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A Toolkit of Policies to Promote Innovation

Nicholas Bloom (), John van Reenen () and Heidi Williams ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Economic theory suggests that market economies are likely to under-provide innovation due to the public good nature of knowledge. Empirical evidence from the US and other advanced economies supports this idea. We summarize the pros and cons of different policy instruments for promoting innovation and provide a basic "toolkit" describing which policies are most effective, based on our reading of the evidence. In the short-run, R&D tax credits or direct public funding seem the most productive, but in the longer-run increasing the supply of human capital (e.g. relaxing immigration rules or expanding university STEM admissions) are likely more effective.

Keywords: Innovation; R&D; intellectual property; tax; competition (search for similar items in EconPapers)
JEL-codes: O31 O32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ino, nep-sbm and nep-tid
Date: 2019-07
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