R & D and Innovation: Drivers of Productivity Growth

Posted: 4 Nov 2009

See all articles by Hugo Erken

Hugo Erken

Government of the Netherlands - Ministry of Economic Affairs

Luuk Klomp

Erasmus Research Institute of Management (ERIM)

Piet Donselaar

affiliation not provided to SSRN

Date Written: 2004

Abstract

Labor productivity growth in the Netherlands in terms of R&D and innovation is discussed. Two components used to describe productivity growth are total factor productivity (TFP) and the contribution of capital deepening. Technological change and innovation are thought to be the main drivers of TFP growth.Evidence has shown that R&D/innovation is one of the main forces behind productivity growth at the macro (economic productivity), meso (spillover effects), and micro (business performance) levels. Closely related determinants of growth are information and communication technologies, human capital, and entrepreneurship. Data from two empirical studies at the macro level were used to calculate the contribution to productivity growth. Results show that the combination of public and private R&D as well as foreign R&D spillovers could make structural contributions to TFP growth 1.5 times higher than the average annual rate. Actual contributions of innovation to TFP growth measured in the Netherlands in the 1990s take into account real wage costs, economic growth, and R&D intensity. Raising R&D expenditure in the Netherlands may lead to a substantial increase in labor productivity. (LKB)

Keywords: Total factor productivity, Innovations, Firm performance, Firm productivity, Firm growth, Human capital, R&D, Knowledge spillovers, Technological change

Suggested Citation

Erken, Hugo and Klomp, Luuk and Donselaar, Piet, R & D and Innovation: Drivers of Productivity Growth (2004). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1497273

Hugo Erken (Contact Author)

Government of the Netherlands - Ministry of Economic Affairs ( email )

Bezuidenhoutseweg 20
Den Haag, 2594 AV
Netherlands

Luuk Klomp

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 1517 (Phone)
+31 10 452 2028 (Fax)

Piet Donselaar

affiliation not provided to SSRN ( email )

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