Government Support of Commercial R&D: Lessons from the Israeli Experience

Israel constitutes an interesting laboratory case of government intervention in the realm of R&D policy. The recognized scientific and technological prowess of the country was leveraged by extensive government support to commercial R&D projects. The Israeli High Tech sector has grown remarka...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Author Trajtenberg, M
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2001
Subjects
Research & development expenditures
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Summary:Israel constitutes an interesting laboratory case of government intervention in the realm of R&D policy. The recognized scientific and technological prowess of the country was leveraged by extensive government support to commercial R&D projects. The Israeli High Tech sector has grown remarkably fast since the mid-1980s, and it is quite likely that indeed government policies significantly contributed to its success. In this paper we review in detail these policies, as well as the challenges that confront them: The design of alternative allocation schemes for R&D grants in view of a rigid budget constraint; possible ways of departing from neutrality, the conditionality of production in Israel; the difficulties in setting a policy target for R&D spending, etc.