Does manufacturing stir up innovation?

In this Issue
* Because of its positive contribution to employment and economic growth, the EU has set a manufacturing target of 20% of GDP. This could also boost R&D, productivity and exporting.
* Our analyses do not find empirical evidence that a large manufacturing sector has a direct influence on exporting activity or productivity growth.
* We find a positive association between manufacturing and R&D investment. The EU manufacturing strategy could help reaching the 3% R&D intensity target.
* However, the link between manufacturing and R&D depends on the industrial structure of a country. Support to new high-tech sectors should be coupled with actions to encourage technological upgrade in existing ones.

Authors:

COAD Alexander, VEZZANI Antonio