The strategy of fiscal support for business research and innovation in the context of economic crisis

Abstract

Object: study of the problems of fiscal support for business research and innovation in the conditions of economic crises, analysis of the implied tax subsidy rate on R&D (Research and Development) expenditures, generalization of international experience of state support and stimulation of business innovative activities in crisis periods, substantiation of strategic directions of such support in crisis conditions. The subject of the study was fiscal support for business R&D, as well as the state's strategy for its implementation. The purpose of the article is to substantiate the strategic directions of fiscal support of business R&D in crisis conditions. Methods: methods of systemic and historical-logical analysis, structural-functional analysis, and statistical comparisons were used. Findings: the study determined certain peculiarities of fiscal R&D support and business innovations during the periods of economic crises in OECD (Organisation of Economic Cooperation and Development) countries; it is stated that such support, in particular, through tax allowances and direct budget support, as well as state funding of other R&D expenditures, should be an important component of economic recovery measures; strategic areas of fiscal support for business R&D have been developed to ensure the post-crisis reconstruction of the national economy on an innovative basis. Conclusions: measures aimed at provision of high level of R&D investment (even in difficult conditions) should belong to the priority areas of economic policy, and state support for R&D investment should be counter-cyclical. The goals and measures of innovation policy in crisis conditions should spur the restoration of the national economic growth and improve its competitiveness, which requires, in particular, finding a balance between the creation of general conditions for innovation and state support for business R&D. The latter should be based on clearly articulated priorities of such support as well as areas of innovative activity that should be developed in the long term. Having summarized the experience of applying various business support measures in crisis conditions, the following measures have been substantiated as foreground: to provide direct budget support for business R&D, as well as budget financing of high- risk long-term research of the creation of public goods and knowledge that have a high expansion potential; to improve the information base for fiscal decision-making, to broaden support for business R&D of small and medium-sized enterprises in order to create the potential for sustainable economic recovery. Improving the effectiveness of the impact of R&D fiscal measures on the development of national economies requires ensuring a wide coverage of the components of the innovation system, in particular, by expanding state procurement of innovative goods and services; development of cooperation in the spheres of mutually complementary economic activities; expansion of public-private partnership projects and commercialization of public sector research.