The financial crisis and Greek R&D policy from a Schumpeterian perspective

The current financial crisis has important consequences for small national research systems of the European periphery, where in some cases it leads to reform and significant downsizing of public R&D efforts. This paper develops a normative theoretical framework for guiding decisions concerning reform of R&D systems in periods of financial crises. The aim is to provide guidance for the reform of Greek R&D system and lessons for other national R&D systems faced with financial crises. Contrary to what is generally regarded as 'perceived wisdom', this paper argues that periods of crisis are not suitable for major reforms of R&D systems, even though they may seem to provide political opportunities for reform. Crises exacerbate the costs of R&D reforms and restrict the potential for benefits. Crises, as the discussion of the case of Greece shows, can undermine the trust between the government and the research community, generating important barriers to reform. Copyright The Author 2013. Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oup.com, Oxford University Press.