R&D and productivity: measurement issues and econometric results.

The direct successes of space, defense, and health research are not reflected in the national productivity accounts. Nor are many of the improvements in technologically complex new products. Econometric studies underestimate, therefore, the full contribution of R&D, especially since it is difficult to trace its spillover effects. Nevertheless, a recent study finds a significant contribution of R&D to productivity growth in the largest U.S. manufacturing corporations, with no evidence of a major decline in it, and a larger role for basic research and a smaller one for federally financed R&D expenditures than is implied by their relative importance in total R&D expenditures.