The economic impact of Canadian university R&D

Canadian university research expenditures and those of graduate students produce a gross static economic impact upon the Canadian gross domestic product (GDP) which considerably overestimates the net static impact of university research. Moreover, the net static impact, because it keeps constant the economic structure and the productivity of factors of production, does not account for the principal beneficial impact of university research-the building of human capital and the transfer of knowledge (technology). All of this leads to an increase in productivity and, thus, in the size of the GDP. This effect is called the dynamic impact. This article, besides comparing succinctly the gross impact with the net static impact, develops a practical method to measure the dynamic impact of university research. In a way, this method provides another benchmark, besides the peer review, to judge the relevance of university R&D. (c) 1998 Elsevier Science B.V. All rights reserved.