| dc.description |
The biorevolution in the 1970’s greatly stimulated investment in life-science
research. The present dissertation is aimed at evaluating the impact of US public
investment on industrial investment in life-science research. The focus is on three major
life-science fields: biology, medicine, and agriculture. A dynamic model of industrial
R&D investment is developed to identify the channels of influence which public R&D
investment has on industrial R&D investment. The model takes into consideration four
determinants of industrial R&D investment: market demand, technological opportunity,
supply of scientific labor, and adjustment costs. The model is estimated using R&D
expenditures and patent counts constructed at the individual life-science field level.
Results show that, as far as the life sciences are concerned, the R&D performed
by public institutions has been the primary cause of the past two decades’ surge in
industrial R&D investment. Even after accounting for the negative wage effect, public institution
R&D has been strongly complementary to industrial R&D, both in agriculture
and in medicine. Public institutions’ basic biological research has had a significant
“infrastructure” effect on industry’s agricultural and medical research. Although analysts
typically have argued that market demand and technological opportunity are equally
important determinants of the pace and direction of technological change, we find that, in
the life sciences at least, the dominating stimulant to industrial R&D investment has been
technology push, i.e., the creation of new technological opportunities when advances are
made in public institutions’ research. |
|