Public research – effects on innovation and economic growth

The report builds on results from a number of international analyses which gives an overview of the types of contributions from publicly funded R&D to economic growth.

The following and other results are presented in the report:

• The estimated yearly benefit to the Danish Economy from public investments in R&D is estimated at 20-40 percent. This is, a DKK 1 billion R&D-investment results in growth in the Danish economy measured as gross domestic product (GDP) of DKK 1.2-1.4 billion. However, it must be mentioned that the causalities behind these estimates are difficult to assess.
• The relation between publicly funded R&D and education is a key issue in this context. Many studies of the economic benefits of publicly funded research identify skilled graduates as the primary benefit that flows to firms. Moreover, results from analyses indicate that employees in the private sector with a higher level of education contribute twice as much to the Danish economy than with a lower level of education.
• Engineering, natural sciences and health sciences seem to make the most obvious types of contributions. Contributions such as publication activity and citations where Danish R&D is ranked 3rd and 4th among other OECD-countries in the period 2006-2010 when it comes to number of citations per publication and the number of publications per inhabitant. 
• A high level of R&D investment and a high standard of living seem to be correlated across countries. The annual Danish total investment in R&D is about DKK 50 billion corresponding to 3 percent of the gross domestic product (GDP) of which the public funding is about 1 percent. Thus Denmark is one of the few European countries that has met the European Barcelona objective to raise overall R&D investment to 3 pct. of GDP in 2010. 
• The time elapsed from when research results are discovered and translated into industrial commercialization is estimated to vary between 6 and 20 years, depending on the research field. The period seems to have shortened over time, so that for each 10 years an acceleration of 4 years occurs. So, a period of around 120 years went by before steam ship technology had a break through, a period around 60 years for electricity, and only 15 years when it comes to mobile phones and personal computers.

The report is based on three underlying reports which can be found via the links below. The first underlying report is authored by PhD Rikke Nørding Christensen, Professor Svend Erik Hougaard Jensen, CBS, Professor Keld Laursen, CBS and Professor Michael S Dahl, AAU and contains a review of Danish and international literature about the economic growth effects from publicly financed R&D.

The second underlying report is authored by PhD Rikke Nørding Christensen and Professor Svend Erik Hougaard Jensen, CBS, and contains an analysis of the types of contributions from publicly financed R&D to the Danish economy from different research fields. The third underlying report is made by Senior Analyst Johan Moritz Kuhn and Senior Analyst Martin Junge, CEBR, and contains analyses of the PhD-employment, wage level and productivity in Danish firms.