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The paper discusses the effects of the corporate tax on local R&D expenditures by multinational enterprises (MNEs) when income from intellectual property (IP) may or may not benefit from a special IP regime. Our model shows that an increase of the standard corporate tax may have positive effects on the R&D expenditures in the country that carries out the corporate tax increase. The possible positive R&D effect results from a tax asymmetry: not all R&D returns are subject to the higher tax. First, since R&D creates a public good within the MNE, some of the R&D benefit is taxed at other countries’ tax rates that are not subject to the tax increase. Second, some of the R&D benefits are taxed at a lower IP regime tax rate. Therefore, a higher corporate tax, which increases value of the cost deductibility of R&D, may actually foster R&D. This expectation is empirically supported by country-by-country R&D data of U.S.-owned subsidiaries for countries that have an IP regime.

Many policy makers regard Technology Transfer Offices as a vehicle for Intellectual Property regimes and a main driver for research commercialisation. The involvement of scientists in the process of research commercialisation is often taken for granted. National regulations can determine the IP regimes at universities and their decisions about the ownership of scientific research results. This paper describes the relationships between four university IP regimes and identifies three driving forces, which motivate individual scientists to engage with the commercialisation of their own research, and the real involvement of scientists with research commercialisation. A representative survey of approximately 2,660 scientists working in all disciplines at some 150 universities in 30 European countries, covering a time frame from 2010 till 2015, shows that around 32% of the scientists are engaged in various pathways of research commercialisation. We found significantly higher percentages of scientists who are involved in research commercialisation at universities that hold IP ownership on research results and that have obligatory Technology Transfer Office services. The individual driving forces are positively associated with significantly higher levels of engagement with research commercialisation, double the amount of patenting and a threefold higher involvement with spin-off companies. Involvement with a spin-off formation was only positively correlated with scientists-related driving forces, not with the intellectual property regime of the university where they work. We conclude that the driving forces of scientists and university IP regimes are both factors that can contribute to increased levels of research commercialisation. Our data suggest that the former factor is by far the more important.

Inclusive innovation seeks to expand access to essential goods and services, thereby improving quality of life, and enhancing economic empowerment through knowledge creation, acquisition, adaption, absorption, and deployment efforts targeted directly at the needs of excluded populations. Inclusive innovation is of high relevance for the Chinese authorities, but the concept is new to the Chinese government from both conceptual and policy perspective. So far China has emphasized frontier innovation, yet has recognized the importance of inclusive innovation in addressing increasing disparity between the rich and poor. In China many efforts are being made in the domain of inclusive innovation, but there is no clear strategy and implementation plan. This report aims to help build awareness and set the stage for the potential implementation and operationalization of inclusive innovation policy in China and possibly in other countries. This report is presented in four Chapters and an Executive Summary. Chapter I presents the concept of inclusive innovation and why it is relevant for China. Chapter II discusses the current landscape for inclusive innovation in China. Chapter III presents international experience and examples. Chapter IV outlines some policy options for consideration by the Chinese authorities.

Innovation is the main driver of long-term economic growth. The accumulation of capital, whether in the form of physical assets such as plants and equipment, or through better human capital, cannot indefinitely sustain growth unless new products, services, processes, and/or business models are developed and implemented. This paper describes the actors involved and the types of funding available at different stages of the innovation process, the rationales for public intervention, and the advantages and disadvantages of some of the most commonly used policy instruments. Innovation activities are more difficult to finance than other types of investment for several reasons. Innovation produces an intangible asset that does not typically constitute accepted collateral to obtain external funding. Also, the technological and market uncertainty of innovation activities makes the returns to investment highly uncertain, creating significant problems for the standard risk adjustment methods used by providers of funds. This paper uses a streamlined version of an innovation process with three stages to categorize the different sources of finance available; in reality, considerable crossover takes places among instruments because innovation processes are not discrete.