PERSPECTIVE: DETERMINING RESEARCH AND DEVELOPMENT EXPENDITURE TARGETS BASED ON AN AFFORDABILITY INDEX

David R. Walwyn
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David R. Walwyn: School of Engineering and Technology Management, University of Pretoria, South Africa

International Journal of Innovation and Technology Management (IJITM), 2010, vol. 07, issue 02, 183-191

Abstract: Gross domestic expenditure on research and development (GERD), usually expressed as a percentage of gross domestic product (GDP), is a widely used indicator to reflect the research intensity within a national economy, and hence its capacity to develop new and innovative products or services. It is also used as a key target in the management of national innovation systems. For instance, the South African National Research and Development Strategy set a target of raising GERD/GDP to 'somewhat over 1%', and in 2002 the Barcelona European Council set an EU target of 3%. Despite its widespread usage, there is little discussion or agreement on how this target should be derived within a broad range of economic contexts and levels of affordability. In this paper, a composite indicator based on GERD/GDP, normalised for GDP per capita, is developed and its use in a number of countries explored and explained. As a result, a set of GERD/GDP targets for various categories of developing countries is proposed.

Keywords: Gross domestic expenditure; research and development; indicators; developing countries; investment target (search for similar items in EconPapers)
Date: 2010
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DOI: 10.1142/S0219877010001908

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