Methodological Improvement for the Economic Assessment of Public R&D Programs

Korea has rapidly increased R&D investment over the last few decades and the intensity of R&D investment is among the highest in the world; however, there are serious concerns about R&D performance and R&D efficiency. This study is to improve the economic assessment methodology regarding a feasibility study for national R&D programs that are thought to be one of the most prominent ways to enhance R&D efficiency. In order to improve the methodology of economic assessment, a few of important factors such as technical or market uncertainty, spillover effect, and R&D contribution ratio should be covered in the model. The focus of this article is technological and market uncertainty that has a close relation with strategic flexibility and utilization potential to increase the value of R&D programs. To improve the current linear and definitive R&D process, a new framework with strategic flexibility is suggested, in which the result of economic assessment that considers technological and market uncertainty is reflected in planning. That kind of feedback process is expected to enhance the value of the program/project as well as R&D efficiency.