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Future of the Corporation Research - Long-term Investment

Fundamental scientific advances are being made in everything from automobiles to energy, from food to pharmaceuticals as well as in artificial intelligence, information, and communications. They are enhancing the potential for corporations to make profound contributions to enhancing human welfare around the world. What more can corporates be doing to ensure that they contribute to research and development across their areas to ensure products and systems are for the benefit of wider society? Should corporations be entirely responsible for research and development expenditure within their sector or should they be coordinated in national and industrial strategies? As short-termism is increasingly regarded as a fundamental deficiency of our capitalist systems, how can research and development help steer corporations towards long-term investment? Short-term investment is associated with excessive discounting of long-term earnings but how much evidence is there of it and what can be done about it? To what extent are some financial systems better at supporting long-term investment than others? Is the problem predominantly a small or large company phenomenon? What can the history of technological advancement tell us about how businesses can benefit and adapt to the potential of research and development investment?

How can businesses promote long‐term investment? What can corporations do to harness and promote research and development?

Lead Researcher(s) Institution
Professor Avner Offer Oxford University

Considering the question, to what extent are some financial systems better at supporting long-term investment than others?, the research suggests that long term projects hold out the promise of large social payoffs, but they are uncertain. Therefore, one role of government and of not-for-profit social agencies is to embark on such risky projects on behalf of the public. The research will investigate the implication that any project with a remote break-even point cannot be undertaken exclusively by commercial finance and it will account for the way in which enterprise is divided between private and social agencies.

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