Research, innovation and economic growth : knowledge production function and R&D investment

The Directorate General for Research and Innovation of the European Commission commissioned Deloitte and RAND Europe to undertake a study with the aim to better understand the impact of public policy on innovation. In particular, the objective of the study is twofold: enhance the evidence base around the impact of public policy on research and innovation; explore possible modifications in QUEST III to evaluate a number of innovation policies and reforms. This report focuses on the update of the parameters of the knowledge production function in QUEST III using more up-to-date data and a broader set of countries. Furthermore, the current specification of the knowledge production function is extended by differentiating between public and private R&D.