Why is R&D important in building nations?<\/p>\n
How was R&D in vaccines an added value to the global health care sector and whats the future ?<\/p>\n
Spending on research and development is important to build not only a globally competitive economy<\/p>\n
but a knowledge-driven economy as well.<\/p>\n
R&D investment helps develop new products and services that drive growth, create jobs, and improve<\/p>\n
the national welfare. For decades the U.S. government and private sector have spent more than any<\/p>\n
other nation on R&D. But that advantage is eroding as other nations increase public and private RD<\/p>\n
investments at a faster rate, causing the global U.S. share of this critical investment to decline which we<\/p>\n
will play huge role in as one of the fastest growing economy in the emerging markets. ( Bloomberg 2019<\/p>\n
report )<\/p>\n
Any Government creates the policies that stimulate R&D activity in the private sector. At the moment,<\/p>\n
individual firms are often unable to harness all the benefits of innovation and, therefore, are<\/p>\n
underinvesting in R&D. Tax incentives like the Research and Experimentation tax credit are one tool to<\/p>\n
encourage investment, and experts say policymakers should do more to support national innovation by<\/p>\n
aligning other relevant policies related to education, patent law, and immigration<\/p>\n
R&D in general encompasses three activities: basic research, applied research, and development.<\/p>\n
Roughly two-thirds of all global R&D is focused on development, with the remainder split between<\/p>\n
applied and basic research. Basic or pure research does not have an immediate commercial objective,<\/p>\n
but is rather focused on developing new principles and theories that explain the natural world.<\/p>\n
"Modern economies are based on the command of knowledge and information," economist Gary S.<\/p>\n
Becker wrote in November 2010. "Since knowledge is created by basic and applied research, nations<\/p>\n
should increase the share of its GDP that is spent on R&D." He added, "While most basic research<\/p>\n
projects fail, the successes often bring enormous benefits to society."<\/p>\n
These societal gains from basic research breakthroughs can have broad commercial applications down<\/p>\n
the road. For instance, basic research for the laser , a technology involved in some 55,000 U.S. patents,<\/p>\n
was funded by the U.S. Department of Defense.<\/p>\n
Basically any Government should heavily get involved in basic research because as being a huge<\/p>\n
institute it is better able to assume the risks and long investment periods associated with basic<\/p>\n
research\u2014and ultimately more apt to reap the benefits. Basic research results are non-patentable, so<\/p>\n
while one firm cannot easily capture the benefits of basic research, the government will benefit if new<\/p>\n
insights ripple across the economy.<\/p>\n
How can Innovation impact Economic Recovery<\/p>\n
As agreed any federal government should be the primary funder for basic research<\/p>\n
Without government intervention, "the private market would not adequately supply certain types of<\/p>\n
research," Federal Reserve Chairman Ben Bernanke said at a conference on jobs and growth in May<\/p>\n
2011. "The declining emphasis on basic research is somewhat concerning because fundamental research<\/p>\n
is ultimately the source of most innovation, albeit often with long lags."<\/p>\n
These lags exist because of the distance between basic research and human needs. Applied research<\/p>\n
helps bridge this gap by solving practical problems that benefit humanity with a commercial objective.<\/p>\n
While determining the structure of DNA was an exercise in basic research, efforts to determine a link<\/p>\n
between genetics and breast cancer would be applied research. Once that link is understood, the<\/p>\n
development phase of R&D puts the new knowledge into designing products and services. Creating a<\/p>\n
quick test for a genetic sequence linked to breast cancer would be development. Development is lower<\/p>\n
risk and yields patentable innovations with direct commercial objectives, so business R&D spending<\/p>\n
dominants in this phase. Notably, most government development funding is for defense.<\/p>\n
Trends in Global R&D Spending<\/p>\n
Over the first decade of the twenty-first century, total public and private U.S. R&D expenditures grew at<\/p>\n
just 5 percent a year, reaching $400 billion annually in 2009. Meanwhile, R&D spending has generally<\/p>\n
surged across Asia, with China and South Korea maintaining double digit growth rates. China became<\/p>\n
the second highest spender on R&D worldwide, with $154 billion in 2009, surpassing Japan. For that<\/p>\n
same period, the European Union averaged 5.8 percent R&D growth, reaching $300 billion.<\/p>\n
Comparing R&D spending can be misleading, however, without accounting for the size of a nation\u2019s<\/p>\n
