The Atlantic:
Here's one tax break all Americans can support
28 September 2012
The future of the American worker depends on research and innovation.
This matters not just for Apple's profits, but for the future of the American economy. Although patents in theory protect intellectual property, in practice, innovative companies that invest in research appropriate just some of the benefits of their efforts. This is an unavoidable feature of the way innovation is created today and the speed at which new ideas and new knowledge spread in the tech industry. The magnitude of these knowledge spillovers is substantial. In two of the most rigorous studies to date, economists Nick Bloom of Stanford and John Van Reenen of the London School of Economics followed thousands of firms and found that the spillovers were so large that R&D investments of one firm raised not only the stock price of that firm but also the stock price of other firms in the same industry.
Related publications
Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, Diffusion IT and Productivity, Nicholas Bloom, Mirko Draca and John Van Reenen, Centre for Economic Performance Discussion Paper No.1000, January 2011
Identifying Technology Spillovers and Product Market Rivalry, Nicholas Bloom, Mark Schankerman and John Van Reenen, Centre for Economic Performance Discussion Paper No.675, updated September 2010
Related links
Nick Bloom webpage
Mirko Draca webpage
John Van Reenen webpage
Productivity and Innovation Programme webpage