The economic benefits of publicly funded basic research: a critical review

By Ammon J. Salter, Ben R. Martin. 2001

1,405 citations recorded by the source corpus.

This article critically reviews the literature on the economic benefits of publicly funded basic research. In that literature, three main methodological approaches have been adopted — econometric studies, surveys and case studies. Econometric studies are subject to certain methodological limitations but they suggest that the economic benefits are very substantial. These studies have also highlighted the importance of spillovers and the existence of localisation effects in research. From the literature based on surveys and on case studies, it is clear that the benefits from public investment in basic research can take a variety of forms. We classify these into six main categories, reviewing the evidence on the nature and extent of each type. The relative importance of these different forms of benefit apparently varies with scientific field, technology and industrial sector. Consequently, no simple model of the economic benefits from basic research is possible. We reconsider the rationale for government funding of basic research, arguing that the traditional ‘market failure’ justification needs to be extended to take account of these different forms of benefit from basic research. The article concludes by identifying some of the policy implications that follow from this review.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/bcf32819f808c550af91d9a2ac197de950b3855f

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Citations in the corpus

Faculty support for the objectives of university–industry relations versus degree of R&D cooperation: The importance of regional absorptive capacity (2006, background): “…creating new scientific instrumentation and methodology, forming networks and social interaction, increasing the capacity for scientific and technological problem-solving, creating new firms (Salter and Martin, 2001), providing social knowledge and access to unique facilities (Scott et al., 2002).”
The process of transformation of scientific and technological knowledge into economic value conducted by biotechnology spin-offs (2005, background): “The contribution of academic research to technological development in the industrial sector has been the subject of extensive research (e.g. David et al., 1992; Faulkner and Senker, 1994; Gibbons and Johnston, 1974; Pavitt, 1991; Salter and Martin, 2001).”
Inbound open innovation for enhanced performance: Enablers and opportunities (2013, background): “Whatever form they take, network spillovers play a crucial role in the evolution of technology, because they augment access to knowledge (Salter & Martin, 2001).”
Industry Funding of University Research and Scientific Productivity (2011, neutral): “In particular, university research provides knowledge inputs to privatesector innovation (Jaffe 1989; Salter and Martin 2001 for a review).”
Engaging the scholar: Three types of academic consulting and their impact on universities and industry (2008, background): “In thematic terms, the activity requested by clients does not constitute research but the application of scientific knowledge to a specific problem (Salter and Martin, 2001).”
The spatial profile of university-business research partnerships (2010, background): “…factors – most of them embedded in the industrial and scientific structure of regional systems – underlie the relevance of geographical proximity and the actual potential for localised knowledge spillovers (see also Salter and Martin, 2001; Laursen and Salter, 2004;Laursen et al., 2008).”
The nexus between science and industry: evidence from faculty inventions (2012, background): “There are various contributions of public science including the enhancement of the knowledge stock and problem solving capacities in the economy, the education of skilled graduates, the creation of new scientific methods and instruments, and new firm formation ( Salter and Martin 2001; Foray and Li”
Micro- and Macro-Dynamics of Open Innovation with a Quadruple-Helix Model (2019, background): “Typical knowledge transfer channels include publication, conferences and meetings, contract research, co‐ supervising PhD students, consulting, and collaborative research [38].”
International Scientist Mobility and the Locus of Knowledge and Technology Transfer (2011, background): “It has almost become conventional wisdom that knowledge originating from universities and public research centres is a crucial constituent of technological change and economic growth (e.g., Jaffe, 1989; Adams, 1990; Mansfield, 1991; Salter and Martin, 2001).”
How should firms evaluate success in university-industry alliances? A performance measurement system (2011, neutral): “Many innovations result from scientific advances that initially appear to have little commercial application (Salter and Martin, 2001).”
The Economic Development Impacts of Universities on Regions: Do Size and Distance Matter? (2006, background): “The primary methodological approaches to investigating the impacts of universities on regional economic development that are observed in the literature are case studies, surveys, econometric analyses, and cross-sectional and quasi-experimental designs (Salter & Martin, 2001).”