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finance the same amount (for instance in the Netherlands the government finances 5.2 pct. in the
business sector whereas the business sector finances 21.6 pct. in the government sector) one has
to be careful when studying data.

Figure 4a - Percentage of R&D performed in the

business enterprise sector financed by government

Figure 4b. Percentage of R&D performed in the

goverment sector financed by industry

0

2

4

6

8

10

12

14

16

GRCIREDKFI NNLDAUTBELSWDEUEU 1FRAUKESPITAUSA

0

2

4

6

8

10

12

14

16

Per cent Per cent

0

2

4

6

8

10

12

14

16

18

20

22

GRCDEUAUT*ITAPRTFRAEU 1 5ESPDKIREBELUKFI NNLDUSA

0

2

4

6

8

10

12

14

16

18

20

22

Per cent Per cent

Notes: Data is BERD.

Source: OECD STI 2003.

Notes: Data is GOVERD. *) 1998 numbers. USA data not

available.

Source: OECD STI 2003.

7. Public sector efforts regarding R&D: rationale and empirical figures

While public spending on R&D and further education in EU, exceeds US levels there remains a
strong case for maintaining and in some cases increasing spending, though after careful
evaluation of costs and benefits. One issue in this respect is that marginal tax rates are already
high in some parts of Europe and in aggregate well above US levels: the higher level of initial
tax distortions imply that any marginal increase of any sort of public spending requires a larger
return to be economically viable.