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• Technology policy (lately renamed “innovation policy”)

  • Ensemble of policies set in place by the government to motivate the

    • development,

    • commercialization or

    • adoption of new technologies

    • on the side of private companies

  • Aim: Optimizing the interaction between the various components of the system

  • Those policies are thus intended to solve the market failures leading to underinvestment in R&D

• Science policy

  • Measures introduced by a government to

    • boost the generation of basic scientific knowledge

    • on the side of universities and

    • public research institutes

• Supply-side policies

• Demand-side policies

• Competition policies

• Aim: Promote the creation of new technology

• Public R&D spending in basic research and civilian technologies

• Subsidies for private R&D

• Tax schemes

• Aim: Promote the adoption of new technologies according to a welfare-optimal diffusion path by directly promoting or supporting the user.

• Financial subsidies for adoption of new technologies

• Information-provision programs

• Government procurement

• Technical standards

• Government-mandated technology transfer

• Domestic policy (e.g., Antitrust policies)

• Trade policies,

• Policies against competition (e.g., “national champion” strategies)

  • Rarely produce strong innovative performance

Important to find the right balance between cooperation in technology creation / adaptation vs. strong competition in the application of these technologies

• Improve innovative performance of domestic industries

• Strengthen military power —> End of Cold War —> international competition

  • Domestic technology vs. international trade policies

• Science policies affect firms’ innovation

• Public policies had considerable impact on technological innovation

• Effect of other policies often greater than that of innovation policies

Technological change builds up on a stock of basic scientific knowledge

• Replaced the linear innovation model with more complex models

• Differences in the processes

  • creating scientific and technological knowledge

• Scientific research frequently lags behind technological knowledge

• Takes into account: Technological knowledge is often ‘tacit’

• Enhancing the economic returns from deployment of other, complementary inputs

• Training of scientists and engineers

• Developing new instruments and techniques for research

• University-industry research relationships

• Other research infrastructure programs

• Policies supporting industrial technology development

• Tax and subsidy schemes for industrial R&D support

• Reducing uncertainties concerning the performance of a new device or technology

• Reducing costs of customizing equipment to be connected to other devices

• Facilitating entry into the production of a new technology (thus lowering prices)

• inducing inward technology transfer from foreign sources

• Increase spillovers by coupling with policies supporting exports and investment in human and physical capital

• More important than a specific policy:

  • Development / availability of indigenous managerial and technical talent

• Strong competition among domestic recipients of foreign technologies