Libro Blanco Vol I en Ingles

TOWARDS A NATIONAL INNOVATION STRATEGY FOR COMPETITIVENESSVOLUME 1to entry of innovation-intensive companies and foster competition in the industry. The idea is that the State limit itself tofostering and ensuring an adequate environment for the development of this market and leave the decisions on whatprojects to back up to firms specialized in risk capital.Another type of innovation is that associated to the development of complex systems, such as in the aerospace andtelecommunications sectors. In this case, the market failure arises from also the low appropriability of returns. On top ofthis, there is the high risk associated to the results of technological innovation projects and the high associated costs. Assuch, the willingness to invest in this type of high risk and high cost projects is low given that the prospects of recovering thereturns of the investment are scarce.In this case, competitiveness policies should be adopted for cooperation in the area of R+D (such as R+D consortia inwhich the costs and benefits of R+D are shared). Another alternative is to subsidize innovation activity, where subsidiesshould be provided in exchange for the commitment by the innovative companies to disseminate their results. The latterfosters access to innovation at a reasonable cost, preventing a single company from capturing all the benefits (and all therisks) which ultimately favours the consumer, since prices are generally lower in a more competitive environment.* Based on “Antecedentes para el diseño de una política tecnologica nacional”. José Miguel Benavente, 2004.73