King, M; Renedo, E (2020) Achieving the 2.4% GDP target: the role of measurement in increasing investment in R&D and innovation. NPL Report. IEA 3

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Abstract

This paper makes the case that achieving the 2.4% target mainly depends on raising the private returns from R&D so that businesses invest more in R&D. However, the UK is close to the limit of what can be achieved through current funding mechanisms. Hence, policy makers should consider other forms of intervention aimed at fundamentally altering the productivity of R&D without just resorting to further subsidies.
Specifically, this paper makes the case for further investment in the nation’s measurement infrastructure to ensure good access to research tools, techniques, and standards. Over the last 20 years, investment in such infra-technologies has not kept pace with investment in R&D. There is reason to think that underinvestment has contributed to a decline in the productivity of R&D in areas where relevant infra-technologies either don’t exist or need extending into new domains.
Radically updating the stock of infra-technologies requires additional public funding but would increase the efficiency by which private R&D converts generic technologies into proprietary technologies. (Infra-technologies for the life sciences are used as an example but there are a host of new scientific fields in need of support.) Interventions to fundamentally increase the productivity of R&D will necessarily bring business investments in R&D closer the 2.4% target by increasing the proportion of the potential R&D projects that are privately profitable.

Item Type:	Report/Guide (NPL Report)
NPL Report No.:	IEA 3
Subjects:	International
Divisions:	Strategy Directorate
Last Modified:	16 Jun 2020 10:14
URI:	http://eprintspublications.npl.co.uk/id/eprint/8653

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