Innovation Policy, Entrepreneurship, and Development: A Finnish View
O. Toivanen
#2009-050
This article first reviews the economic rationales for innovation
policy. It then describes the Finnish innovation policy and policy
making environment. The Finnish policy is evaluated from the point of
view of fostering entrepreneurship. R&D subsidies, the main tool of
Finnish innovation policy, may not be a very effective way of fostering
entrepreneurship, compared to R&D tax credits of the type used in the
Netherlands and Norway. The main reason for this is that the latter
provide support in a more transparent way. The article ends with a
discussion of what lessons the Finnish innovation policy offers to
developing countries.
Keywords: innovation policy, R&D subsidies, R&D tax credit, developing
countries, interim efficiency, market failure
JEL classification: L53, O25, O28
UNU-MERIT Working Papers
ISSN 1871-9872