Strategic change of public research units in their scientific activity

The current debate oil public sector research in modern economics has generated an increasing interest regarding the scientific activity of research units for external users. The purpose of this paper is to investigate the relationship between production of basic research and applied activity of public research units, focusing Italian case-study. The results show an increasing crowding-out effect between applied activity vs. basic research. This effect is due to cuts in research unit budgets and increased push by governments that have obliged the researchers to collaborate with firms and external institutions for getting funds more and more necessary to the economic survival of public research institutes. In addition, to cope with consequential environmental threats, Italian research organizations have been facing a strategic change. In fact, public research institutes now operate as research units market-oriented and researchers focus oil applied activity and consultancy, rather than basic research. This strategic change of public research institutions is also present in several countries such as Australia, Canada, France, Germany, Norway, and so on. Because of this worldwide tendency, there is the threat, in public research organizations, of less discovery-based research around longer term needs centred on public welfare that also affect, negatively, long-run economic growth. (C) 2008 Elsevier Ltd. All rights reserved.