R&D Policies and Economic Sustainability

Dear Colleagues,

“Economic sustainability” as a research topic is gaining increasing attention among researchers. According to the ISI Web of Science, historically, there were just 5 papers containing “economic sustainability” within the title per year. However, since 2012, this count has sharply increased, reaching 45 new publications in 2018.

Sustainability is today generally understood as a combination of environmental, social, economic, and cultural performance (Lang and Murphy 2014), being mutually complimentary (Stiglitz 2009). However, sustainability as a research topic is often heavily oriented on environmental or social issues, leaving economic sustainability, as an ability of company to stay in business, behind (Doane and MacGillivray 2001). For instance, there were 3990 ISI Web of Science records having “Sustainability” in their title, but only 721 were in economics, business or management categories.

Nevertheless, if the company or a country is economically unsustainable (meaning dissolution of a company or long recessions of national economies), there is a high risk of failing in social and environmental sustainability as well. Paradoxically, while having still less attention from researchers, economic sustainability seems to be a necessary condition for reaching sustainability as a whole—on the micro and macro level alike.

Regarding economic sustainability and sustainable economic growth, innovations are a crucial element. The link between innovation and growth has been the backbone of endogenous growth models since Paul Romer’s pioneering model (Romer 1990), followed by many. Generally, it is assumed that innovations are promoted by R&D expenditure, establishing a simple causation: Higher R&D expenditure is leading to more innovations that lead to better performance, growth, and economic sustainability as defined above. Nevertheless, this simple causation chain contains many pitfalls that are often overlooked, leading to inconclusive empirical results (David et al, 2000; Cadil et al 2018). For example, using patents as a common proxy for innovations might be misleading (Griliches 1979; Griliches and Pakes 1980; Kleiknecht et al 2002 ; Pesoa 2010 ). The R&D policy and its implementation then might be ineffective in the sense of promoting economic sustainability—not only because it is wrongly implemented, but because it follows the wrong criteria.

The purpose of this Special Issue is to highlight the importance of economic sustainability as a necessary condition of sustainability in its wider sense (environmental, social, cultural) and to discuss the possibly flawed link between R&D policy, R&D expenditures, innovations, and economic sustainability. All papers touching this problem from various fields of expertise are welcome.

References:

Lang, A.; Murphy-Gregory, H. Business and Sustainability; Between Government Pressure and Self-Regulation. Springer International Publishing 2014, pp 3-19.

Stiglitz, J.E.; Sen, A.; Fitoussi, J. P. Report by the Commission on the Measurement of Economic Performance and Social Progress. 2009.

Doane, D.; MacGillivray, A. Economic Sustainability: The Business of Staying in Business; The SIGMA Project; SIGMA: Saint Louis, MO, USA, 2001.

Romer, P.M. Endogenous Technological Change. J. Political Econ. 1990, 98, 71–102.

David, P.A.; Hall, B.H.; Toole, A.A. Is public R&D a complement or substitute for private R&D? A review of the econometric evidence. Res. Policy 2000, 29, 497–529.

Cadil, J.; Mirosnik, K.; Petkovova, L.; Mirvald, M. Public Support of Private R&D–Effects on Economic Sustainability. Sustainability 2018, 10, 4612.

Griliches, Z. Issues in Assessing the Contribution of R&D to Productivity Growth. Bell J. Econ. 1979, 10, 92–116.

Pakes, A.; Griliches, Z. Patents and R&D at the firm level: A first report. Econ. Lett. 1980, 5, 377–381.

Kleiknecht, A.; Montfort, K.; Brouwer, E. The Non-Trivial Choice between Innovation Indicators. Econ. Innov. New Technol. 2002, 11, 109–121.

Pessoa, A. R&D and economic growth: How strong is the link? Econ. Lett. 2010, 107, 152–154.

Prof. Jan Cadil
Guest Editor

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• economic sustainability
• sustainable growth
• R&D policy
• innovations