This paper reviews the empirical literature on rates of return on R&D and interprets the economic significance of these estimates using a semi-endogenous growth model with a calibrated knowledge production sector. We analyse how R&D subsidies, a reduction of entry barriers for start-ups and...

While the development of new knowledge is becoming increasingly important in the emerging knowledge-based economy, the impact of technology on growth, jobs and welfare is determined largely by the way in which technology is diffused, absorbed and used throughout the economy. For technological...