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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.
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  • Manuel Trajtenberg, 2002. "Government Support for Commercial R&D: Lessons from the Israeli Experience," NBER Chapters, in: Innovation Policy and the Economy, Volume 2, pages 79-134, National Bureau of Economic Research, Inc.
  • 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. Maximilian Benner, 2019. "Industrial Policy in the EU and Its Neighbourhood: Learning from Policy Experimentation," Economies, MDPI, Open Access Journal, vol. 7(2), pages 1-22, May.
    3. Kujal, Praveen & García, Clara Eugenia & Desmet, Klaus & Lobo, Félix, 2003. "Implementing R and D policies : an analysis of Spain's pharmaceutical research program," UC3M Working papers. Economics we035923, Universidad Carlos III de Madrid. Departamento de Economía.
    4. Desmet, Klaus & Kujal, Praveen & Lobo, Felix, 2004. "Implementing R&D policies: an analysis of Spain's pharmaceutical research program," Research Policy, Elsevier, vol. 33(10), pages 1493-1507, December.
    5. Rockett, Katharine, 2010. "Property Rights and Invention," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 315-380, Elsevier.
    6. 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.
    7. Manuel Trajtenberg, 2009. "Innovation Policy for Development: An Overview," Chapters,in: The New Economics of Technology Policy, chapter 26 Edward Elgar Publishing.
    8. Wonglimpiyarat, Jarunee, 2016. "Exploring strategic venture capital financing with Silicon Valley style," Technological Forecasting and Social Change, Elsevier, vol. 102(C), pages 80-89.
    9. Mar'yasis, Dmitriy A. (Марьясис, Дмитрий), 2017. "Possibilities of Transforming the State Support of Innovations System. The Case of Israel [Система Государственной Поддержки Инноваций: Опыт Израиля]," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 5, pages 80-103, October.
    10. Clò, Stefano & Florio, Massimo & Rentocchini, Francesco, 2020. "Firm ownership, quality of government and innovation: Evidence from patenting in the telecommunication industry," Research Policy, Elsevier, vol. 49(5).
    11. Wonglimpiyarat, Jarunee, 2016. "Government policies towards Israel's high-tech powerhouse," Technovation, Elsevier, vol. 52, pages 18-27.
    12. Juan Ricardo Perilla Jimenez, 2019. "Mainstream and evolutionary views of technology, economic growth and catching up," Journal of Evolutionary Economics, Springer, vol. 29(3), pages 823-852, July.
    13. 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.

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    More about this item

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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