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By Organisation for Cooperation and Development
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1], largely reflecting increases in R&D in the business sector, which accounts for the majority of expenditure in this area in most OECD countries. On the contrary, publicly financed business-sector R&D has declined over the past decade [ 1]. H. A. Toole (1999), “Is Public R&D a Complement or Substitute for Private R&D? A Review of the Econometric Evidence”, NBER Working Papers, No. 7373. e. whether government spending on R&D adds to total investment in this area, or simply replaces activities that would otherwise have been undertaken by the private sector.
This faster real growth will translate into a larger contribution of IT capital to growth performance. a a 7] and The method used in the work by Colecchia and Schreyer [ 8] adjusts for these differences. They are therefore Van Ark, et al. [ more comparable than the results of individual national studies. Nevertheless, the national studies typically show the same countries as experiencing a large impact of IT investment on growth, notably Australia, Canada, Korea, the United Kingdom and the United States.
Returns to R&D in these industries may be short lived, and are likely to be driven by the need to engage in product differentiation to maintain/acquire © OECD 2004 Understanding Economic Growth 59 market shares. By contrast, high-tech but concentrated industries are generally characterised by “creative accumulation”, with the prevalence of large, established firms and the presence of barriers for new innovators. Returns to R&D in these industries are, therefore, likely to be larger than in low concentration ones, possibly leading to persistent technological leadership.