Effectively financing private sector innovation? Toward a conceptual policy framework

Our understanding of innovation policies has been enhanced. However, there is still a gap in conceptualizing the effectiveness of one of innovation policy’s most important tools: financial incentives (FIs). Scholars developed an understanding of the effectiveness of direct versus indirect FIs, but there is no clear theoretical framework that delineates what kind of financial instruments impact what kind of innovation under what conditions. This paper analyzes the different working and operational logic of the wide array of employed FI worldwide to develop what is, to the best of our knowledge, the first conceptual framework discerning what financial tools fit what aims and contexts. This framework allows the development of testable hypotheses as well as the development of incentives tailored differently for different national innovation missions and market structures, suggesting that the growing reliance among OECD countries on indirect FIs in the form of tax incentives is less then optimal.

• Publication year

  2024

• Venue

  Science and Public Policy

• Publication date

  2024-02-22

• Fields of study

  Not labeled

• Identifiers
  DOI 10.1093/scipol/scae002
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

• Competition, open innovation, and growth challenges in the semiconductor industry: the case of Europe’s clusters

  2023cited by this paper
• Mending the Net: Public Strategies for the Remediation of Network Failures

  2021cited by this paper
• Innovation in Real Places

  2021cited by this paper
• Boosting innovation in small- and medium-sized enterprises through tax incentives: lessons from the UK

  2021cited by this paper
• The dilemmas and uncertainties in assessing the societal impact of research

  2020cited by this paper
• Tax Credits and Small Firm R&D Spending

  2020cited by this paper
• The Politics of Innovation Policy: Building Israel’s “Neo-developmental” State

  2020cited by this paper
• A framework for mission-oriented innovation policy: Alternative pathways through the problem–solution space

  2019cited by this paper
• The Impact and Effectiveness of Fiscal Incentives for R&D

  2019cited by this paper
• OECD Science, Technology and Innovation Outlook 2018

  2018cited by this paper
• NBER WORKING PAPER SERIES THE IMPACT OF CORPORATE TAXES ON FIRM INNOVATION: EVIDENCE FROM THE CORPORATE TAX COLLECTION REFORM IN CHINA

  2018cited by this paper
• Sources of state discipline: lessons from Israel’s developmental state, 1948–1973

  2018cited by this paper
• Mission critical: the ends, means, and design of innovation agencies

  2018cited by this paper
• Subsidies or loans? Evaluating the impact of R&D support programmes

  2017cited by this paper
• Assessing the policy mix of public support to business R&D

  2017cited by this paper
• Incentivising innovation in antibiotic drug discovery and development: progress, challenges and next steps

  2017cited by this paper
• R&D Tax Incentives: Evidence on design, incidence and impacts

  2016cited by this paper
• Fiscal incentives for R&D and innovation in a diverse world

  2016cited by this paper
• Public R&D Policies and Private R&D Investment: A Survey of the Empirical Evidence

  2015cited by this paper
• Education, training and skills in innovation policy

  2015cited by this paper
• Effect of R&D tax credits for SMEs in Japan: a microeconometric analysis focused on liquidity constraints

  2014cited by this paper
• Policy incentives for private innovation and maximising the returns

  2014cited by this paper
• R&D, Patenting and Growth: The Role of Public Policy

  2013cited by this paper
• Back to Basics: Basic Research Spillovers, Innovation Policy and Growth

  2013cited by this paper
• Value for Money? New Microeconometric Evidence on Public R&D Grants in Flanders

  2012cited by this paper
• Evaluating the Impact of R&D Tax Credits on Innovation: A Microeconometric Study on Canadian Firms

  2011cited by this paper
• FROM DIRECT SUPPORT OF BUSINESS SECTOR R&D/INNOVATION TO TARGETING VENTURE CAPITAL/PRIVATE EQUITY: A CATCHING-UP INNOVATION AND TECHNOLOGY POLICY LIFE CYCLE PERSPECTIVE

  2008cited by this paper
• Innovation and the State

  2007cited by this paper
• The relationship between the Norwegian R&D tax credit scheme and other innovation policy instruments

  2007cited by this paper
• Industrial R&D as a national policy: Horizontal technology policies and industry-state co-evolution in the growth of the Israeli software industry

  2007cited by this paper
• What drives business Research and Development (R&D) intensity across Organisation for Economic Co-operation and Development (OECD) countries?

  2006cited by this paper
• Do financial constraints hold back innovation and growth?: Evidence on the role of public policy

  2005cited by this paper
• How Effective are Fiscal Incentives for R&D? A Review of the Evidence

  2000cited by this paper
• SA science and technology indicators

  1994cited by this paper

• No citing papers are available for this paper.