What Is The Role of The State in Promoting R&D Invest and Increasing Growth?
Economic Growth refers to an increase in the productive capacity of an economy as a result of which the economy is capable of producing additional quantities of goods and services. Normally our standard of living is measured by the quantity of goods and services available to us so that economic growth is synonymous with an increase in the general standard of living (Palmer, 2012). The growth of a country's economy and the achievement of national development have positive effects in many areas in terms of education, health, happiness and well-being of an individual living in a nation. The environment in which these effects can occur is not an environment where only private enterprises can be described as 'without state' as it is supposed in states that adopt the liberal economy. In an economic enterprise, including liberal economies, government bodies play an active role in all areas of the enterprise. Historical information shows that there are many effects of military oriented products in all technological products produced. In other words, especially the capitalist states have offered the military products what they produced in order to ensure their own security to the public in free market conditions, and private enterprises that have the knowledge of military technology, have marketed the products to the whole world by helping develop and increase their quantities thanks to supports they received from the state. By looking at all these propositions, it is revealed that the role of the state in R&D investments and economic growth will be explored later in this essay. The role of the state, respectively; The incentive for economic growth will be examined in the titles Investment in R&D, Innovation and Economic growth. This ranking is also a chain that causes economic growth and must be followed.
The decline or stagnation of a state's economy in a global competitive environment is a negative result for a state, so a state that wants to protect and increase its social welfare must absolutely keep its economic indicators in a tendency to grow. This requirement shows us that a government should encourage all public and private institutions to contribute to economic growth. This contribution briefly manifests itself by creating employment fields, increasing and accelerating production and consumption, supporting the state, which plays a role in both the producer and consumer scene, with taxes during trade. States often encourage enterprises with opportunities such as tax breaks, flexible loan payments and incentive payments. When these studies of the states are implemented correctly, they have always had a positive effect on the economy. Additionally, while the need of each state for economic growth in the competitive environment is so high, R&D studies, which are the basis of innovation and production, are also of great importance (Goker, 2013). Research and development has been defined by OECD as "systematically continuing creative work to increase knowledge and use of this information to create new applications". With the rapid development of technology, the power of knowledge and experience, not of physical strength, emerges more. For this reason, the competitive environment of today's world forces governments and private institutions to invest in R&D. When the tables below are analyzed, the speed gained by the countries in their R&D studies and the importance they attach to these studies will be better understood.
(Table A)
(Table B)
The various functions of Iphone, one of the profitable products of the American company Apple, are supported by deep knowledge of most military institutions of the USA. The state here not only supports information but also supports private enterprises in risk sharing. Because, R&D studies have a chance to succeed approximately at a rate of 1 in 10 and its cost is high. By looking at this element, we can say that the big enterprises will bring great returns, and the risks will be large, so the private sector may prefer not to take these risks. The state should invest in R&D by sharing risks, and force public - private institutions (including universities) to allocate strong budgets for R&D by developing policies (Öztemel, 2013). Another issue that needs to be addressed depending on the R&D issue is innovation. The Oslo Guide, published jointly by OECD and Eurostat, is among the internationally accepted sources for the definition of innovation. In the 2005 version of the guide currently in force, innovation is defined as follows: “Innovation is a new or significantly modified product (goods or services) or process; a new marketing method; or applying a new organizational method in business practices, workplace organization or foreign affairs. ” Since innovation means sustainable growth, social prosperity and increased job opportunities for a country, creating the environment required for innovation is considered a top priority for states. This requires the establishment of a successfully operating system and the design and implementation of effective policies. Since the system approach in innovation involves both the production and dissemination of knowledge, the focus of the policy is based on the interaction between institutions. 'National innovation system' refers to a dynamic system that defines these institutions and the flow of information, financing and regulation between them. Thus, it will not be wrong to say that an intense R&D incentive and investments will place the innovation culture in the national economy, and this innovative production network will make economic growth sustainable. As a result, government policies play a major role in increasing R&D investments (Baldwin, 1998). One of the policies is the direct financing of scientific and engineering research. Another is R&D tax incentives that allow companies to benefit from lower tax rates on profits made through patents, research, innovation, or other creative activities. Therefore, as countries try to promote economic growth through innovation, they should not compromise investment in research and development, which is fuel for innovation, they should work together with all public-private organizations to create an R&D-centered innovation network (Tinik et al., 2016). All these propositions appear in the global economy as a recipe or a formula for the sustainability of economic growth.
References:
The various functions of Iphone, one of the profitable products of the American company Apple, are supported by deep knowledge of most military institutions of the USA. The state here not only supports information but also supports private enterprises in risk sharing. Because, R&D studies have a chance to succeed approximately at a rate of 1 in 10 and its cost is high. By looking at this element, we can say that the big enterprises will bring great returns, and the risks will be large, so the private sector may prefer not to take these risks. The state should invest in R&D by sharing risks, and force public - private institutions (including universities) to allocate strong budgets for R&D by developing policies (Öztemel, 2013). Another issue that needs to be addressed depending on the R&D issue is innovation. The Oslo Guide, published jointly by OECD and Eurostat, is among the internationally accepted sources for the definition of innovation. In the 2005 version of the guide currently in force, innovation is defined as follows: “Innovation is a new or significantly modified product (goods or services) or process; a new marketing method; or applying a new organizational method in business practices, workplace organization or foreign affairs. ” Since innovation means sustainable growth, social prosperity and increased job opportunities for a country, creating the environment required for innovation is considered a top priority for states. This requires the establishment of a successfully operating system and the design and implementation of effective policies. Since the system approach in innovation involves both the production and dissemination of knowledge, the focus of the policy is based on the interaction between institutions. 'National innovation system' refers to a dynamic system that defines these institutions and the flow of information, financing and regulation between them. Thus, it will not be wrong to say that an intense R&D incentive and investments will place the innovation culture in the national economy, and this innovative production network will make economic growth sustainable. As a result, government policies play a major role in increasing R&D investments (Baldwin, 1998). One of the policies is the direct financing of scientific and engineering research. Another is R&D tax incentives that allow companies to benefit from lower tax rates on profits made through patents, research, innovation, or other creative activities. Therefore, as countries try to promote economic growth through innovation, they should not compromise investment in research and development, which is fuel for innovation, they should work together with all public-private organizations to create an R&D-centered innovation network (Tinik et al., 2016). All these propositions appear in the global economy as a recipe or a formula for the sustainability of economic growth.
References:
- Palmer, N. T. (2012). The importance of economic growth. Retrieved May, 18, 2017
- Baldwin, J. R. (1997). The importance of research and development for innovation in small and large Canadian manufacturing firms. Statistics Canada Analytical Studies Paper, (107).
- Öztemel, E. (2013). Yükseköğretim kurumlarında araştırma ve inovasyon kültürünün oluşturulması. Yükseköğretim Dergisi, 3(1), 22-29.
- Tinik, M., & Akyüz, D. (2016). Türkiye’de girişimcilik kültürü bağlamında arge ve inovasyon yatırımlarının artırılması; eğitim rolünün desteklemesi.
- Göker, A. (2003). Ulusal İnovasyon Sistemi
- https://www.youtube.com/watch?v=3r1IPsldbBg&t=3s
- https://tr.wikipedia.org/wiki/%C4%B0novasyon
- https://tr.wikipedia.org/wiki/Ara%C5%9Ft%C4%B1rma_ve_geli%C5%9Ftirme
- https://www.visualcapitalist.com/money-country-puts-r-d/
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