population and economy. In 2009, the U.S. R&D to GDP ratio was 2.9 percent–a number last achieved in<\/p>\n
1964, and near a record high. Nonetheless, eight nations had a higher ratio.<\/p>\n
Global science and engineering (S&E) employment and R&D spending are closely related because<\/p>\n
personnel costs are the largest share of R&D expenditures in most economies. Between 1995 and 2007,<\/p>\n
the United States and the European Union both increased their total S&E employment from 1 to 1.4<\/p>\n
million. Asia enjoyed more rapid growth over this period, particularly China (0.5 to 1.4 million) and<\/p>\n
South Korea (100,000 to 200,000).<\/p>\n
All federal governments are the primary funders for basic research in all developed countries, the great<\/p>\n
majority of which is conducted at top colleges and universities. For decades, the U.S. government has<\/p>\n
spent more as a percent of GDP on directly funded R&D than other national governments. This is still<\/p>\n
true; in 2008 no other OECD nation had more direct government R&D funding as a percentage of GDP.<\/p>\n
But, this competitive advantage is eroding as growth of federal R&D investment wanes. From 1953 to<\/p>\n
1987 the real annual growth rate in federal R&D spending was 4.9 percent, but from 1987 to 2008<\/p>\n
federal R&D expenditures grew at just 0.3 percent.<\/p>\n
The mix of federal R&D spending has changed as the priorities of the government have evolved. Over<\/p>\n
the past two decades, allocations for health research grew fastest to become a majority of non-defense<\/p>\n
R&D spending. However, more than half of federally funded research is still directed towards defense,<\/p>\n
even though this share is down from Cold War highs.<\/p>\n
Military research has yielded innovations that have shaped modern life: jet propulsion, the Internet,<\/p>\n
GPS, nuclear power, microwave ovens, and communication satellites, just to name a few. Still, some<\/p>\n
experts believe that the flow of innovation may be slowing from the military to the broader economy, as<\/p>\n
military R&D is increasingly targeted to specialized needs. For instance, the commercial jet engine that<\/p>\n
enables modern air transportation has military roots, but decades of investment in stealth technology<\/p>\n
may have little potential outside of military applications.<\/p>\n
Competition in the civilian market may spur a higher pace of innovation than the military demands; the<\/p>\n
rapid growth of the video game industry sped the development of virtual reality training systems for<\/p>\n
soldiers. Notably, no other developed nation allocates more than 30 percent of government R&D<\/p>\n
support to defense.<\/p>\n
The composition of spending has changed over this time period; military R&D declined by 3 percent,<\/p>\n
while health R&D grew by 9 percent. Non-defense and non-health R&D grew by 13 percent over the<\/p>\n
past four years, but this is far less than the pace set by the America Competes Reauthorization Act of<\/p>\n
2010, which called for a doubling of allocations over ten years. Increased allocations for general science<\/p>\n
R&D have largely been directed at multiagency initiatives such as the National Nanotechnology Initiative<\/p>\n
where Zewail our Egyptian noble prize winner have played a major role in.<\/p>\n
Spurring Innovation With Tax Policy<\/p>\n
The government can also promote R&D through its tax policy. An incentive known as the Research and<\/p>\n
Experimentation (R&E) tax credit encourages private sector R&D by allowing corporations to take<\/p>\n
unlimited deductions for qualified research spending as we do with allowing charity spending to be tax<\/p>\n
deductable.<\/p>\n
Many economists and businesses generally support the credit and its goal of raising private sector R&D<\/p>\n
investment to a more socially optimal level.<\/p>\n
.<\/p>\n
Today many countries have incentive programs far more generous than that. A recent study by the<\/p>\n
Washington-based Information Technology and Innovation Foundation ranked the United States<\/p>\n
twenty-seventh out of forty-two countries in R&D tax incentive generosity<\/p>\n
While tax credits allow a direct deduction from taxes payable, some nations use enhanced tax<\/p>\n
allowances (e.g. Denmark, United Kingdom) that reduce the tax liability. The value of a tax allowance<\/p>\n
depends upon the corporate tax rate. Some nations tie R&D tax credits more explicitly to jobs with a<\/p>\n
payroll withholding tax credit for R&D wages (e.g Belgium, Netherlands), while others give more<\/p>\n
generous incentives to small businesses (e.g. Canada, Japan, Korea, United Kingdom).<\/p>\n
One innovative policy gaining traction is the "patent box." In 2013, the United Kingdom started following<\/p>\n
the Netherlands, Belgium, Spain, and Luxembourg in adopting a patent box system that taxes firms at a<\/p>\n
lower rate on income related to domestically-developed patents.<\/p>\n
2.8 percent. For comparison, the R&D intensity of all OECD nations averages at 2.4 percent. Countries<\/p>\n
