Techniques and Perspectives for Multi-Level Analysis
7. 7.1 R&D policy INTRODUCTION The centrality of R&D activities for socio-economic development is widely acknowledged. Their contribution to the development of social welfare through new and improved knowledge, products and services is unquestionable; furthermore science and technology are regarded as important determinants of economic growth. Economic growth is studied analytically using a production function that represents the relationships between the economic output and the factors of production. Whilst in the past the factors of production were almost exclusively the stock of capital and the stock of labour, more recent economic theories have acknowledged the importance of other factors and among these the centrality of R&D activities. In particular Solow (1957) showed that almost 90 per cent of the growth in the US economy in the first half of the last century could not be explained by the growth in capital and labour, and speculated that the changes could reflect technology advance over time. Nowadays both economic theories based on more sophisticated versions of the classic production function (for example Nelson and Phelps, 1966) and theories that emphasize the influence on growth of other factors, that are not directly specified in an expanded version of the classic equation (for example the so-called ‘new growth’ theory of Romer, 1986, 1994), acknowledge the centrality of investments in R&D and technological change. As stated by Audretsch et al. (2002, p. 166) ‘regardless of whether one adheres to the more narrow old theories or the broader new theories, the evidence...
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