Advance press release about VATT Day: Economists respond – how should RDI funding be allocated?
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Finland is determined to invest in RDI – research, development and innovation – even in difficult economic times. What would be the most effective way to spend the growing RDI investments? This question will be answered by a number of economists from Finland and abroad at VATT Day on Thursday 19 September 2024.
Finland's aim is to increase R&D spending to 4% of GDP by 2030. To reach this target, public funding for RDI will increase by around EUR 1.7 billion between 2024 and 2030. In addition to an increase in public funding, reaching the 4% target will require a significant increase in R&D investments by the private sector. The successful targeting of funding is key to achieving this leverage effect.
Growing public RDI spending is also the subject of the annual VATT economic seminar day. The event will take place in Helsinki on 19 September.
"At VATT Day, together with colleagues we will look at Finnish RDI policy from several different perspectives. The effectiveness and targeting of RDI funding will be examined both empirically and using economic models. One key question is how should business subsidies be allocated in a small open economy like Finland? What would be the appropriate level of subsidies? And what is the role of education and patent rights in terms of growth?" asks Elias Einiö, Chief Researcher and Research Supervisor at VATT.
The star guest at VATT Day will be the renowned and award-winning international economist Ufuk Akcigit, Professor of Economics at the University of Chicago. At the event, he will give the much anticipated keynote speech on growth policies.
Akcigit has developed an important growth model, which has been used to assess US innovation policies. Einiö and his colleagues have developed and extended the model for the Finnish economy.
“We pay particular attention to the dependence of a small open economy like Finland on international trade and foreign technology. We are using the model to assess the impacts of different types of business subsidies and taxes on innovation, growth and welfare. We also examine how Finland should best respond to changes in foreign policies, such as increased US industrial subsidies,” says Einiö.
In addition to Ufuk Akcigit, VATT Day will also feature Professor Otto Toivonen (Aalto University) and Senior Researcher Tanja Saxell (VATT), among others. See the full programme for VATT Day at the VATT website. The seminar will not be streamed. You can find the VATT Day research and presentation materials from VATT website.
Research on the theme of RDI
Elias Einiö
The importance of the socio-economic background of innovators for the direction innovation and growth:
Elias Einiö, Josh Feng and Xavier Jaravel (2023). Social Push and the Direction of Innovation. VATT Working Papers 160.
Description: Most innovators are men from privileged backgrounds. This skews technological development, as we show that innovators on average serve consumers similar to themselves. Women's contribution to and benefit from new inventions is less than men's. The male dominance of innovation weakens the economic position of women because they benefit less from innovation than men do. It leads to inequalities in welfare and slows economic growth. (Press release, in Finnish)
The impacts of business subsidies and taxes on innovation and growth:
Elias Einiö, William Kerr, Heli Koski, Tero Kuusi and Markku Lehmus (2024). Innovation and Reallocation in an Open Economy, unpublished manuscript.
Elias Einiö, Heli Koski, Tero Kuusi and Markku Lehmus (2022). Publications of the Government´s analysis, assessment and research activities. Prime Minister's Office
Description: We develop and extend the aggregate growth model by Acemoglu, Akcigit et al. (2018) to incorporate key features of a small open economy like Finland. The model is estimated using Finnish micro-data. We use the model to examine the impacts of business subsidies and taxes on growth and welfare in Finland. (Press release)
Tanja Saxell
Patent rights in the pharmaceutical industry:
Olena Izhak, Tanja Saxell and Tuomas Takalo (2020). Optimal Patent Policy for Pharmaceutical Industry. VATT Working Papers 131.
Description: In the pharmaceutical industry, the duration of patent protection holds great significance. In Finland, patent duration is typically 20 years and can be extended by up to 5.5 years under certain conditions. It would be more effective to grant shorter but stronger patents than currently. On the other hand, longer patent terms are an inefficient way of promoting the development of new drugs since they also increase generic firms’ incentives for challenging new drug patents.
Further information about research:
Elias Einiö, Chief Researcher, Research Supervisor
[email protected], +358 295 519 408
Tanja Saxell, Senior Researcher
[email protected], +358 295 519 460
Interview requests and event information:
Anne Moilanen, Communications Director (acting)
[email protected], +358 50 5020155
Elias Einiö
Tanja Saxell
Press release
Uutiset ja tiedotteet
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