`Public' funds for `Private' R&D

Providing grants / soft loans/ risk capital to `for profit' organisations by government agencies is based more on personal conviction than consensus or empirical data. Read this analysis ` What difference do IWT R&D grants make for their clients'. This study is path breaking, it moves away from out put/ out come to behavior additionality. They rightly pointed that evaluation of R&D projects with focus only on output will induce government agencies to select low risk, short term projects. More important from national perspective are the behavioural changes, the spin offs that linger on after completion of funded project. Also read my paper at SSRN on the same topic.