Current TUM Study Emphasizes Targeted Research Grant Policies

Would research outcomes benefit if public policy for research grants distinguished between research, development and mixed R&D projects? An affirmative answer is provided by a current TUM study published by Prof. Dr. Hanna Hottenrott of the Chair of Economics of Innovation together with Cindy Lopes-Bento and Reinhilde Veugelers.

Under the title “Direct and cross scheme effects in research and development”, the study conducts a direct comparison between a variety of grant schemes, including mixed financing of research together with R&D next to pure-play research and R&D projects. Currently, most grant distribution by the federal government does not apply these kinds of distinctions.

But as results strongly suggest, targeted schemes are more effective, especially since research projects tend to be further removed from market applications and do not yield immediately actionable results found in R&D initiatives. An important takeaway of the study consists of the finding that research projects not only depend on grant budgets for better outcomes, but also tend to yield much higher ROI than R&D initiatives. In closing, the study suggests that public institutions would be well advised to prioritize pure-play research projects in their grant policies.

Watch the video interview with Prof. Dr. Hanna Hottenrott on the results and background of the study. The full English version of the study is available here.