Macroeconomic conditions and the determinants of commercialisation

In this paper, we focus on the effects of macroeconomic conditions on commercialisation. Using survey data on the activities of Australian inventors who attempted to commercialise 3,736 inventions over the period 1986--2005, we find evidence that macroeconomic conditions have a pro-cyclical effect on commercialisation activities. Such a finding has important policy implications since it suggests that recessions have both short-term effects (on employment, income) and long-term effects (on productivity). However, the magnitude of the supply-side effects--the cost of finance and level of public sector research--are estimated to be larger than the growth in aggregate or industry demand. Copyright The Author 2010. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.