University research has a positive impact on business investment in R&D, but government funding can be a disincentive and “crowd out” private investment, according to a federal agency report.
A study published by the Office of the Chief Economist in Canberra has analysed how an individual company’s expenditure on R&D is influenced by the research activities of other businesses and research institutions.
It found that while industrial clusters tended to increase R&D activity, they did not necessarily lead to higher research investment by the companies located in these “hubs”.