13.2 How Governments Can Encourage Innovation

Innovation drives economic growth, and governments play a crucial role in fostering it. Through intellectual property rights, they protect inventors' creations, encouraging them to invest time and resources into developing new ideas. This protection allows innovators to profit from their work, spurring further advancements.

Government policies also directly support innovation through research funding and tax incentives. By investing in R&D and education, governments cultivate a skilled workforce and cutting-edge technologies. Public-private partnerships further boost innovation by combining resources and expertise from different sectors, accelerating progress in various fields.

Government Policies and Innovation

Intellectual Property Rights

Top images from around the web for Intellectual Property Rights

• 

  Intellectual Property – Mastering Strategic Management – 1st Canadian Edition View original

  Is this image relevant?

• 

  legal writing: Types of Intellectual Property View original

  Is this image relevant?

• 

  Upload Login Signup View original

  Is this image relevant?

• 

  Intellectual Property – Mastering Strategic Management – 1st Canadian Edition View original

  Is this image relevant?

• 

  legal writing: Types of Intellectual Property View original

  Is this image relevant?

1 of 3

Top images from around the web for Intellectual Property Rights

• 

  Intellectual Property – Mastering Strategic Management – 1st Canadian Edition View original

  Is this image relevant?

• 

  legal writing: Types of Intellectual Property View original

  Is this image relevant?

• 

  Upload Login Signup View original

  Is this image relevant?

• 

  Intellectual Property – Mastering Strategic Management – 1st Canadian Edition View original

  Is this image relevant?

• 

  legal writing: Types of Intellectual Property View original

  Is this image relevant?

1 of 3

• Patents protect inventions granting inventors exclusive rights to make, use, or sell their inventions for a set period
• Copyrights protect original works (books, music, software) giving creators exclusive rights to their creations
• Intellectual property rights incentivize innovation by allowing inventors and creators to profit from their work without competitors easily copying and selling their inventions or creations
• Intellectual property rights encourage disclosure of new knowledge as inventors must describe their inventions in patent applications enabling others to build upon existing knowledge and create further innovations

Government Research and Development Policies

• Direct government funding for research and development through grants from agencies (National Science Foundation, National Institutes of Health) and research conducted in government labs (National Institute of Standards and Technology)
• Tax incentives for private sector R&D including the Research and Experimentation tax credit allowing companies to deduct a portion of R&D expenses from their tax liability and accelerated depreciation for R&D equipment encouraging investment in R&D
• Support for education and training in science, technology, engineering, and mathematics (STEM) through government funding for STEM education programs at all levels (primary school to graduate school) and scholarships and fellowships for students pursuing STEM degrees

Public-Private Research Cooperation

• Public-private partnerships involve collaboration between government agencies and private companies to conduct research and develop new technologies sharing resources, expertise, and risk (Partnership for a New Generation of Vehicles between U.S. government and major automakers to develop fuel-efficient vehicles)
• Cooperative research and development agreements are formal agreements between government labs and private companies to work together on R&D projects with private companies accessing government facilities, equipment, and expertise in exchange for providing funding and resources and sharing the resulting intellectual property
• University-industry collaborations involve partnerships between academic institutions providing expertise and facilities and private companies providing funding and market knowledge to conduct research, develop new technologies, and commercialize university research creating new products and services