The projects that are supported by the government have probably spent some time applying for
the funds. Furthermore, after receiving the funds the money have to be administered.
Opportunity spillovers of additional R&D workers
Additional R&D labour brings additional opportunity costs, since some of the workers who turn
to a R&D job are likely to have generated spillovers in their previous job too. These spillovers
are assumed to lie between 5-15 pct. of the social benefits.
Internal rate of return
The internal rate of return to the investments is the rate of time preference when social costs
equal social benefits.
Appendix 2: Regarding the structural reforms, cf. box 4
Austria 2001. Several initiatives to attract foreign ICT experts have been adopted.- Research bonus for research expenditures was raised from 3% to 5%.
Different research promotion funds.
Belgium 2002. Reduction of personal tax on scientific researchers' income. - As of Oct 2003, employers (universities, high schools and national
scientific research funds) will be exempted from depositing half of the payroll
tax relating to the incomes of researchers.
Czech Republic 2003. Approval of the National Research Plan providing for the concentration of
available human resources and funding on the priority areas of research.
Denmark 2001. A number of research centres have been set up. Establishment of a
Ministry of Science, Technology and Innovation. - Introduction of a green card to make it easier for businesses to obtain
work permits for foreign nationals. Tax credit scheme to enhance collaboration
between businesses and public-sector research institutions. Strengthening the
university managements. - Action Plan for enhanced interaction between public sector research and
education institutions.
Estonia 2003. Program to support long-term cooperation between enterprises and
research institutions.
France 2002. Four research and technological innovation network have been set up
specifically for the life sciences. - Finance Act allows R&D investment to be exempted from the basis of
assessment for trade income tax.
Germany 2001. Work is done to attract foreign IT specialists. Several initiatives to
promote research. - Different initiatives to enhance the education sector. Programs to foster
research cooperation. - Measures to ease the economic use of inventions. Venture capital
initiatives for high tech start-ups. Initiative with the social partners “Partner for
Innovation”. Masterplan “Information society Germany 2006”.
Envisaged 2005. Extension of venture capital fonds; initiatives to foster public
private partnership, promotion of Spin-offs from universities and extension of
top university research.
Greece 2001. Establishment of a Special Secretariat for the Knowledge-based society. - A law to giving R&D expenditures favourable tax treatment (50% R&D
tax credit).
Hungary 2003. A government fund generated from mandatory contributions from
businesses is proposed to be set up in 2004.
Ireland 2001. Industrial Designs Act - protection of industrial designs.