Local R&D Support versus Global Valorization

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Globalization > Best Practices > Local R&D Support versus Global Valorization

Local R&D Support versus Global Valorization
Regions support local companies to do R&D and innovate (with subsidies, tax reduction) hoping that this will have a positive return for the region (more employment, new investments). But more and more companies develop products in one region and produce them in another region. So the benefits from R&D support go to another region than the one made the investments. Q: Why should local governments still invest in local R&D, if other regions get the benefits? (...) Read more? Sign up for free

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  Why Should Governments Subsidize Local R&D?
edward sevume, Sweden
  There is an advantage of locally investing even when production is done in another country! By doing this, the country can attract companies willing to do R&D due the availability of trained manpower who are able to research into new areas of application or new products.
Production is outsourced as it would be cheaper as this lessens the impacts of research on the final costs of the product. By encouraging R&D, countries are able to continue competing in the upper region of high value jobs which are retained in the country.
Besides, countries have different relative advantages in different fields which gives one country an edge in one field while having a disadvantage in another.

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