R&D and innovation pathways to business productivity and growth: What does the evidence suggest?

ERC Insight paper

Associated Themes
  • Innovation
  • Productivity and performance

Recent studies provide some strong evidence on the pathways through which public R&D support – for both business and university R&D – support innovation, productivity and growth. These pathways are complex. Recent work by the ERC on ‘productivity heroes’ emphasises the rarity of combining job and productivity growth in firms, while different types of innovation impact aspects of business performance differently.

In this note we consider the pathways through which investment in R&D, and the innovation it induces, can contribute to productivity and growth. The focus is on the differential impacts of privately and publicly funded R&D, the pathways from R&D to different types of innovation (e.g., product/service, process, organisational change) and how this can influence productivity and job growth.