European technology policy

Jonathan Eaton, Eva Gutierrez, Samuel Kortum

Research output: Contribution to journalArticle

25 Scopus citations

Abstract

European countries do less research than Japan and the United States. But their lower level of research effort has more to do with the smaller markets facing European inventors than with lower research productivity. Europe has substantial research potential, in that increasing research effort in most European countries generates bigger income benefits there than increasing research effort in the United States and Japan by equivalent amounts. Research subsidies, enhanced patent protection, support for public research, higher educational achievement and increased integration are alternative routes towards exploiting this potential. These policies increase productivity not only in Europe, but also elsewhere. One problem with implementing such policies at the national level is the potential for free riding. A second possible problem with policies to promote research concerns their distributional consequences. While all countries within the European Union would benefit from increased research output, the countries that are already best at doing research, which tend to be the richer members, do best. The benefits of policies that facilitate the adoption of innovations are more evenly spread among richer and poorer countries.

Original languageEnglish (US)
Pages (from-to)403-438
Number of pages36
JournalEconomic Policy
Issue number27
DOIs
StatePublished - Jan 1 1998

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

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