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Innovation and public support policies: a comparative analysis

Author

Listed:
  • Fabio Bertolotti

    (Bank of Italy)

  • Luca Citino

    (Bank of Italy)

  • Andrea Linarello

    (Bank of Italy)

  • Francesca Lotti

    (Bank of Italy)

  • Elena Padovani

    (Bank of Italy)

  • Elena Pisano

    (Bank of Italy)

  • Marzia Romanelli

    (Bank of Italy)

  • Alessandra Sanelli

    (Bank of Italy)

  • Filippo Scoccianti

    (Bank of Italy)

  • Enrico Sette

    (Bank of Italy)

  • Ernesto Zangari

    (Bank of Italy)

Abstract

This paper provides a comparative analysis of innovative activity and the public instruments supporting it, with a focus on research and development (R&D) and on innovative firms. Although returning to an upward trend since 2017, direct public spending on R&D as a ratio of GDP in Italy was still below the EU average in 2022. The R&D tax credit is also lower than in other advanced economies. On the other hand, for specific intangible goods expenditures, corresponding to around 20 per cent of total R&D expenditures, tax support appears to be in line with that of the largest European countries. According to our estimates, bringing the Italian tax credit rate in line with the OECD average could encourage firms to increase their R&D spending by more than two billion, a 15 per cent increase. As regards support for innovative start-ups and SMEs, based on an assessment of the level of tax support, the Italian system would be comparable to those of France, the UK and Germany.

Suggested Citation

  • Fabio Bertolotti & Luca Citino & Andrea Linarello & Francesca Lotti & Elena Padovani & Elena Pisano & Marzia Romanelli & Alessandra Sanelli & Filippo Scoccianti & Enrico Sette & Ernesto Zangari, 2024. "Innovation and public support policies: a comparative analysis," Questioni di Economia e Finanza (Occasional Papers) 898, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_898_24
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2024-0898/QEF_898_24.pdf
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    More about this item

    Keywords

    innovation; R&D; start-up; tax credit;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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