Innovation Shortfalls
There is a common perception that low productivity or low growth is due to what can be called an "innovation shortfall," usually identified as a low rate of investment in research and development (R&D) when compared with some high inn...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/07/7964756/innovation-shortfalls http://hdl.handle.net/10986/7470 |
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okr-10986-74702021-04-23T14:02:33Z Innovation Shortfalls Maloney, William Rodríguez-Clare, Andrés AFFILIATED ORGANIZATIONS AVERAGE PRODUCTIVITY BENCHMARKING CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL-LABOR CAPITAL-LABOR RATIO CAPITAL-OUTPUT RATIO COMPARATIVE ADVANTAGE CONSTANT RATE COST OF R&D DEVELOPMENT ECONOMICS DISCOUNT RATE DOMESTIC FIRMS DOMESTIC R&D ECONOMIC GROWTH ECONOMIC STRUCTURE EQUILIBRIUM EQUILIBRIUM ANALYSIS EXTERNALITIES EXTERNALITY FACTORS OF PRODUCTION FREE FLOW FUTURE RESEARCH GDP GROWTH DIAGNOSTICS GROWTH RATE HUMAN CAPITAL INCOME INCOME DIFFERENCES INCOME LEVELS INCOME TAXES INCREASE IN LABOR INTEREST RATE INTERNATIONAL SPILLOVERS INTERNATIONAL TRADE INVESTMENT GOODS INVESTMENT IN RESEARCH INVESTMENT LEVELS INVESTMENT RATE INVESTMENT RATES KNOWLEDGE CAPITAL KNOWLEDGE SPILLOVERS LABOR FORCE LABOR PRODUCTIVITY LATIN AMERICAN LDCS MARKET FAILURES NATIONAL ECONOMY NATURAL RESOURCES NEOCLASSICAL MODEL OPEN ECONOMY OPTIMIZATION PRIVATE RATE PRIVATE RATES PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH R&D R&D INTENSITIES R&D INTENSITY R&D INVESTMENT R&D POLICY R&D SPENDING R&D SPILLOVERS R&D TAX RATE OF INVESTMENT RATE OF RETURN RATE OF RETURN TO CAPITAL RATES OF RETURN REAL INTEREST RATE RELATIONSHIP BETWEEN R&D SHADOW PRICES SOUTH AMERICA STATE EQUILIBRIUM TAX POLICY TAX RATE TAX RATES TECHNOLOGICAL CHANGE TFP TOTAL LABOR FORCE TOTAL OUTPUT TRADE BARRIERS TRADE THEORY VALUE ADDED WAGES There is a common perception that low productivity or low growth is due to what can be called an "innovation shortfall," usually identified as a low rate of investment in research and development (R&D) when compared with some high innovation countries. The usual reaction to this perceived problem is to call for increases in R&D investment rates, usually specifying a target that can be as high as 3 percent of GDP. The problem with this analysis is that it fails to see that a low R&D investment rate may be appropriate given the economy's pattern of specialization, or may be just one manifestation of more general problems that impede accumulation of all kinds of capital. How can we know when a country suffers from an innovation shortfall above and beyond the ones that should be expected given the country's specialization and accumulation patterns? This is the question the authors tackle in this paper. First, they show a simple way to estimate the R&D gap that can be explained by a country's specialization pattern, illustrating it for the case of Chile. For this country they find that although its specialization in natural-resource-intensive sectors explains part of its R&D gap, a significant shortfall remains. Second, the authors show how a calibrated model can be used to determine the R&D gap that should be expected given a country's investment in physical and human capital. If the actual R&D gap is above this expected gap, then one can say that the country suffers from a true innovation shortfall. 2012-06-07T20:37:42Z 2012-06-07T20:37:42Z 2007-07 http://documents.worldbank.org/curated/en/2007/07/7964756/innovation-shortfalls http://hdl.handle.net/10986/7470 English Policy Research Working Paper; No. 4283 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
AFFILIATED ORGANIZATIONS AVERAGE PRODUCTIVITY BENCHMARKING CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL-LABOR CAPITAL-LABOR RATIO CAPITAL-OUTPUT RATIO COMPARATIVE ADVANTAGE CONSTANT RATE COST OF R&D DEVELOPMENT ECONOMICS DISCOUNT RATE DOMESTIC FIRMS DOMESTIC R&D ECONOMIC GROWTH ECONOMIC STRUCTURE EQUILIBRIUM EQUILIBRIUM ANALYSIS EXTERNALITIES EXTERNALITY FACTORS OF PRODUCTION FREE FLOW FUTURE RESEARCH GDP GROWTH DIAGNOSTICS GROWTH RATE HUMAN CAPITAL INCOME INCOME DIFFERENCES INCOME LEVELS INCOME TAXES INCREASE IN LABOR INTEREST RATE INTERNATIONAL SPILLOVERS INTERNATIONAL TRADE INVESTMENT GOODS INVESTMENT IN RESEARCH INVESTMENT LEVELS