R&D tax subsidies key to increasing private research investment, finds report

IANIS - Innovative Actions Network for the Information Society:

"The 2004 edition of the Commission's annual report on European Competitiveness has concluded that direct government funding of private research and development (R&D) as well as tax incentives for research both have a 'significant and positive impact on business R&D spending in OECD and EU countries.' The special theme of the 2004 report concerns the impact of public policies on economic performance, including a section on the role of public sector research spending. Overall, the report notes a significant increase in private R&D spending in OECD and EU countries between 1981 and 2002, but says that this trend is more likely the result of a general shift towards more R&D intensive industries than thanks to public research policies or spending. The report does underline the positive impact of public research expenditure, however, noting that: 'Expenditures on R&D performed by universities and public research organisations are significantly positively related to business enterprise sector expenditures on R&D, indicating that public sector R&D and private sector R&D are [complimentary].' (Source: CORDIS News)"