Stimulating technological innovation through incentives: Perceptions of Australian and Brazilian firms

Abstract

Innovation has been the main driver of economic growth as it plays an increasingly central role in firm performance. Incentivising innovation by governments is essential to stimulate investment by companies, covering part of their R&D costs, and minimising their financial risks. There is, however, limited understanding of how innovation incentives are perceived by the companies. This paper examines the perceptions of technology firms, and the views of key actors about public incentive schemes for innovation in Australia and Brazil. The study finds that: (a) Direct incentives are perceived as critical for increasing innovation capabilities of firms; (b) Where tax incentive and infrastructure development schemes are the most preferred incentive programs among the firms; (c) However, despite the former two findings, effectiveness of existing incentive programs has been marginal in fostering innovation significantly in the studied countries. These findings imply that Australian and Brazilian governments should further focus on the design, promotion, and delivery methods of the innovation support mechanisms.