INVESTMENT RATE INVESTMENT RATES KNOWLEDGE CAPITAL KNOWLEDGE SPILLOVERS LABOR FORCE LABOR PRODUCTIVITY LATIN AMERICAN LDCS MARKET FAILURES NATIONAL ECONOMY NATURAL RESOURCES NEOCLASSICAL MODEL OPEN ECONOMY OPTIMIZATION PRIVATE RATE PRIVATE RATES PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH R&D R&D INTENSITIES R&D INTENSITY R&D INVESTMENT R&D POLICY R&D SPENDING R&D SPILLOVERS R&D TAX RATE OF INVESTMENT RATE OF RETURN RATE OF RETURN TO CAPITAL RATES OF RETURN REAL INTEREST RATE RELATIONSHIP BETWEEN R&D SHADOW PRICES SOUTH AMERICA STATE EQUILIBRIUM TAX POLICY TAX RATE TAX RATES TECHNOLOGICAL CHANGE TFP TOTAL LABOR FORCE TOTAL OUTPUT TRADE BARRIERS TRADE THEORY VALUE ADDED WAGES |
| spellingShingle |
AFFILIATED ORGANIZATIONS AVERAGE PRODUCTIVITY BENCHMARKING CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL-LABOR CAPITAL-LABOR RATIO CAPITAL-OUTPUT RATIO COMPARATIVE ADVANTAGE CONSTANT RATE COST OF R&D DEVELOPMENT ECONOMICS DISCOUNT RATE DOMESTIC FIRMS DOMESTIC R&D ECONOMIC GROWTH ECONOMIC STRUCTURE EQUILIBRIUM EQUILIBRIUM ANALYSIS EXTERNALITIES EXTERNALITY FACTORS OF PRODUCTION FREE FLOW FUTURE RESEARCH GDP GROWTH DIAGNOSTICS GROWTH RATE HUMAN CAPITAL INCOME INCOME DIFFERENCES INCOME LEVELS INCOME TAXES INCREASE IN LABOR INTEREST RATE INTERNATIONAL SPILLOVERS INTERNATIONAL TRADE INVESTMENT GOODS INVESTMENT IN RESEARCH INVESTMENT LEVELS INVESTMENT RATE INVESTMENT RATES KNOWLEDGE CAPITAL KNOWLEDGE SPILLOVERS LABOR FORCE LABOR PRODUCTIVITY LATIN AMERICAN LDCS MARKET FAILURES NATIONAL ECONOMY NATURAL RESOURCES NEOCLASSICAL MODEL OPEN ECONOMY OPTIMIZATION PRIVATE RATE PRIVATE RATES PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH R&D R&D INTENSITIES R&D INTENSITY R&D INVESTMENT R&D POLICY R&D SPENDING R&D SPILLOVERS R&D TAX RATE OF INVESTMENT RATE OF RETURN RATE OF RETURN TO CAPITAL RATES OF RETURN REAL INTEREST RATE RELATIONSHIP BETWEEN R&D SHADOW PRICES SOUTH AMERICA STATE EQUILIBRIUM TAX POLICY TAX RATE TAX RATES TECHNOLOGICAL CHANGE TFP TOTAL LABOR FORCE TOTAL OUTPUT TRADE BARRIERS TRADE THEORY VALUE ADDED WAGES Maloney, William Rodríguez-Clare, Andrés Innovation Shortfalls |
| relation |
Policy Research Working Paper; No. 4283 |
| description |
There is a common perception that low
productivity or low growth is due to what can be called an
"innovation shortfall," usually identified as a
low rate of investment in research and development (R&D)
when compared with some high innovation countries. The usual
reaction to this perceived problem is to call for increases
in R&D investment rates, usually specifying a target
that can be as high as 3 percent of GDP. The problem with
this analysis is that it fails to see that a low R&D
investment rate may be appropriate given the economy's
pattern of specialization, or may be just one manifestation
of more general problems that impede accumulation of all
kinds of capital. How can we know when a country suffers
from an innovation shortfall above and beyond the ones that
should be expected given the country's specialization
and accumulation patterns? This is the question the authors
tackle in this paper. First, they show a simple way to
estimate the R&D gap that can be explained by a
country's specialization pattern, illustrating it for
the case of Chile. For this country they find that although
its specialization in natural-resource-intensive sectors
explains part of its R&D gap, a significant shortfall
remains. Second, the authors show how a calibrated model can
be used to determine the R&D gap that should be expected
given a country's investment in physical and human
capital. If the actual R&D gap is above this expected
gap, then one can say that the country suffers from a true
innovation shortfall. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Maloney, William Rodríguez-Clare, Andrés |
| author_facet |
Maloney, William Rodríguez-Clare, Andrés |
| author_sort |
Maloney, William |
| title |
Innovation Shortfalls |
| title_short |
Innovation Shortfalls |
| title_full |
Innovation Shortfalls |
| title_fullStr |
Innovation Shortfalls |
| title_full_unstemmed |
Innovation Shortfalls |
| title_sort |
innovation shortfalls |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2007/07/7964756/innovation-shortfalls http://hdl.handle.net/10986/7470 |
| _version_ |
1764402102243688448 |