Quarterly research and innovation literature review: Investing in R&I for the recovery

This is a Quarterly Review of academic literature on research and innovation for the third quarter of 2020. This edition of the review presents recent papers that highlight the multifaceted role, dynamics and policies related to R&I investments in times of crisis, but also in the aftermath of a crisis, as key drivers of prosperity, sustainability and wellbeing.

With R&I investments likely to be affected by the current economic downturn, possibly intensifying financial constraints for companies, the role of public R&I efforts to support an effective recovery is critical and deserves proper attention.

A wide range of instruments can support public interventions on R&I and several papers in this review show interesting insights on those, such as: the effectiveness of both direct funding and R&D tax incentives in increasing business R&D, and the complementarity between these two approaches; the spatial perspective on the relationship between innovation and wellbeing; how social sciences can provide evidence for policy making around the European Green Deal; or the importance to consider R&D in light of education subsidies.

There is also a need to continue improving our understanding of R&I efforts. This implies for instance the decomposition into structural and intrinsic effects of the R&D intensity, a flagship indicator for monitoring EU’s investment effort. We also need to continue strengthening the overall approach to modelling R&I-related issues, in particular through macroeconomic models, based on high-quality data.