Discuss the knowledge production function approach

Starting from Griliches (1979) and Griliches and Pakes (1984) a strand of literature concentrated on innovation as a knowledge production function (KPF) in which innovation is the transformation of innovative inputs in innovative outputs. Of course, both inputs and outputs should be represented by means of economic entities. For this reason, originally, inputs such as R&D (expenditure and research personnel) and output such as patents (rights about inventions perfectly accountable) have been selected for representing the KPF Patents = f(R&D) Frascati Manual is a world standard on collecting R&D statistics This manual defines R&D as comprising both the production of new knowledge and new practical applications of knowledge and including: i) basic research; ii) applied research and iii) experimental development. The following activities are excluded from R&D statistics: i) Education and Training; ii) Market Research; iii) Acquisition of Licences; iv) Product Design; v) Trial Production; vi) Acquisition of machinery related to product or process innovation.