Innovation and public support policies: a comparative analysis

Fabio Bertolotti (), Luca Citino, Andrea Linarello, Francesca Lotti, Elena Padovani (), Elena Pisano (), Marzia Romanelli (), Alessandra Sanelli (), Filippo Scoccianti (), Enrico Sette and Ernesto Zangari ()
Additional contact information
Fabio Bertolotti: 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
Ernesto Zangari: Bank of Italy

No 898, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

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.

Keywords: innovation; R&D; start-up; tax credit (search for similar items in EconPapers)
JEL-codes: H2 H5 O3 (search for similar items in EconPapers)
Date: 2024-12
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