GOVERNMENT REGULATION: THE IMPACT ON TECHNOLOGICAL INNOVATION.

Results from a study conducted for the National Science Foundation by the Center for Policy Alternatives provide some new insight. The study investigated the characteristics of innovation in five industries in France, Germany, Holland, the United Kingdom, and Japan. The aim was to find the effects on innovation of any kind of government activity, whether subsidy, procurement, tax policy, or environmental regulations. Thus, the government programs studied included both those designed to enhance technological change and those intended to ameliorate its adverse consequences. It was found that the regulations having to do with safety and environment seemed to be a positive stimulus to commercial innovations in a significant number of cases, especially in mature and concentrated industries (i. e. , automobiles and chemicals). Ironically, the many direct attempts of government to stimulate innovation have not proved as successful in encouraging innovation as have environmental and safety requirements.