U.s. R And D Industrial Policy

1993 Words8 Pages
U.S. R&D Industrial Policy While the United States touts free market policies as main guiding principles, U.S. policy makers have actively used research and development (R&D) industrial policies to maintain and grow the U.S. economy. There are two types of R&D, also known as research and experimentation (R&E), funding models; one is direct federal research dollars given to industry, typically for basic research, and the other in the use of tax credits for R&D activities. Tax credit policies began in 1981 as part of the Economic Recovery Tax Act (Talley, 2011). The U.S. has long funded R&D, however this funding has steadily decreased with the total in 1976 of just over 1.2% of GDP with dropping below .8% of GDP in 2014 (AAAS, 2014a). As of 2013, South Korea, Finland, Japan, Taiwan, and Germany all outspend the U.S. on direct R&D funding relative to GDP (AAAS, 2014b). The IMF and OECD indicate that R&D tax credits are a main growth strategy for the G-20 nations (IMF, 2014). This research topics explores how the United States domestic industrial policies supporting research and development influence business and entrepreneurial behaviors within the U.S., which industries has this benefited the most, overall societal impacts of advancements in technology and automation, and finally how this supports comparative advantage for the United States as well as implications for developing nations. The U.S. Congress has funded the R&D tax credit on a continual
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