A long stream of academic literature has established that public funding towards research and development matters for economic growth because it relates to increases in innovation, productivity and the like. In the recently published article “Public Funds and Local Biotechnology Firm Creation “ Kolympiris, Kalaitzandonakes and Miller demonstrate that increases in the level of funding for biotechnology research provided by the Federal Government are also closely related to increases in the number of biotechnology firm births in the US. The researchers also find that the association is much stronger when R&D funding is directed to universities implying the presence of spillovers of public research funding for entrepreneurship.

For details on this work see Kolympiris, C., N., Kalaitzandonakes and D. Miller “Public Funds and Local Biotechnology Firm Creation.” Research Policy, 43(1): 121–137, 2014.