Want Sustainable Productivity? Incentivize Investments in Innovation

Abstract

Research and development (R&D) and innovations derived from R&D have been argued to be the engine of economic growth for hundreds of years. With supporting data, the paper establishes the vital role of innovation in the value chain and sustainable growth of economies. In order to convert these strategies into the tangible outcome, we need right tools, skills, and funding. Tools are provided by research methodologies underpinned by the application of project management principles. Skills come from higher education and training in science, engineering, and technology. The sources of funding are mainly from the governments and private industries where the latter provides the major share. To generate additional funding, the author argues that governments should offer a tax break to multinational companies for additional investment in R&D above the threshold of R&D intensity. For the ‘post- Brexit’ United Kingdom a new R&D strategy is of particular importance when the supply of the EU research money will discontinue.