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Thursday, September 26, 2013

The New Normal? Slower R&D Spending

From the Atlanta Fed's macroblog:

The New Normal? Slower R&D Spending: In case you need more to worry about, try this: the pace of research and development (R&D) spending has slowed. The National Science Foundation defines R&D as “creative work undertaken on a systematic basis in order to increase the stock of knowledge” and application of this knowledge toward new applications. ...
R&D spending is often cited as an important source of productivity growth within a firm, especially in terms of product innovation. But R&D is also an inherently risky endeavor, since the outcome is quite uncertain. So to the extent that economic and policy uncertainty has helped make businesses more cautious in recent years, a slow pace of R&D spending is not surprising. On top of that, the federal funding of R&D activity remains under significant budget pressure. See, for example, here.
So you can add R&D spending to the list of things that seem to be moving more slowly than normal. Or should we think of it as normal?

    Posted by on Thursday, September 26, 2013 at 09:10 AM in Economics, Productivity, Technology | Permalink  Comments (50)



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