This book explores the impact of public R&D funding on the economic performance of Finnish firms, especially in terms of productivity growth and job creation. Special attention is thereby paid to the potential influence exerted by two crucial characteristics of firms – their size and their sector of activity. The emphasis is on unravelling the economic effects of the public support handled by the National Technology Agency (Tekes), which is the main channel for distributing government R&D loans and direct subsidies to the business enterprise sector.
The analyses reported here use both descriptive and econometric tools, and produce a multitude of results with respect to R&D efforts as well as other determinants of firms’ productivity and employment capacity. In brief the results point to only weak, if any, direct productivity- and employment-enhancing effects of public R&D support. The influence mediated through the innovative creativity of the firms’ industrial environment, in contrast, turns out to be of crucial importance, indicating that public R&D policies and government interventions evidently have an indirect effect at least.