Christian Keuschnigg. Efficiency of R&D Investments

Transkript

1 Forschungsgemeinschaft für Nationalökonomie, FGN, Institute of Economics Christian Keuschnigg Efficiency of R&D Investments Alpbach, August 26, 2011

2 'Efficiency' of R&D investments Economic policy perspective: efficient level of innovation in the economy role of public policy Determinants of innovation: basic research and education at technological frontier technology transfer from universities quality of institutional environment reasons and appropriate policies for more private R&D different policies for different types of firms role of financial sector in financing innovation Some statistics FGN-HSG, Christian Keuschnigg 2

3 R&D spending of firms, % of GDP, ,5 3 2,5 2 1,5 1 0,5 0 Israel Schweden Finnland Japan Korea Schweiz USA Taiwan Singapur Dänemark Österreich Deutschland OECD Island Belgien Luxemburg Frankreich EU-15 EU-27 China Verein. Königreich Slowenien Kanada Irland Tschechien Niederlande Norwegen Portugal Spanien Russland Italien Ungarn Türkei Slowakei Polen Rumänien Source: OECD Main Science, Technology and R&D Statistics Database FGN-HSG, Christian Keuschnigg 3

4 Private R&D shares by firm size, Dark bar: firms with <50 employees Light shaded bar: firms with employees Remaining share to 100% of R&D spending: large firms with 250 or more employees Neuseeland (2005) Griechenland (2005) Slowakei Norwegen Spanien (2006) Irland (2006) Belgien (2006) Portugal Kanada (2006) Polen Australien (2006) Tschechien Ungarn Dänemark (2005) Österreich (2006) Luxemburg (2005) Niederlande (2005) Slowenien (2006) Korea Italien (2006) Schweiz (2004) Finnland Schweden Verein. Königreich Frankreich (2006) USA (2006) Deutschland (2005) Japan Source: OECD, Science, Technology and Industry Scoreboard 2009 FGN-HSG, Christian Keuschnigg 4

5 Subsidies of private R&D, % GDP, ,35 0,30 0,25 Upper part: tax incentives (indirect subsidies) Lower part: direct subsidies to private R&D 0,20 0,15 0,10 0,05 0,00 Korea (2008) Kanada (2008) Frankreich (2008) USA (2008) Belgien Österreich Tschechien Japan Spanien Verein. Königreich (2008) Irland Ungarn Norwegen (2008) Schweden Dänemark (2008) Niederlande Australien (2006) Finnland Portugal Deutschland Island (2008) Luxemburg Neuseeland Italien Schweiz (2008) Türkei Slowakei (2008) Polen Mexiko Griechenland (2005) Source: OECD, Measuring Innovation: A New Perspective, 2010 FGN-HSG, Christian Keuschnigg 5

6 Subsidy rate of 1 US $ R&D, ,45 0,4 0,35 0,3 Dark: small and medium sized firms Light: large firms 0,25 0,2 0,15 0,1 0,05 0-0,05 Frankreich Spanien Portugal Tschechien Indien Brasilien Türkei Norwegen Kanada Korea Südafrika Ungarn Dänemark China Italien Australien Japan Irland Verein. Königreich Singapur Belgien Österreich Niederlande USA Griechenland Polen Chile Schweiz Finnland Slowakei Island Israel Russland Mexiko Luxemburg Schweden Deutschland Neuseeland Source: OECD, Science, Technology and Industry Scoreboard 2009 FGN-HSG, Christian Keuschnigg 6

7 From basic research to private R&D Technology transfer from universities 1. top level teaching at research frontier, transfer in terms of highly competent personnel 2. incentives at university for applied research - patent offices at universities - revenue sharing by researchers 3. incentives for start-up activity by researchers with promising ideas Supporting private R&D tight property rights (patenting) to protect returns to investment appropriate bankruptcy (fresh start) policy to encourage start-up activity fiscal incentives FGN-HSG, Christian Keuschnigg 7

8 Why public subsidies for private R&D? 1. Social return to R&D is high R&D yields positive spillovers to other firms private return 15%, social return 30% there should be more R&D investment 2. Financing problems of private R&D small firms have limited access to risk capital, but 1 of R&D spending more effective in small firms! 3. Global competition for private R&D multinational firms may shift R&D to other countries (Swiss MNEs: 12 bn. Fr in CH, 16 bn. Fr. abroad) R&D subsidies/tax incentives to attract private R&D Firm heterogeneity R&D is most important determinant of firm growth, but different needs of different types of firms! FGN-HSG, Christian Keuschnigg 8

9 Small firms Start-ups and spin-offs 1 R&D more effective in small entrepreneurial firms but have difficulty in raising external risk capital public funds to overcome financing problems Start-ups need more than money often technological, but not managerial experience! most business failures due to management mistakes need money plus managerial advice Venture capital and business angels ideally have own entrepreneurial/industry experience are better able to select and control firms invest risk-capital & strategic business advice VC backed firms perform better and grow larger! FGN-HSG, Christian Keuschnigg 9

10 Large firms Exporting and multinational firms more productive and R&D intensive than other firms have no problem in financing R&D spending benefit from qualified R&D personnel and university know-how may have R&D labs anywhere in the world! countries compete for highly mobile R&D functions International tax competition systematic downward trend in corporate tax, but R&D tax incentives better able to target most R&D intensive and mobile firms UK/France: deduct R&D spending (wages) more than 100% or give direct tax rebate FGN-HSG, Christian Keuschnigg 10

11 Tax incentives or direct subsidies? Direct subsidies expensive, risky application process more difficult to plan potentially misused for industrial policy Tax relief (with carry forward provisions) available for all firms without discrimination let firms/markets decide about direction of innovation rewards successful firms, better for incentives could be combined with cash-payout for start-ups FGN-HSG, Christian Keuschnigg 11

12 Main points Elements of an innovation policy basic research and education at the technological frontier technology transfer from universities property rights protection (patenting) and more lenient bankruptcy rules (fresh-start) availability of active innovation financing (venture capital) tax incentives for R&D investments to overcome financing problems of small firms to attract and keep R&D functions of large firms FGN-HSG, Christian Keuschnigg 12