such as Korea and China have focused on expanding heavy investment into R&D over the past decade<\/p>\n
R&D in emerging markets<\/p>\n
Even if the globalization of R&D is essentially concentrated in industrial countries, it involves more and<\/p>\n
more emerging countries (Fu, Soete, 2010; Lundvall, 2009). The geographic space concerned by the<\/p>\n
localization of R&D is larger, thus showing how firms have become free to manage their scientific and<\/p>\n
technical assets throughout the world, as firms\u2019 value chains are more and more globalized.<\/p>\n
15<\/p>\n
The phenomenon of R&D location in emerging countries has begun at the end of the eighties and has<\/p>\n
then grown in importance.). Besides, the strategic alliances, the consortia, the contracts between<\/p>\n
universities and companies and the other joint ventures that are not taken into account in the foreign<\/p>\n
investment statistics are also liable to confirm that trend. However, one can also observe the<\/p>\n
concentration of R&D investments in a small number of countries and among them, in a few regions or<\/p>\n
urban areas and even in a few clusters specialized in high-tech \u2013 this is the case of Hyderabad, Bangalore<\/p>\n
and New Delhi in India, of Hong Kong, Shanghai, Beijing and Guangzhou in China (see Hamdouch, Fe,<\/p>\n
2009, on pharmacy and biotechnologies for instance; see also Wang and Lin, 2008, on information<\/p>\n
technologies in China).<\/p>\n
The reasons for the location of R&D in emerging countries are numerous; one can mention the<\/p>\n
strengthening of the emerging countries\u2019 scientific and technical potential joined to the lower cost of<\/p>\n
scientific and technical human resources, the globalization of intellectual property rights, the growing<\/p>\n
demand in some emerging countries and the stagnation of demand in industrial countries. We develop<\/p>\n
them below.<\/p>\n
The strengthening of the emerging countries\u2019 scientific and technical potential can be seen in the<\/p>\n
increase in their R&D spending. According to the OECD (2010b), the share of non-member countries in<\/p>\n
the global R&D is increasing; it accounted for 16% of the companies\u2019 R&D spending in 2007 (OECD<\/p>\n
member countries and non-member countries). China is the first investor; China\u2019s real gross domestic<\/p>\n
expenditure on R&D in 2008 accounted for 13.1% of the OECD\u2019s total expenditure while they accounted<\/p>\n
for 5% or so in 2001 (OECD, 2010a). That represents 54% of the R&D of OECD\u2019s non-member countries<\/p>\n
companies\u2019 (OECD, 2010b). The Russian Federation\u2019s R&D spending accounted for 17 billion USD in 2008<\/p>\n
\u2013 (steady Dollars of 2000, PPP) \u2013 that is to say 2.2% of the OECD\u2019s total spending, and almost the same<\/p>\n
share as Canada and Italy. Between 2000 and 2008, the annual growth rates of emerging countries<\/p>\n
companies\u2019 R&D spending also increased far more than those of industrial countries \u2013 21,5% in China,<\/p>\n
10.2% in Brazil, 8.3% in India, 4.7% in the Russian Federation, etc. compared with 2.1% in the United<\/p>\n
States, 2% in Germany, 1% in France, 3% in Sweden, 4.8% in Japan.<\/p>\n
Besides, these countries also tried to strengthen the qualification of their workforce and to develop their<\/p>\n
infrastructure and their supplier networks, which represent the bases of the national innovation systems<\/p>\n
that are attractive for multinational firms (Lundvall et al. 2006; Lundvall, 2009). At the same time, the<\/p>\n
profits that can be drawn from multinational firms\u2019 investments (R&D) by emerging and developing<\/p>\n
countries depend a great deal on the absorption capacities of these countries, which are closely linked<\/p>\n
to the development of their scientific potential and to their national innovation systems, thus to the<\/p>\n
industrial policies that they will be able to develop (Arthreye, Cantwell, 2007; Narula, Dunning, 2009).<\/p>\n
The Trade-related intellectual property rights agreement (TRIPs) signed in the framework of the GATT\u2019s<\/p>\n
Uruguay Round harmonizes intellectual property rights at the international level and it is compulsorily<\/p>\n
applied to WTO members (Laperche, 2001). It has been implemented since 1995 but the poorest<\/p>\n
countries got 5 to 10 more years\u2019 extension to adapt their national legislations. That international legal<\/p>\n
framework of intellectual property creates minimum rules for intellectual property protection \u2013 that can<\/p>\n
be applied to patents, trademarks, drawings and models, copyright and secrets \u2013 and respects the<\/p>\n
clauses of the wealthiest country and of the national treatment. In fact, they create a climate of<\/p>\n
confidence for the investors who are concerned about the protection of their knowledge capital.<\/p>\n
Finally, the potential of emerging countries is another reason why R&D investments are increasing in<\/p>\n
