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Innovation, job creation and productivity: implications for public policy

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  • Ugur, Mehmet

Abstract

Direct and indirect public support (subsidies and tax relief) for business R&D in the UK is higher than most other OECD countries. Nevertheless, total business R&D expenditure as percentage of GDP in the UK (1.7%) is relatively low compared to OECD countries (2.43%). This policy brief summarizes the findings from an ESRC-funded research project on productivity and employment effects of R&D investment; and on whether direct public support has had additionality effects in terms of increasing the funded firms’ R&D investment. The findings suggest that the bot the effects of R&D on productivity and employment and the effect of subsidies on private R&D effort are heterogeneous and non-linear. Therefore, we call for well-targeted R&D subsidies, new conditionality clauses taking account of past performance, and industry-specific targets for R&D investment.

Suggested Citation

  • Ugur, Mehmet, 2018. "Innovation, job creation and productivity: implications for public policy," Greenwich Papers in Political Economy 19096, University of Greenwich, Greenwich Political Economy Research Centre.
    • Handle: RePEc:gpe:wpaper:19096
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    File URL: http://gala.gre.ac.uk/id/eprint/19096/1/Ugur_PB_20_2018.pdf
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    References listed on IDEAS

    as
    1. Ugur, Mehmet & Trushin, Esref & Solomon, Edna M., 2015. "UK and EU subsidies and private R&D investment: Is there input additionality?," Greenwich Papers in Political Economy 14082, University of Greenwich, Greenwich Political Economy Research Centre.
    2. Solomon, Edna M. & Ugur, Mehmet & Guidi, Francesco & Trushin, Esref, 2015. "Variations in the effect of R&D investment on firm productivity: UK evidence," Greenwich Papers in Political Economy 14081, University of Greenwich, Greenwich Political Economy Research Centre.
    3. Ugur, Mehmet & Trushin, Eshref & Solomon, Edna, 2016. "Inverted-U relationship between R&D intensity and survival: Evidence on scale and complementarity effects in UK data," Research Policy, Elsevier, vol. 45(7), pages 1474-1492.
    4. Ugur, Mehmet & Trushin, Eshref & Solomon, Edna, 2016. "A firm-level dataset for analyzing entry, exit, employment and R&D expenditures in the UK: 1997–2012," Greenwich Papers in Political Economy 15556, University of Greenwich, Greenwich Political Economy Research Centre.
    5. Ugur, Mehmet & Trushin, Eshref & Solomon, Edna & Guidi, Francesco, 2016. "R&D and productivity in OECD firms and industries: A hierarchical meta-regression analysis," Research Policy, Elsevier, vol. 45(10), pages 2069-2086.
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    More about this item

    Keywords

    Innovation; R&D; Employment; Productivity; Public Policy;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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