Fact of the Week: The Ratio of Societal to Private Returns From Investment in R&D Increased From 3:1 in 1980 to 4:1 in 2015

July 9, 2018

It is well established that business R&D investments produce benefits not just for the company making them, but for the overall society due to knowledge spillovers. Such spillovers mean that businesses underinvest in R&D from a societal perspective. They are also the main reason why governments provide incentives for the private sector to invest more in R&D.

New economic research finds that in the United States society captured four-fifths of the total returns (with the private sector gaining one-fifth) in the 2010s, up from three-fourths in the 1980s. This research underscores the importance of stronger incentives, like the R&D tax credit and the “innovation box” if societies are to reduce the underinvestment in R&D.

Editors’ Recommendations

June 18, 2018

Fact of the Week: If Drug Price Controls Were Lifted Throughout the OECD, the Number of new Treatments Available Would Increase 9 to 12 Percent by 2030

June 25, 2018

Fact of the Week: Manufacturing is not the Only Sector Employing Strong Share of Middle-Skilled Workers: the Film and Music Industries Employ Even Higher Shares

July 2, 2018

Fact of the Week: The Ratio of Societal to Private Returns From Investment in R&D Increased From 3:1 in 1980 to 4:1 in 2015

Editors’ Recommendations

Fact of the Week: If Drug Price Controls Were Lifted Throughout the OECD, the Number of new Treatments Available Would Increase 9 to 12 Percent by 2030

Fact of the Week: Manufacturing is not the Only Sector Employing Strong Share of Middle-Skilled Workers: the Film and Music Industries Employ Even Higher Shares

Fact of the Week: Only a Third of Online News is Original Content