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An Overview of Public Policies to Support Innovation


  • Florence Jaumotte
  • Nigel Pain


Innovation is a broad topic, about which much has been written. Almost every kind of public policy has either a direct or an indirect impact on factors that affect innovative activity. The purpose of this paper is to draw out the key implications from selected studies concerning a small number of science-related policies that are widely employed in order to deal with perceived market failures in the innovation process. The main issues considered are fiscal incentives for private R&D, the role of public research organisations, the regulation of intellectual property, the availability of finance, and the supply of skilled human resources for science and technology. Two central themes developed in the paper are the need for accurate evaluation of all these policies, since each may have costs as well as benefits, and the likely enhancement of the wider social benefits from innovation if knowledge is able to diffuse freely, and if potential beneficiaries have sufficient absorptive capacity to be able to understand and use new knowledge productively. Revue des politiques publiques en faveur de l'innovation L’innovation est un sujet vaste qui a fait l’objet d’une littérature abondante. Presque tout instrument de politique économique a un impact, soit direct, soit indirect, sur les déterminants de l’activité d’innovation. L’objectif de ce papier est de faire le point, à partir d’une sélection d’études, sur un petit nombre de politiques d’innovation couramment utilisées pour remédier aux imperfections de marché dans le processus d’innovation. Celles-ci incluent les incitations publiques aux activités privées de recherche et développement (R&D), le rôle des instituts publics de recherche, les droits de propriété intellectuelle, le développement du secteur financier, et la disponibilité de ressources humaines qualifiées en science et technologie. Deux thèmes centraux développés dans le papier sont d’une part le besoin d’une évaluation précise de toutes ces politiques, étant donné que chacune d’entre elles présente à la fois des coûts et des bénéfices, et d’autre part l’importance de la diffusion du savoir qui accroît substantiellement les bénéfices sociaux de l’innovation, à condition que les bénéficiaires potentiels jouissent d’une capacité d’absorption suffisante pour comprendre et appliquer productivement le nouveau savoir.

Suggested Citation

  • Florence Jaumotte & Nigel Pain, 2005. "An Overview of Public Policies to Support Innovation," OECD Economics Department Working Papers 456, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:456-en

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    Cited by:

    1. Kamilia Loukil, 2016. "Role of Human Resources in the Promotion of Technological Innovation in Emerging and Developing Countries," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 341-352, September.
    2. Kokko, Ari & Tingvall, Patrik Gustavsson & Videnord, Josefin, 2015. "The growth effects of R&D spending in the EU: A meta-analysis," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 9, pages 1-26.
    3. World Bank, 2006. "Pakistan : An Assessment of the Medium-Term Development Framework," World Bank Other Operational Studies 19450, The World Bank.
    4. Ljungwall, Christer & Tingvall, Patrik Gustavsson, 2015. "Is China different? A meta-analysis of the growth-enhancing effect from R&D spending in China," China Economic Review, Elsevier, vol. 36(C), pages 272-278.
    5. Pierre-André Buigues & Khalid Sekkat, 2011. "Public Subsidies to Business: An International Comparison," Journal of Industry, Competition and Trade, Springer, vol. 11(1), pages 1-24, March.
    6. Beck, Mathias & Junge, Martin & Kaiser, Ulrich, 2017. "Public Funding and Corporate Innovation," IZA Discussion Papers 11196, Institute for the Study of Labor (IZA).
    7. Erol Taymaz & Yesim Ucdogruk, 2013. "The Demand for Researchers: Does Public R&D Support Make a Difference?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 90-99, June.
    8. Dodgson, Mark & Hughes, Alan & Foster, John & Metcalfe, Stan, 2011. "Systems thinking, market failure, and the development of innovation policy: The case of Australia," Research Policy, Elsevier, vol. 40(9), pages 1145-1156.
    9. Singh, Lakhwinder & Singh, Baldev, 2009. "National Innovation System in the Era of Liberalization: Implications for Science and Technology Policy for Developing Economies," MPRA Paper 15432, University Library of Munich, Germany.
    10. Simachev, Yuri & Kuzyk, Mikhail & Feygina, Vera, 2014. "Russian policies in support of innovation: elusive quest for efficiency," MPRA Paper 56750, University Library of Munich, Germany.
    11. Singh, Lakhwinder, 2006. "Innovations and Economic Growth in a Fast Changing Global Economy: Comparative Experience of Asian Countries," MPRA Paper 80, University Library of Munich, Germany.
    12. repec:nea:journl:y:2017i:34:p:59-93 is not listed on IDEAS
    13. Desiderio Romero Jordán & José Félix Sanz Sanz, 2007. "Eficacia de los incentivos fiscales a la inversión en I+D en España en los años noventa," Hacienda Pública Española, IEF, vol. 183(4), pages 9-32, december.
    14. Balashova, Svetlana, 2015. "The impact of public R&D policy on business-funded R&D (case of OECD countries)," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 64-82.
    15. Graziano Pini, 2010. "Governance of Tech Transfer: Recent Experiences in Some Developed Regions of Europe," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 16(4), pages 872-883, February.
    16. Ljungwall, Christer & Gustavsson Tingvall, Patrik, 2014. "No. 233 Is China Different? A Meta-Analysis of the Growth-enhancing Effect from R&D Spending in China," Ratio Working Papers 233, The Ratio Institute.

    More about this item


    droit de propriété intellectuelle; fiscal incentives; incitations publiques; innovation; innovation; instituts publics de recherche; intellectual property rights; public research organisations; scientifiques et ingénieurs; scientists and engineers;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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    1. Socio-Economics of Innovation


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