Econ 101 informs us that R&D investments spur innovation and productivity growth, which in turn lower production costs and create newer products, boost consumption, drive further investments, job creation and economic growth.
Doesn't the fact that companies just re-label more of the business expenses as part of "R&D" to get tax breaks show the failure of government intervention to boost R&D in the first place?
Also if you use targeted subsidies for small businesses to engage in R&D why wouldn't you expect them to do the same thing? In fact policing thousands of small diverse and novel businesses will be even harder than policing the accounting fraud of big incumbent firms.
Additionally from an industrial policy standpoint, if you're an American, you might want to keep the industry somewhat closed since opening up to competition might make it so that new FOREIGN firms might come in to take a leading market position. If America had opened up competition in the EV market enabling Chinese and/or Indian manufacturers to come in and beat Tesla, you pro industrial policy people would have demoaned the failure of liberalism and the need for industrial policy.
Doesn't the fact that companies just re-label more of the business expenses as part of "R&D" to get tax breaks show the failure of government intervention to boost R&D in the first place?
Also if you use targeted subsidies for small businesses to engage in R&D why wouldn't you expect them to do the same thing? In fact policing thousands of small diverse and novel businesses will be even harder than policing the accounting fraud of big incumbent firms.
Additionally from an industrial policy standpoint, if you're an American, you might want to keep the industry somewhat closed since opening up to competition might make it so that new FOREIGN firms might come in to take a leading market position. If America had opened up competition in the EV market enabling Chinese and/or Indian manufacturers to come in and beat Tesla, you pro industrial policy people would have demoaned the failure of liberalism and the need for industrial policy.