"
165, Princeton, Woodrow Wilson School - Public and International Affairs.
- Francesco Lissoni & Patrick Llerena & Maureen McKelvey & Bulat Sanditov, 2008.
"Academic Patenting in Europe: New Evidence from the KEINS Database,"
Working Papers of BETA
2008-16, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- Francesco Lissoni & Patrick Llerena & Maureen McKelvey & Bulat Sanditov, 2008. "Academic patenting in Europe: new evidence from the KEINS database," Research Evaluation, Oxford University Press, vol. 17(2), pages 87-102, June.
- Francesco Lissoni & Patrick Llerena & Maureen McKelvey & Bulat Sanditov, 2007. "Academic Patenting in Europe: New Evidence from the KEINS Database," KITeS Working Papers 202, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jun 2007.
- Jones, C.I., 2000.
"Sources of U.S. Economic Growth in a World of Ideas,"
99-29, United Nations World Employment Programme-.
- Charles I. Jones, 2002. "Sources of U.S. Economic Growth in a World of Ideas," American Economic Review, American Economic Association, vol. 92(1), pages 220-239, March.
- Charles I. Jones, "undated". "Sources of U.S. Economic Growth in a World of Ideas," Working Papers 98009, Stanford University, Department of Economics.
- Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
- Freeman, Chris & Louca, Francisco, 2001.
"As Time Goes By: From the Industrial Revolutions to the Information Revolution,"
Oxford University Press, number 9780199241071.
- Freeman, Chris & Louca, Francisco, 2002. "As Time Goes By: From the Industrial Revolutions to the Information Revolution," OUP Catalogue, Oxford University Press, number 9780199251056.
- Dahmen, Erik, 1984. "Schumpeterian dynamics : Some methodological notes," Journal of Economic Behavior & Organization, Elsevier, vol. 5(1), pages 25-34, March.
- Pontus Braunerhjelm & Zoltán J. Ács & David B. Audretsch & Bo Carlsson, 2015.
"The missing link: knowledge diffusion and entrepreneurship in endogenous growth,"
in: Global Entrepreneurship, Institutions and Incentives, chapter 6, pages 108-128
Edward Elgar Publishing.
- Pontus Braunerhjelm & Zoltan Acs & David Audretsch & Bo Carlsson, 2010. "The missing link: knowledge diffusion and entrepreneurship in endogenous growth," Small Business Economics, Springer, vol. 34(2), pages 105-125, February.
- Anders Granberg & Staffan Jacobsson, 2006. "Myths or reality - a scrutiny of dominant beliefs in the Swedish science policy debate," Science and Public Policy, Oxford University Press, vol. 33(5), pages 321-340, June.
- Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3), pages 783-832.
- Karl-Johan Lundquist & Lars-Olof Olander & Martin Svensson Henning, 2008. "Producer services: growth and roles in long-term economic development," The Service Industries Journal, Taylor & Francis Journals, vol. 28(4), pages 463-477, May.
- Ejermo, Olof & Kander, Astrid, 2006. "The Swedish Paradox," Papers in Innovation Studies 2006/1, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:40:y:2011:i:5:p:664-672. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.