Management of Information and Knowledge in Public R&D Spending and Private Investment
Management of Information and Knowledge in Public R&D Spending and Private Investment

Summary/Abstract: This paper examines whether government spending on research and development (R&D) crowds out or stimulates private investment in Germany. While traditional economic perspectives emphasize displacement effects arising from funding competition, alternative theoretical frameworks suggest that public R&D can complement private investment by reducing uncertainty, improving efficiency, and expanding technological opportunities. In particular, state-funded basic research appears to support corporate innovation by providing foundational knowledge on which private investment can build. The analysis combines a conceptual discussion of crowding-out and crowding-in mechanisms with a descriptive examination of long-term trends in public and private R&D expenditures from 2000 to 2023. Beyond its macroeconomic perspective, the study contributes to the broader academic discourse on knowledge creation, dissemination, and utilization. By examining the role of public research funding as a catalyst for knowledge generation and innovation, the paper highlights the importance of institutional frameworks that transform scientific knowledge into economic and societal value. The findings indicate that public research investment functions as growth-enhancing capital formation rather than a substitute for private activity.

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