Page 41 - IDEA Study 8 2017 Direct subsidies and R&D output in firms

Discussion and conclusion The study provides first insights into the efficiency of the direct R&D subsidy programmes IMPULS, TIP and ALFA in accelerating R&D output of business enterprises measured by applications for IP protection. The results of a propensity score matching analysis, based on firm-level data, indicate that the programmes had strong additionality effects on Czech IP protection. However, the results are inconclusive for effects on international IP protection. It appears that these R&D subsidies motivated firms to use Czech IP protection instruments more frequently, possibly to fulfil the formal project output requirements in the evaluation framework, but did not stimulate the production of inventions at the global technological frontier that were sufficiently novel to warrant IP protection abroad. Judging from this evidence, the success of the subsidy programmes was partial. On the one hand, participating in the subsidized projects pushed firms to protect with the help of the Czech IP instruments technologies that would not have been protected by formal means otherwise; thus, at the very least the firms learned how to do that. On the other hand, the programmes were justified on the grounds that they would promote competitiveness and growth of firms. The Czech market is quite small, with limited room for scaling up. Hence, to achieve these goals the programmes needed to stimulate new technology that could make a difference in foreign markets. Czech IP protection is arguably of little help in making a breakthrough abroad. In this respect, the results indicate that the programmes fell short of expectations. If the subsidy programmes are serious about supporting the generation of state-of- the-art technology, which can boost international competitiveness, then only instruments of international IP protection, recognized in major foreign markets, should be acknowledged as eligible project results; Czech IP protection should not be considered sufficient. At the very least, programme providers should emphasise that the ambition to generate technology that is worth international IP protection is a desirable project output. Furthermore, since there is a substantial delay between submitting an application for IP protection to the major foreign patent offices, such as the USPTO, JPO and EPO, and the protection being granted, it would also help if the period for reporting results was extended long beyond the duration of the subsidized project itself, so that firms do not shy away from proposing truly novel and 39