OECD: The rise and rise of the tax break

Last year 20 of the 30 OECD member countries offered R&D-linked tax breaks, compared to 12 in 1995, while direct public financing of R&D activities fell to 7 per cent of companies’ R&D expenditure, from 11 per cent in 1995, the report found.

Overall R&D spending in OECD countries has increased more slowly in recent years than during the second half of the 1990s. Total gross expenditure on R&D (GERD) grew by less than 2.2 per cent a year between 2001 and 2005, down from 4.6 per cent annually in real terms between 1995 and 2001.

Entitled the OECD Science, Technology and Industry Scoreboard 2007, the report also noted a sharp rise in the globalisation of innovation. International co-authorship of scientific publications tripled between 1995 and 2005.

Cross-border co-operation on inventions nearly doubled as a share of total inventions worldwide between 1991–93 and 2001–03, while foreign ownership of domestic patents increased by 50 per cent between the early 1990s and the early 2000s.

The United States has the most biotechnology firms (close to 2,200), followed by Japan and France (800 each). But the number of biotechnology patents has been falling since 2000 in most countries, after a sharp increase in the late 1990s, largely due to the more restrictive criteria applied by patent offices and the end of the wave of patenting that followed the decoding of the human genome.

For more on the OECD report go to the Scoreboard online.