Can Public R&D Drive AI Innovation?

This Working paper, by Anastasios Evgenidis, Research Fellow, ELIAMEP; Senior Lecturer, Royal Holloway University of London; Apostolos Fasianos, University of Macedonia, Research Fellow, ELIAMEP and George Papapanagiotou, University of Macedonia examines whether public R&D funding stimulates AI innovation in Europe and the UK, using patent data from the European Patent Office (2003–2021). The authors construct a novel AI indicator based on patent texts and classify innovations using textual analysis. They instrument regional public R&D with plausibly exogenous variation in national defense-related spending. The astudy finds that public R&D significantly increases AI patenting: a 1% increase in public R&D raises AI patent output by 0.27%.

Read the Working paper in pdf here.