those growing markets. The economic crisis that has concerned the world economy since 2007 has<\/p>\n
harshly affected industrial countries while emerging countries \u2013 India and China in particular \u2013 have kept<\/p>\n
on recording GDP growth rates that ranged from 5% to 8% in 2009 \u2013 while it was negative in most OECD<\/p>\n
countries (OECD, 2010b, pp. 22-23). Emerging countries\u2019 markets then represent opportunities for<\/p>\n
industrial countries\u2019 firms. This is the case for instance, in the pharmaceutical sector. According to a<\/p>\n
recent survey by McKinsey (Edwards, 2010), emerging markets contributed to 30% of the value created<\/p>\n
by the pharmaceutical industry in 2008 and pharmaceutical markets may grow by 14% per year by 2013.<\/p>\n
R&D in vaccines<\/p>\n
The coming decades will see major advances in the development of vaccines for infectious diseases but<\/p>\n
also for chronic conditions like cancer and Alzheimer\u2019s disease, according to one of the leading scientists<\/p>\n
behind modern immunisation.\u2019<\/p>\n
Dr Stanley Plotkin, who was pivotal to the discovery of the rubella vaccine in the 1960s and edits the<\/p>\n
standard text book on vaccines, believes new scientific knowledge has transformed immunisation and<\/p>\n
will lead to more vaccines for adults and adolescents. He also expects breakthroughs in how vaccines<\/p>\n
are made, distributed and administered<\/p>\n
Are there advances coming down the tracks in the ways vaccines are administered?<\/p>\n
No doubt. First of all, combining vaccines is an important step. One doesn\u2019t have to give as many<\/p>\n
injections these days. Transcutaneous \u00a0vaccination is now a fact in Europe for influenza. Certainly,<\/p>\n
methods of introducing vaccines through skin are multiple. Aerosol has been well developed for measles<\/p>\n
and could be developed for other antigens. Oral vaccines are more problematic due to the difficulty of<\/p>\n
evading the tolerance mechanisms of the gut but there are interesting technical advances in that area.<\/p>\n
The sublingual administration of vaccines is another method which could become more important.<\/p>\n
At present, most vaccines are received during childhood. Will adults receive more vaccines in future?<\/p>\n
There is certainly already a move in that direction. There are several vaccines for adolescents and a<\/p>\n
limited number for adults but that will inevitably change. Of course, children will need to be protected<\/p>\n
against the things we protect them against at the moment.<\/p>\n
Vaccines have an important role in the global fight against anti-microbial resistance<\/p>\n
Governments, NGOs and industry must work together to<\/p>\n
\u2022 Increase use of existing vaccines<\/p>\n
\u2022 Boost early stage scientific research<\/p>\n
\u2022 Sustain viable markets for future vaccines<\/p>\n
Increase coverage rates of vaccination thus reaching the global levels<\/p>\n
Technology could improve\u00a0the simplicity and\u00a0efficiency of vaccine\u00a0delivery:<\/p>\n
\u2022 Reducing the need for multiple doses of a vaccine by<\/p>\n
boosting the body\u2019s immune response 5<\/p>\n
\u2022 Improving manufacturing processes to deliver vaccine<\/p>\n
doses more quickly<\/p>\n
\u2022 Making transportation and storage of vaccines easier<\/p>\n
could reduce wastage 1<\/p>\n
Why is investing in vaccines R&D important from an economic perspective :<\/p>\n
Investing in vaccines simply gives more health protection thus decreasing the mortality rate \u2013 increase<\/p>\n
national performance \u2013 and decreases the health care expenditure in general thus creating space to<\/p>\n
spend on developing the health care sector as a whole<\/p>\n
As for Egypt , currently a strong political will & understanding of the important of R&D investing is much<\/p>\n
witnessed given the latest MOUs signed with multinationals for knowledge exchange and for health care<\/p>\n
development partnerships , a strong vision and strategy are being set in place focusing on massive R&D<\/p>\n
investments that we might not witness its short term impact but definitely our kids\u2019 will do !<\/p>\n
R&D is a very lengthy and long term process yet extremely important if you are in a phase of building<\/p>\n
nations and thanks god we have currently for the first time in Egypt this national mindset & vision<\/p>\n
where you can witness R&D as a top priority on all levels.<\/p>\n","protected":false},"excerpt":{"rendered":"
Why is R&D important in building nations? How was R&D in vaccines an added value to the global health care sector and whats the future ? Spending on research and development is important to build not only a globally competitive economy but a knowledge-driven economy as well. R&D investment helps develop new products and services […]<\/p>\n","protected":false},"author":410,"featured_media":40618,"comment_status":"open","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6047],"tags":[6221],"yoast_head":"\n