July 18, 2001

The social costs and benefits of subsidising R&D

Technologiesubsidies: wat levert het op?

Press release
Er zijn sterke aanwijzingen dat bedrijven vanuit maatschappelijk oogpunt te weinig R&D (Research en Development, ook wel Speur- en Ontwikkelingswerk genoemd) verrichten. De overheid probeert daarom R&D bij bedrijven te stimuleren.

We are sorry, unfortunately there is no English translation of this page.

However, a tentative social cost-benefit account of the WBSO - the major Dutch R&D tax incentive scheme - shows that the available empirical evidence does not support an unqualified statement about the sign and size of the actual welfare effects of the WBSO.

Although the social returns to R&D may be large, the policy programme may support R&D that would have been done anyhow, it may raise R&D wages rather than R&D volume, or it may relocate researchers from jobs with similarly large social returns.

The analysis indicates that a further increase of the WBSO budget would have a relatively low impact. Other policy options show more promise: more focus on small and medium-sized firms, a shift to policy instruments directly targeting R&D labour supply, and a more selective admission of WBSO project proposals.

This publication is in Dutch.


Maarten Cornet