02694cas a2200301 a 4500 AALejournalIMF021526 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513570068 1018-5941 BD-DhAAL BD-DhAAL Agarwal, Ruchir. What Drives Innovation? : Lessons from COVID-19 R and D / Ruchir Agarwal, Patrick Gaule. Washington, D.C. : International Monetary Fund, 2021. 1 online resource (58 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students To examine the drivers of innovation, this paper studies the global R and D effort to fight the deadliest diseases and presents four results. We find: (1) global pharmaceutical R and D activity-measured by clinical trials-typically follows the 'law of diminishing effort': id est the elasticity of R and D effort with respect to market size is about 1\2 in the cross-section of diseases; (2) the R and D response to COVID-19 has been a major exception to this law, with the number of COVID-19 trials being 7 to 20 times greater than that implied by its market size; (3) the aggregate short-term elasticity of science and innovation can be very large, as demonstrated by aggregate flow of clinical trials increasing by 38% in 2020, with limited crowding out of trials for non-COVID diseases; and (4) public institutions and government-led incentives were a key driver of the COVID-19 R and D effort-with public research institutions accounting for 70 percent of all COVID-19 clinical trials globally and being 10 percentage points more likely to conduct a COVID-19 trial relative to private firms. Overall, while economists are naturally in favor of market size as a driving force for innovation (i.e.'if the market size is sufficiently large then innovation will happen'), our work suggests that scaling up global innovation may require a broader perspective on the drivers of innovation-including early-stage incentives, non-monetary incentives, and public institutions. Mode of access: Internet COVID-19 imf Innovation imf Market Size imf Pharmaceutical Industry imf Gaule, Patrick. IMF Working Papers; Working Paper ; No. 2021/048 Full text available on IMF http://elibrary.imf.org/view/journals/001/2021/048/001.2021.issue-048-en.xml IMF e-Library