Study: government subsidies for private R&D may miss their mark

Paper suggests public financing does not increase private R&D investment when it is needed most

Direct government funding of private sector R&D does not necessarily increase the amount that companies spend on research activities, according to a study of British businesses.

Governments may seek to encourage more business R&D through indirect incentives, such as tax credits, or by direct subsidies in areas where market forces discourage firms from investing.