Financing innovation: new proposals and instruments

This conference identified a series of risks and opportunities for financing innovation. Policies are difficult to draw up, just as innovation is different to pin down. The first obstacle is uncertainty: naturally, it is impossible to foresee the results of research and plan the market’s reaction to a new product or service. As the outcome of an innovative venture is unknown, so is the conviction of the person innovating and the person sponsoring that innovation unbalanced. Participants highlighted the difficulties created by the great amounts of time needed to launch innovative activities. Even if insecurity is reduced to a bare minimum, returns are not likely to be quickly forthcoming. Finally, the “winner takes all” environment in R&D (that affords great advantages to whoever patents a discovery) minimizes return on investment in all the runners up. All these hurdles make investing in R&D very tricky. For this reason, participants encouraged the development of new mechanisms for financing research, both for the State and for the private sector.