Public research, innovation and R&D performance; Science funding restrictions and corporate R&D

Abstract

Corporate and public R&D investments in fields such as RNA interference, gene therapy, and regenerative medicine where publicly funded science drives advances in product development are often complementary. Accordingly, we expect changes in the public funding outlook for a scientific field to affect resource commitments (often irreversible) to that field by corporate actors involved in the initiation and development of R&D projects. Analysing our dataset on 570 commercial product development projects in the global cell therapy sector that were initiated over the period 1997-2011, we find decreased R&D project initiation rates and higher failure rates for US firms in the aftermath of the announcement in 2001 of a federal funding moratorium on specific types of human embryotic stem cell research. We highlight how this effect was reversed as the US public funding outlook for stem cell research improved at state- and federal- levels during subsequent periods.