Science, Funding and Economic Growth : Analysis and Science Policy Implications

This paper analyses the relationship between economic growth and funding for research. The econometric analysis show that Gross domestic Expenditure on R&D (GERD) as percentage of Gross Domestic Product (GDP) is a important driver of economic growth (R2 adj = 71%) that is measured by GDP per capita. The optimisation shows that the level of GERD equal to 2.6 maximises the GDP per capita, moreover is important to have global maximum that GERD financed by government is lesser than 30% of total. The paper also discusses Lisbon Strategy and research policy of the USA, Japan and EU countries