(212) 32nd Article : Money for nothing: How firms have financed R&D-projects since the Industrial Revolution

In this article have noted how R & D financing is made historically. The difficulty of the five challenges: the fact that R & D is characterized by low cost, real uncertainty, time and elapsed time between outlay and pay-off, adverse selection, and moral hazard. The implication of this challenge is that companies need cash, not capital, for R & D projects. We find that long-term R & D spending patterns, both within the UK and the United States, reveal sharp growth, often several times faster than GDP growth, from the turn of the century to the 1970s, with further growth equal or lower than GDP. For a case study of R & D projects, we introduce three methods to measure project costs. In addition to using GDP-deflated costs and relative costs to GDP, we introduced the Empire State Index, which uses the contracted construction cost of GDP from the Empire State Building as a comparator.