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The economic benefits of publicly funded basic research: a critical review
journal contributionposted on 2023-06-07, 21:39 authored by Ammon J Salter, Ben MartinBen Martin
This article critically reviews the literature on the economic benefits of publicly funded basic research. In that literature, three main methodological approaches have been adopted — econometric studies, surveys and case studies. Econometric studies are subject to certain methodological limitations but they suggest that the economic benefits are very substantial. These studies have also highlighted the importance of spillovers and the existence of localisation effects in research. From the literature based on surveys and on case studies, it is clear that the benefits from public investment in basic research can take a variety of forms. We classify these into six main categories, reviewing the evidence on the nature and extent of each type. The relative importance of these different forms of benefit apparently varies with scientific field, technology and industrial sector. Consequently, no simple model of the economic benefits from basic research is possible. We reconsider the rationale for government funding of basic research, arguing that the traditional ‘market failure’ justification needs to be extended to take account of these different forms of benefit from basic research. The article concludes by identifying some of the policy implications that follow from this review.
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- SPRU - Science Policy Research Unit Publications
NotesThis major paper on the `real¿ benefits of basic research involved a recasting of about 5 years of SPRU research in the field. It has had a dramatic impact on how policy-makers as well as academic scholars have considered this economic benefit, as `talent not technology¿. Prof Martin inaugurated the longer project and did the bulk of the structuring and finishing of this paper.
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