Fiscal Policy Can Affect Technology Development
How can Fiscal Policy Can Affect Technology Development?
Written by Jason Gordon
Updated at March 20th, 2023
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How can Fiscal Policy Can Affect Technology Development?
Research and development (R&D) efforts are the lifeblood of new technology.
Fiscal policy can encourage R&D using either direct spending or tax policy. Government could spend more on the R&D that it carries out in government laboratories, as well as expanding federal R&D grants to universities and colleges, nonprofit organizations, and the private sector.
Fiscal policy can also support R&D through tax incentives, which allow firms to reduce their tax bill as they increase spending on research and development.