Firms That Are Willing to Invest in Research and Development (Cluster and Calibrated Tax Systems Delta County Model)

Investment is the lifeblood of any economy. In the global arena its important to build an environment that attracts new investments and leads to greater research & development (R&D). At various times in history countries pushed R&D to innovate a developmental line to solve important problems. While government might research and launch a spot where investments likely will lead to increases in net positive wealth it is often industries that push that growth far beyond what government coffers could even attempt to pay for (assuming they find value in the investments).

Collaborated R&D and Shared Ideas/Development:

Old Infrastructure can Create New

I'm working a cluster theory that seeks to create an investment rich environment where industries can partner to create value in their particular supply lines far beyond what they could have done in developmental silos (See Delta County Venture Capitalism). As companies share information, people, and resources they will inevitably borrow from like minded industries their R&D returns grow substantially (See Transactional SubFactors).

Think of it like this....innovation rests on sharing ideas and creating new ways of doing things to solve problems. When companies place their R&D investments into certain aspects of the cluster they begin to develop off of each other in a way they couldn't before (See Economic Synergy, Clusters and Economic Value, Interaction Value.

For example, if I want to develop a new way of creating an advanced research tool to be used in the Great Lakes (or space industry) there will be interested parties that could benefit off of the research and development that goes into its development and design. Likely stakeholders might include Navy or Space (or other branches), research instrument suppliers, outdoor gear companies, engineers, metal experts, etc.... Collaboration on mutual shared goals expands the power of R&D money breadth and width. When we put R&D activities in the same place we can not only develop that tool but also other tools and marketable products for government and public use. See Delta County Multi Clusters and Delta County Start Ups.

Encouraging Companies to Invest in R&D:

We want companies to coordinate some of their R&D efforts in order to build into a cluster at the same time. See Pack Investing. The problem municipalities often face is they don't know how to attract R&D for maximizing these synergistic benefits. To answer question we would first need to know who will engages in R&D investment? According to a study in the Journal of Economics of Innovation and New Technology we find

1. Majority of R&D is conducted by export oriented large manufacturing firms

2. Some shifting to include small non-manufacturing firms (Foster, Grim & Zolas, 2020)

What this study helps us understand how larger manufacturing firms would be most likely interested in R&D investments and there is a growing trend of non-manufacturing firms that also have interest. See Pack Investing, Delta County Venture Capitalism and Rebuild Delta County Downtown. In my Delta County Cluster Model it would make sense to attract 1.) manufacturing R&D teams and 2.) non manufacturing engineering & design firms and pooled local small business R&D (Giving small business an opportunity to invest in cluster development and reap the rewards for their custom products. By the way, they are also receiving the benefit of the cluster environment and its infrastructure (See Delta County Export Shipping). There is a way to increase large and small business at the same time. See Attracting SME Delta County).

This post is part of a larger work on digital age calibrated tax systems, perpetual sustainable growth, and transactional cluster theory.  

See other tax development theoretical framework at Lower HQ Tax Calibrated System Attracting HQ (DC Model) G7 Minimum Tax Floor

Lucia Foster, Cheryl Grim & Nikolas Zolas (2020) A portrait of U.S. firms that invest in R&D, Economics of Innovation and New Technology, 29:1, 89-111, DOI: 10.1080/10438599.2019.1595366