Page 4 - IDEA Study 8 2017 Direct subsidies and R&D output in firms

for scaling up. Hence, the success of the programmes should be judged on whether they stimulated the generation of new knowledge at the global technological frontier, which can make a difference in major foreign markets and which in turn is of far higher economic value. Czech IP protection is arguably of little help in making a breakthrough abroad. Judging from this evidence, at least in this respect the programmes have fallen short of expectations. ● It well might be, furthermore, that a number of the programme participants applied for Czech IP protection instruments primarily in order to fulfil the formal requirements of the project evaluation framework. If the subsidy programmes are serious about supporting state-of-the- art technology, they should acknowledge as eligible only results that obtain internationally recognized IP protection. It would also help if the period for reporting project results was extended long beyond the duration of the subsidized project itself, so that firms do not shy away from proposing truly novel and bold research plans due to a fear of not obtaining the grant of a patent in time. ● The main limitation of this study is that it considers only one type of R&D output. Applications for IP protection are no doubt relevant, especially in some industries, and have the major analytical advantages that they are based on external review criteria and that harmonized data for both the subsidy recipients and the control group is readily available. Nevertheless, other R&D outputs are equally if not more relevant, such as non-patented inventions, new products introduced to the market and process innovations implemented in practice. Even more importantly, we ought to consider the subsidy programmes' wider impacts on employment and productivity. Addressing these impacts remains a major challenge for follow-up studies. 2