Home
Free Trial
Free TrialSign In
  • Sign In
  • What we do
    • Countries/Macro
      • Global Economic Model
      • Global Macro Service
      • Global Trade Flows
      • Global Scenarios
      • Country Economic Forecasts
      • US Forecasts
      • Africa Forecasts
      • Event-Driven Analysis
      • All services
    • Cities & Regions
      • Global
      • UK & Europe
      • Americas
      • Africa & Middle East
      • Asia-Pacific
    • Industries
      • Global Industry Service
      • Global Construction Service
    • CONSULTANCY
      • Economic Impact
      • Thought Leadership
      • Macro Consulting
      • Bespoke Forecasting
    • TRAVEL & TOURISM
      • Global Travel Service
      • Global City Travel
      • Air Passenger Forecasts
      • Webinars
      • Resources
      • Careers
      • Awards
    • Contact us to find out more about our forecasting services, models, & scenarios.

      Free trial
  • How we help

    Our economists and analysts help organisations make better decisions, set strategies, improve resiliency, establish policy, discover new opportunities, optimize operations and plan for growth. Find out how we can help you below or use our product recommendation tool to get started.

    • TRENDING TOPICS
      • Presidential election
      • Coronavirus
      • Coronavirus vaccine
      • Climate change
      • Cities
      • Our approach
      • How we help
      • Sectors we serve
      • Blog
  • About Us
  • My Oxford
  • Contact
  • Media
  • Sectors We Serve
  • My sector
    • How we help
      • Asset Management
      • B2C
      • Banking
      • Chemicals
      • Energy
      • Government
      • Infrastructure
      • Manufacturing
      • Mining
      • Real Estate
      • Technology
      • Travel and tourism

The relationship between public and private R&D funding

Oxford Economics was commissioned by the Department for Business, Energy and Industrial Strategy (BEIS), to assess the impact of public R&D support on levels of private R&D spending in the UK and other advanced economies.

Innovation enhances productivity and drives long-run prosperity. It can create new and improved products and processes, and generate cost savings for companies and the taxpayer, as well as numerous other benefits. However, a range of market failures mean that if left entirely to the market, the amount of R&D which takes place would be considerably less than optimal. These failures provide a strong case for government intervention to support R&D across the economy.

Against this backdrop, BEIS was looking to deepen its understanding of the impact of public R&D investment on private R&D investment. It commissioned Oxford Economics to undertake independent research to update the evidence base in this field using the most recent and comprehensive datasets, and through the application of the latest analytical techniques.

For the UK, we found that each £1 of public R&D stimulates between £0.41 and £0.74 of private R&D within the same year. In the long run, the same £1 of public R&D eventually stimulates between £1.96 and £2.34 of private R&D (inclusive of the impact in the first year).

Alongside our analysis of the UK, we estimated the link between public and private R&D rates for nine other OECD countries. We found a wide variation in the impacts of public R&D on private R&D across countries. The greatest impact was found for Japan, where £1 of public support would stimulate £3.16 of public investment in the long term. In contrast, the same £1 of public support in Spain would encourage just £1.21 of private investment.

Read the report

Our economic consulting team are world leaders in quantitative economic analysis, working with clients around the globe and across sectors to build models, forecast markets and evaluate interventions using state-of-the art techniques. Lead consultants on this project were:

Andrew P. Goodwin

Andrew P. Goodwin

Director of Applied Economics, Europe & Middle East

Email
Anubhav Mohanty

Anubhav Mohanty

Lead Econometrician

Email

Oxford Economics’ team is expert at applying advanced economictools that provide valuable insights into today’s most pressing business, financial,and policy issues.

To find out more about our capabilities, contact:

EMEA
Sam Moore
+44 (0)207 803 1415
Email

Americas
Hamilton Galloway
+1 (646) 503 3068
Email

Asia
Rhianne Clark
+65 6850 0112
Email

  • Oxford Economics
    • About us
    • Contact us
    • Media
    • Economists and analysts
    • Careers
  • Products and services
    • Subscription services
    • Economic impact
    • Thought leadership
  • Help and software
    • Help using our services
    • Software and downloads
    • Latest technology developments
  • Privacy and Legal
    • Privacy policy
    • Cookies
    • Data protection
    • Terms and conditions
    • Software Support and Training
  • Follow Us
    • LinkedIn
    • Twitter
    • Facebook
© Oxford Economics 2020 all rights reserved