THE ECONOMICS OF RESEARCH AND DEVELOPMENT PDF Print E-mail

THE ECONOMICS OF RESEARCH AND DEVELOPMENT

Innovation is acknowledged to be a multidimensional and complex process. Thus, traditional research and development (R&D) expenditures capture only a portion of the sources of and activities involved in innovation. Innovation investment includes: a) basic research; b) product development; c) adoption of new production techniques and technologies; d) organizational change; e) distribution and market changes; f) production organization and access to production factors; and g) training and the development of new skills. Traditional in-house R&D investment is being complemented by external sources of innovation and new knowledge.

Recent contributions in the economics of knowledge and innovation highlight that innovation is a cooperative and collective process. Collaboration between firms, and between firms and universities, R&D centres and technology transfer centres is a strategy aimed at the sharing of knowledge and competencies, and obtaining the benefits of technological complementarities. Innovation is rarely the result of individual firm efforts; it generally emerges from the interactions among local firms and institutions within a network of innovators.

This research is aimed at identifying, understanding and classifying the different ways firms innovate, distinguishing between internal and external sources. Special emphasis is put on understanding the multiple organizational forms involved in innovation and the problems encountered by economic agents and their organizations in acquiring and coordinating their innovative capabilities. The theoretical framework developed is tested on the automotive industry.

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