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R&D Policy in Israel: An Overview and Reassessment

  • Manuel Trajtenberg

The goal of this paper is to provide an overview of R&D policy in Israel, and critically examine the policies currently in place as well as proposals to change them. We review in Part I the various programs of the Office of the Chief Scientist (OCS) of the Ministry of Industry and Trade in Israel, followed by a discussion of studies on the impact of OCS support, and an overview of the rise of the High-Tech sector in Israel with the aid patent data. Part II examines outstanding policy issues and suggestions for reform. It opens with a discussion of allocation schemes for the OCS Grants Program in view of a rigid budget constraint, and an assessment of possible departures from neutrality.' We then examine the payback system, the conditionality of production in Israel, the Magnet' program for the support of generic R&D, and related issues. Next we review the difficulties in setting a policy target for R&D spending, and lastly we ask whether government policy should perhaps be aimed also at the supply side (of the market for R&D personnel), rather than just keep subsidizing the demand side. Clearly, these policy issues are of relevance not just for Israel but for any economy contemplating active government involvement in R&D.

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File URL: http://www.nber.org/papers/w7930.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7930.

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Date of creation: Oct 2000
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Publication status: published as Feldman, Maryann P. and Albert N. Link (eds.) Innovation Policy in the Knowledge-Based Economy. Boston: Kluwer Academic Publishers, 2001.
Handle: RePEc:nbr:nberwo:7930
Note: PR
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  1. Jonathan Eaton & Samuel Kortum, 1995. "Trade in Ideas: Patenting and Productivity in the OECD," NBER Working Papers 5049, National Bureau of Economic Research, Inc.
  2. David, Paul A. & Hall, Bronwyn H., 2000. "Heart of darkness: modeling public-private funding interactions inside the R&D black box," Research Policy, Elsevier, vol. 29(9), pages 1165-1183, December.
  3. Paul A. David & Bronwyn H. Hall & Andrew A. Toole, 1999. "Is Public R&D a Complement or Substitute for Private R&D? A Review of the Econometric Evidence," NBER Working Papers 7373, National Bureau of Economic Research, Inc.
  4. Coe, David T & Helpman, Elhanan, 1993. "International R&D Spillovers," CEPR Discussion Papers 840, C.E.P.R. Discussion Papers.
  5. Jonathan Eaton & Eva Gutierrez & Samuel Kortum, 1998. "European Technology Policy," Boston University - Institute for Economic Development 87, Boston University, Institute for Economic Development.
  6. Saul Lach, 2000. "Do R&D Subsidies Stimulate or Displace Private R&D? Evidence from Israel," NBER Working Papers 7943, National Bureau of Economic Research, Inc.
  7. Isabel Busom, 2000. "An Empirical Evaluation of The Effects of R&D Subsidies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(2), pages 111-148.
  8. Goolsbee, Austan, 1998. "Does Government R&D Policy Mainly Benefit Scientists and Engineers?," American Economic Review, American Economic Association, vol. 88(2), pages 298-302, May.
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