Search Results

You are looking at 1 - 10 of 81 items for :

  • "R&D effort" x
Clear All
Ruchir Agarwal and Patrick Gaulé
To examine the drivers of innovation, this paper studies the global R&D effort to fight the deadliest diseases and presents four results. We find: (1) global pharmaceutical R&D activity—measured by clinical trials—typically follows the ‘law of diminishing effort’: i.e. the elasticity of R&D effort with respect to market size is about ½ in the cross-section of diseases; (2) the R&D response to COVID-19 has been a major exception to this law, with the number of COVID-19 trials being 7 to 20 times greater than that implied by its market size; (3) the aggregate short-term elasticity of science and innovation can be very large, as demonstrated by aggregate flow of clinical trials increasing by 38% in 2020, with limited crowding out of trials for non-COVID diseases; and (4) public institutions and government-led incentives were a key driver of the COVID-19 R&D effort—with public research institutions accounting for 70 percent of all COVID-19 clinical trials globally and being 10 percentage points more likely to conduct a COVID-19 trial relative to private firms. Overall, while economists are naturally in favor of market size as a driving force for innovation (i.e.“if the market size is sufficiently large then innovation will happen”), our work suggests that scaling up global innovation may require a broader perspective on the drivers of innovation—including early-stage incentives, non-monetary incentives, and public institutions.
International Monetary Fund

Recent theories of economic growth treat commercially oriented innovation in response to economic incentives as a major engine of technological progress and productivity growth. In this view, innovation feeds on knowledge arising from cumulative research and development (R&D) experience on the one hand, and it contributes to this stock of knowledge on the other. Consequently, an economy’s level of productivity depends on its cumulative R&D effort and on its effective stock of knowledge, with the two being interrelated. In a world with international trade

International Monetary Fund. Research Dept.