Keywords: Industrial Policy, Innovation, Public Subsidies
This article provides new evidence on the relevance and impact of public support to innovation activities in the case of two European countries: Italy and The Netherlands, given the opposite industrial structure of the two countries. The empirical analysis is based on firm-level data drawn from the Community Innovation Surveys (CIS2 and CIS3). On the basis of the evidence presented in the paper the innovation policy model in Italy could be qualified as "diffusion oriented" whereas the Dutch model of innovation policy seems to be much more selective or "mission oriented". In the Italian case, innovation policies reach a rather large section of the Italian business sector and support mainly the introduction of process innovation and the acquisition of new capital equipment. Instead, innovation policies in The Netherlands seem to be more focused on product innovations, R&D activities and radical innovation projects. Part of the differences of these two models of technology policy can be explained by the different role played by regional and local authorities in supporting firms' innovation activities. In both countries, no additional effects of public incentives on firms' innovation performances have been found even if the reasons behind the lack of additionality are likely to be very different in the two countries.