A comparative analysis of business R&D policy in Spain and Portugal

Abstract

This paper compares the R&D policy strategy of Spain and Portugal to promote business R&D spending by focusing on the R&D objectives, incentives and outcomes. It aims to uncover new matters for policy attention and research concerning the public support for business R&D. These countries have similar R&D structural problems to address, two of the most generous fiscal systems for R&D and comparatively low S&T indicators as compared to the EU average. Both failed to reach the R&D intensity goals of the past and it is unlikely they will reach the R&D goals set for 2020. Nevertheless, the rationale for attracting international R&D investment is competitive. Three important issues call for attention: the inverse public incentive structures for business R&D, the faster growth of the BERD/GDP ratio in Portugal over recent years and the implications of the tax reform in Spain in 2008. As a conclusion, we believe that both countries are missing opportunities for mutual learning and should coordinate their R&D public policies.